Form 25-9

Grazing Lease

Basic Information

Date:

Landlord:

Landlord’s Address:

Tenant:

Tenant’s Address:

Premises: SURFACE ONLY of approximately [number] acres of land, situated in [county] County, Texas, as described in Exhibit [exhibit number/letter] (“Land”).

The Premises do not include crops or Excluded Improvements located on the Land. Tenant will not be permitted to use the Excluded Improvements.

Excluded Improvements: Any structure, improvement, or equipment situated on the Land and constructed or installed by any person other than Tenant, except for the following: [specify].

Term (months):

Commencement Date:

Termination Date:

Permitted Use: Solely for grazing of [specify].

Base Rent (monthly):

Security Deposit:

Tenant’s Insurance: As required by Insurance Addendum

A.Definitions

A.1.“Agent” means agents, employees, officers, directors, members and partners of the principal, and, to the extent under the control of the principal, invitees.

A.2.“Injury” means (a) harm to or impairment or loss of property or its use or (b) harm to or death of a person.

A.3.“Rent” means Base Rent plus any other amounts of money payable by Tenant to Landlord.

B.Tenant’s Obligations

B.1.Tenant agrees to—

B.1.a.Lease the Premises for the entire Term beginning on the Commencement Date and ending on the Termination Date.

B.1.b.Accept the Premises in their present condition “AS IS,” the Premises being cur­rently suitable for the Permitted Use.

B.1.c.Obey all laws relating to Tenant’s use, maintenance of condition, and occu­pancy of the Premises.

B.1.d.Pay monthly, in advance, without demand, on the first day of the month, the Base Rent to Landlord at Landlord’s Address.

B.1.e.Pay a late charge of 5 percent of any Rent not received by Landlord by the tenth day after it is due.

B.1.f.Pay for all labor, fuel, and utility services used by Tenant.

B.1.g.Pay all taxes on Tenant’s property located on the Premises.

B.1.h.Allow Landlord to inspect the Premises and show the Premises to prospective purchasers or tenants.

B.1.i.Repair, replace, and maintain any part of the Premises used by Tenant.

B.1.j.Repair any damage to the Premises, Land, or Excluded Improvements caused by Tenant.

B.1.k.Maintain the insurance coverages described in the attached Insurance Adden­dum.

B.1.l.Indemnify, defend, and hold Landlord and Landlord’s Agents, suc­cessors, and assigns harmless from any Injury (and any resulting or related claim, action, loss, liability, or reasonable expense, including attorney’s fees and other fees and court and other costs) arising out of Tenant’s or Tenant’s Agents’, successors’, and assigns’ use of the Premises if caused in whole or in part by the acts or omissions of Tenant, its Agents, successors, and assigns, or those acting on Tenant’s behalf, including in whole or in part by their negligent acts or omissions. The indemnity contained in this paragraph (i) is independent of Tenant’s Insurance, (ii) will not be limited by comparative negligence statutes or damages paid under the Workers’ Compensation Act or similar employee benefit acts, (iii) will survive the end of the Term, and (iv) will apply even if an Injury is caused in part by the ordinary negligence or strict liability of Landlord or Landlord’s Agents, successors, and assigns but will not apply to the extent an Injury is caused in whole or in part by the gross negligence or willful misconduct of Landlord or Landlord’s Agents, suc­cessors, and assigns.

B.1.m.Deliver to Landlord a financing statement perfecting the security interest.

B.1.n.Vacate the Premises on the last day of the Term.

B.1.o.Use the highest standards of animal husbandry in grazing the Premises.

B.1.p.Keep all gates on the Premises closed and locked.

B.1.q.Enter and exit the Premises at those places designated by Landlord.

B.2.Tenant agrees not to—

B.2.a.Use the Premises for any purpose other than the Permitted Use.

B.2.b.Create or allow a nuisance or permit any waste of the Premises.

B.2.c.Change Landlord’s lock system.

B.2.d.Alter the Premises, including clearing new roads, moving or erecting any fences, or locating on the Premises any type of manufactured housing or mobile home.

B.2.e.Allow a lien to be placed on the Premises.

B.2.f.Assign this lease or sublease any portion of the Premises without Landlord’s written consent.

B.2.g.Graze more than [number] head of [specify] on the Premises.

B.2.h.Hunt or fish on the Land or allow anyone else to do so.

B.2.i.Litter or leave trash or debris on the Premises.

C.Landlord’s Obligations

C.1.Landlord agrees to—

C.1.a.Lease to Tenant the Premises for the entire Term beginning on the Commence­ment Date and ending on the Termination Date.

C.1.b.Return the Security Deposit to Tenant, less itemized deductions, if any, on or before the sixtieth day after the date Tenant surrenders the Premises.

C.1.c.Obey all laws relating to Landlord’s operation of the Premises.

C.2.Landlord agrees not to—

C.2.a.Allow any use of the Premises inconsistent with the Permitted Use as long as Tenant is not in default.

C.2.b.Unreasonably withhold consent to a proposed assignment or sublease.

D.General Provisions

Landlord and Tenant agree to the following:

D.1.Alterations.      Any physical additions or improvements to the Premises made by Tenant will become the property of Landlord. Landlord may require that Tenant, at termina­tion of this lease and at Tenant’s expense, remove any physical additions and improvements, repair any alterations, and restore the Premises to the condition existing at the Commence­ment Date, normal wear excepted.

D.2.Abatement.      Tenant’s covenant to pay Rent and Landlord’s covenants are inde­pendent. Except as otherwise provided, Tenant may not abate Rent for any reason.

D.3.Release of Claims.      Tenant releases Landlord and Landlord’s Agents, successors, and assigns from all claims or liabilities for any Injury to Tenant or Tenant’s Agents, successors, and assigns or to Tenant’s or Tenant’s Agents’, successors’, and assigns’ property located on the Premises. The release in this paragraph will apply even if the damage or loss is caused, in whole or in part, by the ordinary negligence or strict liability of Landlord or Land­lord’s Agents, successors, and assigns but will not apply to the extent the damage or loss is caused in whole or in part by the gross negligence or will­ful misconduct of Landlord or Landlord’s Agents, successors, and assigns.

D.4.Condemnation/Substantial or Partial Taking

D.4.a.If the Premises cannot be used for the Permitted Use because of condemnation or purchase in lieu of condemnation, this lease will terminate.

D.4.b.If there is a condemnation or purchase in lieu of condemnation and this lease is not terminated, the Rent payable during the unexpired portion of the Term will be adjusted as may be fair and reasonable.

D.4.c.Tenant will have no claim to the condemnation award or proceeds in lieu of condemnation.

D.5.Landlord’s Lien.      Tenant grants to Landlord a security interest in the collateral to secure payment and performance by Tenant of all obligations and payments due from Tenant under this lease. The collateral will include all of Tenant’s crops, livestock, and per­sonal property located or to be located on the Premises, and all products, proceeds, offspring, increase, governmental payments, insurance proceeds, documents of title, and warehouse receipts relating to such property.

This lease is a security agreement under both chapter 9 of the Texas Business and Com­merce Code and the federal Food Security Act of 1985. Landlord may file financing state­ments or continuation statements to perfect or continue the perfection of the security interest. Tenant agrees to furnish to Landlord a list of the names and addresses of any buyer, commis­sion merchant, or selling agent to or through whom Tenant may sell the collateral. Tenant agrees to notify Landlord of the identity of any buyer, commission merchant, selling agent, or warehouse to or with whom Tenant intends to sell or store the collateral within seven days before any sale or storage of the collateral.

D.6.Default by Landlord/Events.      A default by Landlord is the failure to comply with any provision of this lease that is not cured within thirty days after written notice.

D.7.Default by Landlord/Tenant’s Remedies.      Tenant’s remedies for Landlord’s default are to sue for damages and terminate this lease. Tenant may not terminate under this paragraph while in arrears for Rent.

D.8.Default by Tenant/Events.      Defaults by Tenant are (a) failing to pay Rent timely, (b) abandoning the Premises or vacating a substantial portion of the Premises, and (c) failing to comply within ten days after written notice with any provision of this lease other than the defaults set forth in (a) and (b).

D.9.Default by Tenant/Landlord’s Remedies.      Landlord’s remedies for Tenant’s default are to (a) enter and take possession of the Premises and sue for Rent as it accrues; (b) enter and take possession of the Premises, after which Landlord may relet the Premises on behalf of Tenant and receive the Rent directly by reason of the reletting, and Tenant agrees to reimburse Landlord for any expenditures made in order to relet; (c) enter the Premises and perform Tenant’s obligations; and (d) terminate this lease by written notice and sue for dam­ages. Landlord may enter and take possession of the Premises by self-help, by picking or changing locks if necessary, and may lock out Tenant or any other person who may be using the Premises for grazing, until the default is cured, without being liable for damages.

D.10.Default/Waiver.      All waivers must be in writing and signed by the waiving party. Landlord’s failure to enforce any provisions of this lease or its acceptance of late installments of Rent will not be a waiver and will not estop Landlord from enforcing that pro­vision or any other provision of this lease in the future.

D.11.Mitigation.      Landlord and Tenant have a duty to mitigate.

D.12.Security Deposit.      If Tenant defaults, Landlord may use the Security Deposit to pay arrears of Rent, to repair any damage or injury, or to pay any expense or liability incurred by Landlord as a result of the default.

D.13.Holdover.      If Tenant does not vacate the Premises following termination of this lease, Tenant will become a tenant at will and must vacate the Premises on receipt of notice from Landlord. No holding over by Tenant, whether with or without the consent of Landlord, will extend the Term.

D.14.Alternative Dispute Resolution.      Landlord and Tenant agree to mediate in good faith before filing a suit for damages.

D.15.Attorney’s Fees.      If either party retains an attorney to enforce this lease, the party prevailing in litigation is entitled to recover reasonable attorney’s fees and other fees and court and other costs.

D.16.Venue.      Exclusive venue is in the county in which the Premises are located.

D.17.Entire Agreement.      This lease and its exhibits, addenda, and riders are the entire agreement of the parties concerning the lease of the Premises by Landlord to Tenant. Landlord has not made and does not make any representations about the commercial suitability, physical condition, layout, footage, expenses, or operation of the Premises or any other matter affecting or relating to the Premises and this agreement, except as specifically set forth in this lease. As an inducement to Landlord to enter into this lease, Tenant expressly acknowledges and warrants that no such representations have been made and Tenant is not relying on any representations not contained in this lease and any exhibits, addenda, and riders.

D.18.Amendment of Lease.      This lease may be amended only by an instrument in writing signed by Landlord and Tenant.

D.19.Limitation of Warranties.      There are no implied warranties of suitabil­ity, of merchantability, of fitness for a particular purpose, or of any other kind arising out of this lease, and there are no warranties that extend beyond those expressly stated in this lease.

D.20.Notices.      Any notice required or permitted under this lease must be in writing. Any notice required by this lease will be deemed to be given (whether received or not) the ear­lier of receipt or three business days after being deposited with the United States Postal Ser­vice, postage prepaid, certified mail, return receipt requested, and addressed to the intended recipient at the address shown in this lease. Notice may also be given by regular mail, per­sonal delivery, courier delivery, or e-mail and will be effective when received. Any address for notice may be changed by written notice given as provided herein.

D.21.Mineral Interests.      This lease is subordinate to any present or future oil, gas, or other mineral exploration agreements and leases relating to the Land. Landlord will not be lia­ble to Tenant for any damages for actions attributable to those agreements and will receive all consideration paid therefor.

D.22.Landlord’s Use.      Landlord retains the right to permit third parties to use the Premises for hunting, fishing, and other uses that do not materially interfere with Tenant’s grazing rights.

   
[Name of landlord]

   
[Name of tenant]

Insurance Addendum to Lease

Lease

Date:

Landlord:

Tenant:

This insurance addendum is part of the lease.

Tenant agrees to—

1.Maintain the liability insurance policies required below (mark applicable boxes) during the Term and any period before or after the Term when Tenant is present on the Prem­ises:

2.Comply with the following additional insurance requirements:

a.All liability policies must be endorsed to name Landlord as an “additional insured” on a form that does not exclude coverage for the sole or contributory ordinary negligence of Landlord and must not be endorsed to exclude the sole negligence of Landlord from the definition of “insured contract.”

b.Certificates of insurance and copies of any additional insured and waiver of subrogation endorsements must be delivered by Tenant to Landlord before entering the Premises and thereafter at least ten days before the expiration of the policies.