HomeMy WebLinkAboutBelzer & Carr 2007-06-08Tele:_ 916-442-6500
Law Offices of Fax:`'' 916-442-6510
~ELZER & CA - Steve@belzercarrlaw.com
A PROFESSIONAL ASSOCIATION marty@belzercarrlaw.com
LAW OFFICE OF STEVEN P. BELZER
LAW OFFICE OF MARTIN CARR
SUE ANN ROSS, PARALEGAL
June 8, 2007
VIA CALIFORNIA OVERNIGHT
David J. Rapport, Esq.
Law Offices of Rapport and Marston
405 W. Perkins Street
P.O. Box 488
Ukiah, CA 95482
Re: City of Ukiah v Mattern
Dear Mr. Rapport:
Enclosed are the Vineyard Lease with the Matterns' original signatures and mine, a Request for
Dismissal of the trial court action and cross complaint, on which I have signed the consent, and the
request to dismiss the appellate court proceedings with my original signature.
We need to settle on a date to put in the lease as the effective date. I suggest the date that the settlement
agreement was signed by the last party to sign. The date is consented to on the basis that you informed
me that any expenses that are deductible under the lease which were incurred by the Matterns during this
growing season, i.e., since the harvest of the last crop was completed, would be deductible regardless of
the effective date that is inserted into the lease. Please confirm by return letter when you send back a
copy of the completely executed lease, that is the City's understanding and agreement.
Please let me know if there is anything else you need from me. I understand that the Matterns' liability
insurance carrier has already issued a certificate of insurance and that they are requesting one from their
workers comp carrier, State Compensation Insurance Fund. If these certificates are not received please
let me know, and I will see to that the City gets them.
Yours very truly,
STEVEN P. BELZER
SPB:dtm
cc: Richard and Donna Mattern
I
sAclients\steve's cases\0207-001 mattemVapport0608071.doc - -
428 J Street, Suite 530 e Sacramento, CA 95814 j }
VINEYARD
BY THIS LEASE (hereinafter "Lease"), the City of Ukiah, a general law municipal
corporation ("City"), leases to Richard and Donna Mattern, husband and wife ("Lessee") "the
Premises" in the City of Ukiah, California, the legal description of which is set forth in the
attached Exhibit A, upon the terms and conditions and for the consideration as stated in this
Lease.
PREFACE- RECITALS
1. On J v o c- 11 , 2007, the City purchased the Premises from Lessee pursuant to a
Settlement and Release Agreement ("Settlement Agreement"), dated.>>eeAti-0, 200&5
2. Prior to selling the Premises to the City, Lessee owned the Premises upon which it has
developed a 14 acre vineyard of Chardonnay grapevines, which Lessee has farmed for more
than 20 years.
3. Under the Settlement Agreement, the City has agreed to lease the Premises to the Lessee
to continue its farming operation for the Rent specified in this Lease.
4. The City has acquired the Premises from the Lessee for its use in the operation of its
wastewater treatment plant on City owned property adjacent to the south boundary of the
Premises ("Wastewater Treatment Plant Project"). The City has agreed to lease the Premises
to the Lessee, until it needs the property for that project, provided, however, that the City.
may terminate the lease for any reason five (5) years after the Commencement Date.
5. Lessee is responsible for and fully informed about the condition of the Premises and
the vineyard, including apparent and latent conditions.
SECTION 1 OCCUPANCY
1.01 Lease Term. This Lease shall commence on Jooc-.26 , 2007 ("Commencement
Date"), and shall continue thereafter from year to year, terminating six (6) months
following Lessee's receipt of a notice of termination of this Lease from the City, based on
City's determination that it needs the Premises for the Wastewater Treatment Plant
Project, or the City's receipt of a notice of termination of this Lease from Lessee, said
notice to be delivered by first class mail; provided, however, that the City may terminate
this Lease for any reason after five years from the Commencement Date. On such date as
the CITY delivers notice of termination of said lease to Lessee, the City shall use its best
efforts to permit Lessee to harvest the crop then growing on the Premises. In the event
that is not possible, the City agrees to pay Lessee compensation equal to eighty five
percent (85%) of the preceding five (5) years average tonnage yield and price per ton for
said crop.
1.02 Condition of Premises. Lessee enters into this Agreement solely in reliance on
Lessee's own knowledge of the condition of the premises and not by reason of any
representation by City. Lessee accepts the Premises in its present condition "AS IS
WHERE IS." No reliance shall be placed on any opinion, material, or information
provided by or through City, and Lessee does so at its own risk, cost and expense.
1.03 Right to Terminate. This lease is conveyed based, in part, on the financial gain to
the City accruing from the Lessee's operation and maintenance of a vineyard on the
Premises. If Lessee fails or refuses to operate and maintain the vineyard or to account to
the City for its income and expenses of such operation and maintenance in accordance
with the requirements of this Lease, City shall have a right to terminate this Lease by
giving Lessee written notice of City's decision to terminate. The Termination Date shall
be set forth in the notice.
SECTION 2 USE OF PREMISES
2.01 Permitted Use. Lessee shall use the premises exclusively as a Chardonnay vineyard
with the same number of grapevines and cultivated acres as exists on the Commencement
Date. Lessee shall put the Premises to full beneficial use in accordance with the best industry
standards in Mendocino County. To the extent consistent with such standards, Lessee shall
irrigate, spray, fertilize, prune, cultivate and weed the Premises and replace grapevines,
irrigation facilities and trellis systems in accordance with its past practices. For the reasons
that this lease may be terminated by City on its fifth anniversary date and Chardonnay
grapevines do not come into production for three to five years after planting, Lessee's
obligation to replace grapevines shall not extend beyond the second anniversary of this lease
unless City informs Lessee that this lease shall be extended beyond its fifth anniversary date.
In accordance with that same past practice, Lessee shall employ workers, use the farm
equipment, and devote its time and attention to the cultivation, maintenance, operation,
harvesting and marketing of the vineyard and its grape production. Lessee shall only use
pesticides, herbicides or other substances classified under state or federal law as toxic or
hazardous substances in strict compliance with all applicable laws and regulations governing
their use, storage, transportation and disposal. Failure to comply with any portion of this
paragraph 2.01 shall constitute a default under this Lease.
SECTION 3 PAYMENT
Payments made hereunder will be applied in the following order: (1) interest, (2) rent, (3)
taxes, and (4) then to charges.
3.01 Rent. As and for rent, Lessee shall pay to City fifteen percent (15%) of the annual net
profit from the sale of the harvested grapes. Annual net profit will be computed by
subtracting allowable expenses from the gross revenues from the sale of grapes produced by
the vineyard.
Allowable expenses include (1) the actual cost of fuel, water, electricity, materials and
supplies used and consumed in the operation and maintenance of the vineyard, (2) actual
labor costs of workers employed in the operation and maintenance of the vineyard, including
the harvest and delivery of grapes, (3) equipment costs apportioned for vineyard use,
excluding depreciation, (4) cost of insurance required under this Lease, (5) ad valorem real
property and business inventory or similar personal property taxes imposed on the Premises
or the vineyard operation by Mendocino County, (6) customary and reasonable accounting
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and bookkeeping expenses actually incurred in the operation of the vineyard and compliance
with this Lease, and (7) any other operating expenses customarily deductable by Lessee on
Lessee's Federal Income Tax return, except for depreciation.
Lessee shall provide the City with an annual accounting of its gross revenue and allowable
expenses in sufficient detail to allow for verification and audit, if requested by the City. The
annual accounting used to compute the rent and the payment of rent shall be due on or before
the later of December 31 of each year, or thirty (30 days after receipt by Lessee of final
payment for the sale of grapes harvested from the Premises.
3.02 No Counterclaim, Setoff, or Abatement of Rent. Rent shall be paid without the
requirement of prior notice or demand by City, and shall not be subject to any counterclaim,
setoff, deduction or defense and without abatement. The obligations and liabilities of Lessee
hereunder shall in no way be released, discharged or otherwise affected.
3.03 Records. The Lessee shall prepare, maintain, and keep records in accordance with
generally accepted accounting principles consistently applied. A clear, complete, detailed
record and accounting of business activity that affects payments due the City shall be
maintained at a location in the vicinity of the City for a period of at least three (3) years
following payment of rent. Further, the Lessee shall prepare, maintain, and keep records of
management practices conducted on the Premises, including, but not limited to, the use of
pesticides, for the term of this Lease or as required by law or any permit.
3.04 Right to Examine Books and Records. The acceptance by the City of any payment
shall be without prejudice to the City's right to examine the Lessee's books and records to
verify the amount due to City. Upon ten (10) business days advance written notice, Lessee
shall authorize and permit the City or its agents to examine any and all books, records and
files of all kinds for the purpose of determining and enforcing compliance with the provisions
of this Lease. Lessee shall make such books and records available for review at Lessee's
offices within or in the vicinity of the City, or if Lessee no longer maintains an office in such
location, Lessee shall make such books and records available at the Ukiah Civic Center, 300
Seminary Avenue, Ukiah, CA. 95482. Lessee shall pay any amount between the amounts
paid and amounts determined to be due upon inspection of the books (Discrepancy Amount)
within thirty days of City mailing an invoice for the Discrepancy Amount to Lessee. City
shall pay the costs of conducting the audit or examination of Lessee's records, unless the
audit reveals a Discrepancy Amount in which event the Lessee shall pay the costs of the audit
not to exceed an amount equal to the Discrepancy Amount. Examination and/or audit
provided for in this section may occur not more frequently than once annually.
3.05 Rent Payments. All rent payments must be received by the City at the location
specified in Section 13.10 by the due date..
SECTION 4 RESERVATIONS
4.01 Compliance. The City shall have access to the Premises at all reasonable times to
determine and secure compliance with this Lease. Failure to inspect or enforce compliance
shall not be construed as a waiver of the City's right to declare a breach, nor relieve Lessee of
any liability to the City for any breach of the terms, conditions, or requirements of this Lease.
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4.02 Compatible Uses. City reserves for itself, its successors and assigns, the right at all
times for any purpose to cross and re-cross the Premises and to make any other use of the
Premises as long as the City's activities on the Premises do not unreasonably interfere with
the activities permitted under this Lease.
SECTION 5 SPECIAL RESTRICTONS
5.01 Conformance with Laws. Lessee shall cause all work on the Premises and all business
conducted thereon during the term to be performed in accordance with all applicable laws
and all directions and regulations of all governmental agencies and the representatives of
such agencies having jurisdiction. In no event shall Lessee undertake or suffer any activity to
be conducted upon the Premises which constitutes a nuisance or which is a threat to the
health or welfare of the general public.
5.02 Other Restrictions on Use.
1. Except removal of improvements in the ordinary course of vineyard maintenance
and repair, Lessee shall not remove existing improvements on the Premises
without prior written consent of the City.
2. Lessee shall take all reasonable precautions to protect the land and improvements
on the Premises from damage from any cause.
SECTION 6 UTILITIES, TAXES, LIENS
6.01 Utilities and Maintenance. During the term of this Lease, Lessee shall pay all expenses
incurred by Lessee in the use, enjoyment, and operation of the Premises, including, but not
limited to, utility charges and all costs of maintaining and repairing the Premises and all
improvements thereon whether now existing or hereafter installed by Lessee. Lessee shall
not be Lessee shall indemnify and hold the City harmless against any loss, liability, or
expense resulting from any failure of Lessee to pay all such charges when due.
6.02 Taxes and Assessments.
1. Lessee shall pay during the term of this Lease all taxes, including ad valorem real
property taxes, and any other governmental charges of any kind applicable or
attributable to the installation of Lessee owned improvements on the Premises,
Lessee's leasehold interest therein, and Lessee's use and enjoyment thereof.
2. Lessee shall pay all assessments that are legally required to be paid now or that
may be charged during the lease term to the Premises for Lessee owned
improvements thereon. Lessee shall not cause or suffer the imposition of any
assessment upon the Premises without the prior written consent of City. In the
event any new assessment is proposed which affects the Premises, the party
having knowledge shall immediately notify the other party of such proposal after
the former has knowledge or receives notice thereof.
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6.03 Lessee Liens. Lessee shall not suffer or permit any lien to be filed against the City's
interest in the Premises, or improvements thereon by reason of work, labor, or services
performed thereon or materials supplied to, by or through the Lessee. If any such lien is filed,
Lessee shall cause the same to be discharged of record within thirty (30) days after the date
of filing or creation of such lien unless other arrangements are authorized in writing by the
City in advance. Lessee shall indemnify the City for any costs, damages or expenses
(including attorneys' fees and court costs) incurred as a result of such liens or in obtaining
their discharge whether such costs, damages or expenses were incurred prior or subsequent to
termination or cancellation of this Lease.
SECTION 7 LESSEES INDEMNITY; INSURANCE REQUIREMENTS
7.01 Indemnity. Lessee releases, indemnifies and shall defend (with counsel acceptable to
City) City, its employees, officers, and agents from and against any and all claims arising out
of the use, occupation or control of the Premises by Lessee, its agents, and employees. A
"claim" as used in this subsection means any claim of any nature whatsoever for penalties,
financial loss, damages (including but not limited to bodily injury, sickness, disease or death,
or injury to or destruction of property, land and other natural resources including the loss of
use thereof), costs or expenses (including but not limited to attorney's fees), whether or not
resulting in a suit or action or reduced to judgment. This release and the obligation to
indemnify shall not be eliminated or reduced by the concurrent negligence of the City, its
officials, employees, or agents, except as provided in this subsection. Lessee shall not be
required to indemnify City from City's sole and active negligence or willfully wrongful acts
or omissions.
7.02 Insurance Requirements.
Lessee shall, at all times during the term of this Lease, buy and maintain insurance of
the types and amounts listed below, the premiums for which shall be paid by Lessee as an
operating expense of the Vineyard. Failure to buy and maintain the required insurance may
result in the termination of this Lease at City's option. If Lessee fails to procure and maintain
the insurance described below, Lessee shall be in material breach of this Lease. In case of
breach, City, at its election, shall have the right to terminate the Lease or to procure and
maintain such insurance, the premiums for which shall be paid to the City from the gross
income from Vineyard operations. Such payment shall be additional rent due under this lease.
A'. Minimum Scope of Insurance
Coverage shall be at least as broad as:
Insurance Services Office ("ISO) Commercial General Liability
Coverage Form No. CG 00 01 11 85.
2. ISO Form No. CA 0001 (Ed. 1/87) covering Automobile Liability,
Code 1 "any auto" or Code 8, 9 if no owned autos and endorsement
CA 0025.
3. Worker's Compensation Insurance as required by the Labor Code of
the State of California and Employers Liability Insurance.
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B. Minimum Limits of Insurance
Lessee shall maintain limits no less than:
1. General Liability: $1,000,000 combined single limit per occurrence
for bodily injury, personal injury and property damage. If
Commercial General Liability Insurance or other form with a general
aggregate limit is used, the general aggregate limit shall apply
separately to the work performed under this Agreement, or the
aggregate limit shall be twice the prescribed per occurrence limit.
2. Automobile Liability: $1,000,000 combined single limit per accident
for bodily injury and property damage.
3. Worker's Compensation and Employers Liability: Worker's
compensation limits as required by the Labor Code of the State of
California and Employers Liability limits of $1,000,000 per accident.
C. Deductibles
Any deductibles must be declared to and approved by the City. At the option
of the City, either the insurer shall reduce or eliminate such deductibles as
respects to the City, its officers, officials, employees and volunteers; or the
Lessee shall procure a bond guaranteeing payment of losses and related
investigations, claim administration and defense expenses.
D. Other Insurance Provisions
The policies are to contain, or be endorsed to contain, the following
provisions:
1. General Liability and Automobile Liability Coverages
a. The City, it officers, officials, employees and volunteers are
to be covered as additional insureds as respects; liability
arising out of activities performed by or on behalf of the
Lessee, products and completed operations of the Lessee,
premises owned, occupied or used by the Lessee, or
automobiles owned, hired or borrowed by the Lessee. The
coverage shall contain no special limitations on the scope-of-
protection afforded to the City, its officers, officials,
employees or volunteers.
b. The Lessee's insurance coverage shall be primary insurance as
respects to the City, its officers, officials, employees and
volunteers. Any insurance or self-insurance maintained by
the City, its officers, officials, employees or volunteers shall
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be excess of the Lessee's insurance and shall not contribute
with it.
Any failure to comply with reporting provisions of the
policies shall not affect coverage provided to the City, its
officers, officials, employees or volunteers.
d. The Lessee's insurance shall apply separately to each insured
against whom claim is made or suit is brought, except with
respect to the limits of the insurer's liability.
2. Worker's Compensation and Employers Liability Coverage
The Workers Compensation insurer shall agree to waive all rights of
subrogation against the City, its officers, officials, employees and
volunteers for losses arising from Lessee's activities pursuant to this
Lease.
4. All Coverages
Each Insurance policy required by this Paragraph 7.02 shall be
endorsed to state that coverage shall not be suspended, voided,
canceled by either parry, reduced in coverage or in limits except after
the insurer has exercised its best efforts to give thirty (30) days prior
written notice by certified mail, return receipt requested, to the City.
E. Acceptability of Insurers
Insurance is to be placed with admitted California insurers with an A.M.
Best's rating of no less than A- for financial strength, as for long-term credit
rating and AMB-1 for short-tern credit rating.
F. Verification of Coverage
Lessee shall furnish the City with certificates of Insurance and with original
endorsements effecting coverage required by this Lease. The Certificates and
Endorsements for each insurance policy are to be signed by a person
authorized by that insurer to bind coverage on its behalf. The Certificates and
Endorsements are to be on forms provided or approved by the City. All
Certificates and Endorsements are to be received and approved by the City
before the Commencement Date. The City reserves the right to require
complete, certified copies of all required insurance policies, at any time
G. Subcontractors
If Lessee uses contractors or subcontractors in its farming operations on the
Premises, it shall cover them under its polices or require them to separately
comply with the insurance requirements set forth in this Paragraph 7.02.
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PropeM Insurance. Lessee shall buy and maintain property insurance covering all
fixtures, equipment, and lessee improvements and betterments on the Leased Premises. Such
insurance shall be written on an all risks basis and, at a minimum, cover the perils insured
under ISO special causes of loss form CP 10 30, and cover the full replacement cost of the
property insured. Such insurance may have commercially reasonable deductibles. Any
coinsurance requirement in the policy shall be waived. City shall be included as an insured
and a loss payee under the property insurance policy. Lessee shall buy and maintain boiler
and machinery insurance required by contract documents or by law, covering real property,
fixtures, equipment and tenants improvements or betterments from loss or damage caused by
the explosion of steam boilers or pipes.
SECTION 8 HARMFUL SUBSTANCES
8.01 Hazardous, Toxic, or Harmful Substances.
1. Deleterious Material. Lessee shall not make, or suffer to be made, any filling in of
the Premises or any deposit of rock, earth, ballast, refuse, garbage, waste matter,
chemical, biological or other wastes, hydrocarbons, any other pollutants, or other
matter within or upon the Premises, except as approved in writing by the City, or
unless permitted by Subsection 2.01 (Permitted Use). If the Lessee fails to
remove all nonapproved fill material, refuse, garbage, wastes or any other of the
above materials from the Premises, the Lessee agrees that the City may, but is not
obligated to, remove such materials and charge the Lessee for the cost of removal
and disposal.
2. Hazardous Toxic or Harmful Substances.
a. Lessee shall not keep on or about the Premises, any substances now or
hereinafter designated as or containing components now or hereinafter
designated as hazardous, toxic, dangerous, or harmful, and/or which are
subject to regulation as hazardous, toxic, dangerous, or harmful by any
federal, state or local law, regulation, statute or ordinance (hereinafter
collectively referred to as "Hazardous Substances") unless such are
necessary to carry out Lessee's permitted use under Subsection 2.01
(Permitted Use) and unless Lessee fully complies with all federal, City
and local laws, regulations, statutes, and ordinances, now in existence or
as subsequently enacted or amended. Lessee shall:
(1) To the extent that Lessee now knows of, or becomes aware in the
future of such, immediately notify the City of. all spills or releases
of any Hazardous Substance affecting the Premises; all failures to
comply with any federal, state, or local law, regulation or
ordinance, as now enacted or as subsequently enacted or amended;
all inspections of the Premises by, or any correspondence, orders,
citations, or notifications from any regulatory entity concerning
Hazardous Substances affecting the Premises; and all regulatory
orders or fines or all response or interim cleanup actions taken by
or proposed to be taken by any government entity or private party
concerning the Premises; and
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(2) On request, provide copies to the City of any and all
correspondence, pleadings, and/or reports received by or required
of Lessee or issued or written by Lessee or on Lessee's behalf
with respect to the use, presence, transportation or generation of
Hazardous Substances related to the Premises.
b. Lessee shall be fully and completely liable to the City, and shall
indemnify, defend, and save harmless City and its agencies, employees,
officers, and agents with respect to any and all damages, costs, fees
(including attorneys' fees and costs), penalties (civil and criminal), and
cleanup costs assessed against or imposed as a result of Lessee's use,
disposal, transportation, generation and/or sale of Hazardous Substances
or that of Lessee's employees, agents, assigns, sublessees, contractors,
subcontractors, licensees or invitees, and for any breach of this subsection.
SECTION 9 ASSIGNMENTS
9.01 Lessee Assignment. Lessee shall not hypothecate, mortgage, assign, sublease, transfer,
or otherwise alienate this Lease, or any interest therein, or enter into any sublease of the
Premises without the prior written consent of the City. Any such assignment or sublease
shall constitute a default under this Lease and shall entitle the City to terminate this Lease,
and recover possession of the Premises from Lessee and its assigns or subtenants. No act or
omission by City after any assignment or sublease of the Premises, including the acceptance
of rent, shall waive the City's right to terminate this Lease based on such assignment or
sublease. Provided, however, that Lessee may, with prior notice to the City, assign or
transfer this lease to a family or other trust created by Lessee for the benefit of Lessee, or
either of them, or their heirs or descendants; or to a business entity which is wholly owned by
Lessees, created for the purpose of operating the vineyard upon the premises and if
applicable other vineyards owned or operated by Lessee.
SECTION 10 IMPROVEMENTS
10.01 Authorized Improvements. No additional improvements, except in accordance with
paragraph 2.0 1, shall be placed on the Premises without the prior written consent of the City.
10.02 Ownership of Improvements. All improvements existing on the Premises on the
Commencement Date, including grapevines, stakes, and irrigation system components belong
to the City. During the Term of this Lease, the improvements constructed by Lessee,
including without limitation all additions, alterations and improvements thereto or
replacements thereof and all appurtenant fixtures shall be the property of the City. At early
termination, or expiration of this Lease, all existing improvements and all additions,
alterations and improvements thereto or replacements thereof and all appurtenant fixtures,
shall remain the property of the City, unless City elects in writing to have Lessee remove the
same at the Lessee's sole expense. Those improvements of which City retains ownership shall
transfer to the City free of cost and free of subsequent liability to the Lessee. Throughout the
term of this Agreement, Lessee shall not permit any claim of lien made by any mechanic,
materialman, laborer, or other similar liens to stand against the Premises for work or labor
done, services performed, or materials used or furnished to be used in or about the Premises
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for or in connection with any construction, improvements or maintenance or repair thereon
made or permitted to be made by Lessee, its agents, or sublessees. Any liens, encumbrances
or claims of third parties with respect to any of the foregoing, shall be expressly subordinate
and subject to the rights of City under this Agreement.
10.03 Third Party Claims. Lessee shall indemnify, defend and hold harmless City and the
Premises from and against all claims and liabilities arising by virtue of or relating to
construction of the authorized improvements or repairs made at any time to the authorized
improvements (including repairs). Lessee shall regularly and timely pay any and all amounts
properly payable to third parties with respect to such work and will maintain its books and
records as provided in Subsection 3.03, with respect to all aspects of such work and materials
therefore, and will make them available for inspection by City or its representatives as
requested.
10.04 Permits; Compliance with Codes. Lessee shall cause all work on the Premises
during the Term to be performed in accordance with all applicable laws and to cause the
authorized improvements and the Premises to comply with all applicable governmental
laws, statutes, rules, regulations and/or ordinances that apply to the Premises during the
Agreement Term, whether now in effect, or hereinafter adopted or enacted. The costs of
such compliance shall be considered an operating expense of the Vineyard operation payable
by Lessee from the gross revenues of the Vineyard operation.
10.05 City's Repairs. City shall not be required or obligated to make any changes,
alterations, additions, improvements, or repairs in, on, or about the Premises, or any part
thereof.
10.06 Effect of Damage or Destruction. In the event of any damage to or destruction of the
Premises or any improvements thereon from any causes whatever, Lessee shall promptly give
written notice thereof to City and may in its sole discretion elect either to repair and restore
the Premises or to terminate the lease. If this Lease is not terminated by Lessee, there shall be
an abatement in Rent during such repair and restoration to the extent that the quantity or
marketability of the crop growing at the time damage or destruction occurs is diminished.
Any insurance proceeds from Lessee's insurance payable by reason of such damage or
destruction shall be made available to pay the cost of such reconstruction; provided, however,
in the event Lessee is in default under the terms of this Lease at the time such damage or
destruction occurs, City may elect to terminate this Lease, and Lessee shall thereafter have
the right to retain insurance proceeds from Lessee's insurance payable as a result of such
damage or destruction to the extent that such insurance replaces net income Lessee would
otherwise have realized from the damaged or destroyed crop.
SECTION 11 ROADS
11.01 Access across Premises. The City is currently constructing additions to its wastewater
treatment plant on parcels of real property that are contiguous to the Premises, and which are
known as Mendocino County Assessor's Parcel Nos. 184-100-02 and 184-100-06 ("WWTP
Property"). As soon as said construction project permits, and for the duration of this Lease,
Lessee is authorized to use the existing dirt road outside the south property line of the
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Premises which is located on the WWTP Property as needed to access the Premises from the
south end for purposes of cultivating, maintaining, spraying and harvesting the vineyard.
11.02 Road Repair. At its own expense and without any expense to the City, Lessee shall
develop, maintain and repair the access road in a condition required for its use by Lessee and
in a condition that does not cause damage to City property or other adjacent property owners.
Lessee shall not be responsible for the maintenance or repair of damage to, or conditions of
the access road caused by City's acts.
11:03 Improvements. Lessee shall not construct improvements to the access road without
the prior written approval of the City Manager or his/her delegate. The improvements shall
be at the sole cost of the Lessee.
11.04 Insurance. The provisions under Section 7 - Lessees' Indemnity; Insurance
Requirements shall apply to Lessee's use of the road authorized herein.
SECTION 12 DEFAULT AND REMEDIES
12.01 Default by Lessee. In the event of any material breach of any provision of this Lease
by Lessee, City shall be entitled to terminate this Lease and seek any other remedies set forth
in this Lease or otherwise available at law or equity. City shall not terminate this Lease if the
breach pertains to a matter other than the payment of any monies due under this Lease, unless
Lessee shall fail to promptly commence to cure the breach and shall cure the breach within
forty-five (45) days of notice of default from City. If such breach is non-monetary in nature,
and, as determined by City, is not reasonably susceptible of being cured in said forty-five (45)
days (provided that the lack of funds, or the failure or refusal to spend funds, shall not be an
excuse for a failure to cure), Lessee shall commence to cure such breach within said period
and diligently pursue such action with continuity to completion.
12.02 Termination of Agreements. Whether or not City elects to terminate this Lease on
account of any breach by Lessee, City shall have a right to terminate any and all subleases,
licenses, concessions or other arrangement for possession affecting Premises. Alternatively,
City, in its sole discretion, may succeed to Lessee's interest in such sublease, license,
concession or arrangement, and Lessee shall have no further right to or interest in the rent or
other consideration receivable thereunder.
12.03 Survival. All obligations of Lessee to be perfonned prior to the expiration or earlier
termination shall cease upon the termination or expiration of this Lease, provided however,
that all clauses of this Lease that require performance beyond the termination or expiration
date shall survive the termination or expiration date of this Lease. Upon expiration or earlier
termination of this Lease, the rights of Lessee and of all persons, firms, corporations, and
entities claiming under Lessee in and to the Premises and all improvements hereon, unless
specified otherwise in this Agreement, shall cease.
12.04 City's Right to Cure Defaults. If Lessee fails to perform and is in default of any
undertaking or promise contained herein, the City shall have the option, but is not obligated,
to make such performance after giving ten (10) days written notice to the Lessee. Except to
the extent that Lessee would be entitled to deduct Allowable Expenses. as provided in
Paragraph 3.01, the City's costs and expense to correct Lessee's failure to perform shall be
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reimbursed by Lessee and shall be immediately due and payable, together with interest
accruing from the date such cost or expense is incurred.
12.05 Remedies Cumulative. The specified remedies to which the City may resort under the
terms of this Agreement are cumulative and are not intended to be exclusive of any other
remedies or means of redress to which City may lawfully be entitled in case of any breach or
threatened breach by Lessee of any provision of this Agreement.
12.06 Nonwaiver. Waiver by the City of strict performance of any provision of this Lease
shall not be a waiver of nor prejudice the City's right to require strict performance of the
same provision in the future or of any other provision. The acceptance of performance, rent,
or any other sum owing, by City following a breach by the Lessee of any provision of this
Agreement shall not constitute a waiver of any right of the City with respect to such breach
and City shall be deemed to have waived any right hereunder only if City shall expressly do
so in writing.
12.07 Force Majeure. The Lessee's failure to comply with any of the obligations under this
Leasse shall be excused only if due to causes beyond Lessee's control and without the fault or
negligence of the Lessee, including acts of God, acts of the public enemy, acts of any
government, fires, floods, epidemics and strikes.
12.08 Insolvency of Lessee. Any action taken or suffered by Lessee as a debtor under any
insolvency or bankruptcy laws, including the filing of a voluntary or involuntary petition in
the United States bankruptcy court, any assignment for the benefit of creditors or the
appointment of a receiver shall constitute a breach of this Lease. In such event, Lessor shall
have the right to terminate this lease and retake possession of the Premises and any
improvements thereon. Alternatively, if Lessee successfully petitions a bankruptcy court
under 1 I U.S.C. §365, or any successor statute, to assume this Lease as an executory contract
or lease, the parties agree that the rent hereunder shall immediately increase to its fair rental
value, which shall be based on then prevailing price per ton of Chardonnay grapes, but in no
even less than $1000 per ton. The rent shall become 50% of the price per ton of harvested
grapes which rent shall be received by City not less than 30 days after the grapes are
harvested.
SECTION 13 GENERAL PROVISIONS
13.01 Governing Law. This Agreement shall be construed, interpreted and enforced
pursuant to the laws of the State of California. Venue shall be in Mendocino County each
party waving any right to object to venue, to seek the appointment of an out of county judge
or to seek a change of venue. The terms of this Agreement shall be given their ordinary
meaning and shall not be presumed construed in favor of or against either party hereto.
13.02 No Partnership. The City is not a partner nor a joint venturer with the Lessee in
connection with the activities conducted and business carried on under this Lease, and the
City shall have no obligation with respect to the Lessee's debts or other liabilities.
13.03 Preservation of Markers. Lessee shall not destroy any land survey corner monuments
and reference points (including but not limited to corner markers, witness objects, or line
markers) on the Premises.
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13.04 Interpretation and Numbering. Paragraph and Subparagraph numbers, headings, or
titles are for convenience only and are not to be construed to limit or to extend the meaning
of any part of this Lease.
13.05 Time of Essence. Time is expressly declared to be of the essence of this Agreement
and each and every covenant of Lessee and the City hereunder.
13.06 Amendments. Any amendments, revisions, supplements, or additions to this
Agreement or the attached exhibits shall be made in writing executed by the parties hereto,
and neither City nor Lessee shall be bound by verbal or implied agreements. Such changes
may be made by re-execution of the signature page and the deletion and addition of the
appropriate new effective pages or exhibits governing the change, if any.
13.07 Entire Agreement. This written Lease or its successor or replacement contain the
entire agreement of the parties hereto with respect to the matters covered hereby, and no
other agreement, statement or promise made by any party hereto, or to any employee, officer
or agent of any party hereto, which is not contained herein, shall be binding or valid.
13.08 Invalidity. If any term or provision of this Agreement or the application thereof to any
person or circumstance shall to any extent prove to be invalid, unenforceable, void, or illegal,
the remainder of this Agreement, or the application of such term or provision to persons or
circumstances other than those as to which it is invalid or unenforceable, shall be not affected
thereby, and each term and provision of this Lease shall be valid and be enforced as written
to the fullest extent permitted by law.
13.09 Attorney Fees. If either party brings suit to interpret or enforce any provision of the
agreement, the prevailing party shall be entitled to recover from the other parry reasonable
attorney fees, and court costs actually incurred in connection therewith, including those
incurred on appeal, in addition to all other amounts provided by law.
13.10 Notices and Submittals. Any notice or submittal given under this Lease shall be
deemed as received when delivered by hand or upon deposit in the United States mail with
first-class postage affixed, addressed as noted. Changes of address may be given in
accordance with this section. Any notice or submittal given under this Lease shall be:
To the City:
Ukiah Civic Center
Attention: City Manager
300 Seminary Avenue
Ukiah, CA. 95482
To the Lessee:
Richard and Donna Mattern
P. O. Box 90
Ukiah, CA 95482
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From:Law Offices of Belzer Carr 916 442 6510 05/30/2007 07:54 #147 P.015/015
14. Dispute Resolution. Before commencing litigation, other than an unlawful detainer
action, the Party that desires to initiate such action (the Complainant) must make a good faith
attempt to mediate such dispute in accordance with this Section. The Complainant shall send
the other party(ies) (the- Respondent) written notice of the nature of the dispute, the facts
giving rise to such claim and the Complainant's desire to mediate the matter (the Mediation
Notice). The Mediation Notice shall name a mediator (who shall have at least three (3) years'
experience mediating real estate disputes in Mendocino County and no personal or business .
relationship with the Complainant). The parties shall share the cost of initiating and
conducting mediation equally. Within seven (7) days of Respondent's receipt of the
Mediation Notice, Respondent shall inform Complainant in writing if Respondent does not
agree with Complainant's choice of mediator (the Rejection Notice). Such Rejection Notice
shall include the name of Respondent's choice of qualified mediator as provided in this
Section. If the parties are unable to agree upon a mutually acceptable mediator within seven
(7) days of Complainant's receipt of the Rejection Notice, they shall have no fiirther
obligation to engage in mediation. Within thirty (30) days after a mutually acceptable
mediator is chosen, the parties shall schedule and attend a mediation session and attempt in
good faith to resolve their dispute. If the mediation does not resolve the dispute or if the
Respondent refuses to attend such mediation, the Complainant may commence litigation, The
requirements of this provision shall not apply under circumstances where the City would be
entitled to unlawful detainer relief.
WHEREFORE, the parties have entered this Lease effective on the Commencement Date
CITY OF UKIAH
B.
Can ace Horsley, City Man ger
Approved as to form:
Da pp0i-t, City Attorney
RICHARD AND DONNA MATTERN
<7 p-
By~;
Richard Matterm
Utz
Donna Mattern
Approved as to form:
Law Offices of Belzer & Carr
By:
Steven P. Belzer
Attorney for Lessee
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