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18-0821_THE ECOLOGY CENTER_Letter Agreement August 21 , 2018 City of San Juan Capistrano 32400 Paseo Adelanto San Juan Capistrano, CA 92675 Attention: City Manager Re: Letter Agreement Regarding Delinquent Water Bill for the Property Located at 32681 Alipaz Street, San Juan Capistrano Dear City Manager: Reference is made to that certain License Agreement (the "SCF License Agreement), dated as of May 16, 2008, by and between City of San Juan Capistrano, a California municipal corporation, and the San Juan Capistrano Community Redevelopment Agency, a public body, corporate and politic (collectively, the "City") and South Coast Farms ("SCF'). WHEREAS, SCF is liable to the City for certain delinquent water utility bills in connection with the Property under the SCF License Agreement in excess of $306,591 .29 (the "Legacy Water Debt"); WHEREAS, the City and Ecocenter, Inc., dba The Ecology Center, a California nonprofit public benefit corporation ("TEC") have entered into that certain License Agreement (the "TEC License Agreement"), dated as of August 21, 2018; WHEREAS, in connection with the TEC License Agreement, TEC is interested in entering into a services agreement with SCF (the "Services Agreement'); WHEREAS, contingent on the execution of the Services Agreement and on the terms contained in this Letter Agreement (the "Agreement'), TEC is interested in making certain payments toward the principal of the Legacy Water Debt during the term of the TEC License Agreement in the manner set forth in this letter; and NOW, THEREFORE, in consideration of the foregoing recitals, TEC and the City hereby agree to do the following in order to reduce the Legacy Water Debt: 1. Schedule of TEC Payments on Legacy Water Debt. Subject to the terms of this Agreement, TEC hereby agrees to make the following payments to the City ("Water Debt Payments") in respect of the Legacy Water Debt: (a) On or before September 1 , 2018, TEC will make a payment to the City in the amount of eight thousand dollars ($8,000); (b) On or before September 1 , 2019, TEC will make a payment to the City in the amount of eight thousand dollars ($8,000); (c) On or before September 1 , 2020, TEC will make a payment to the City in the amount of eight thousand dollars ($8,000); (d) If TEC exercises its right to a first Extension Term under Section 2 of the TEC License Agreement, then, on or before September 2, 2021, TEC will make a payment to the City in the amount of ten thousand dollars ($10,000); and (e) If TEC exercises its right to a second Extension Term under Section 2 of the TEC License Agreement, then, on or before September 2, 2022, TEC will make a payment to the City in the amount of ten thousand dollars ($10,000). 2. Application of Water Debt Payments to Principal. The City agrees that each Water Debt Payment shall reduce the outstanding principal amount of the Legacy Water Debt. 3. Payoff of the Legacy Water Debt. If the Legacy Water Debt is paid in full by SCF or any other third party in its entirety before the final Water Debt Payment is due under this Agreement, no further payments shall be due under this Agreement. 4. No Assumption of Legacy Water Debt. TEC and the City agree that TEC shall not be deemed to assume the Legacy Water Debt (or any portion thereof) as a result of this Letter Agreement. TEC and the City acknowledge that the Legacy Water Debt exceeds the total of the Water Debt Payments set forth above, and that TEC shall not be liable to the City for any other payments or obligations with respect to the Legacy Water Debt except as specifically set forth in Section 1 of this Letter Agreement. 5. Forbearance. Subject to compliance by TEC with the terms and conditions of this Agreement, the City hereby agrees to forbear from exercising their rights and remedies against SCF with respect to the Legacy Water Debt during the period commencing on the Effective Date (as defined in the TEC License Agreement) and ending on the termination of this Agreement. The City's forbearance, as provided herein, shall immediately and automatically cease without notice or further action on the termination of this Agreement or upon TEC's failure to comply with the terms and conditions of this Agreement. On and from the date of the termination of this Agreement, the City may, in its sole discretion, exercise any and all remedies available to it with respect to the Legacy Water Debt. 6. Taxes. TEC and the City acknowledge that payment of the Water Debt Payments may have tax consequences for the City, SCF, or other third parties, and the City agrees that TEC shall have no liability under this Letter Agreement for any present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any governmental authority (including any interest, additions to tax or penalties applicable thereto) incurred by the City, SCF, or any other third party as a result of TEC's Water Debt Payments under this Agreement, except as required by applicable law. 102733439.3 7. Contingent on Services Agreement. The City and TEC acknowledge and agree that the effectiveness of this Agreement shall be contingent on the execution of that certain Services Agreement, dated5r0740/ham 28 , 2018, by and between TEC and SCF, in a form reasonably acceptable to TEC. 8. Termination. Notwithstanding anything to the contrary in this Agreement, the rights and obligations (including any obligation to make a payment) set forth in this Letter Agreement shall automatically terminate upon termination or expiration of the TEC License Agreement. [Signature Pages Follow] 3 102733439.3 Sincerely yours, ECOCEN ER, INC. By: Name: Evan Marks Title: Executive Director [Signature Page to letter Agreement] 102733439,3 Accepted and Agreed: City of San Juan Capistrano, ' a California municipal corporation By: B i GE , ity Mana er ATTEST: By: ...ro • MARI MO'RI`, City Cler APPROVED AS TO FORM: By: JEFF B' LI City Attorney [Signature Page to Letter Agreement] 102733439.3 SERVICES AGREEMENT This services agreement (the "Agreement"), commencing October 1, 2018 (the "Commencement Date") is between ECOCENTER, INC., a California based nonprofit corporation (the "Organization") and SOUTH COAST FARMS, INC., California based corporation (the "Contractor", and together the "Parties"). RECITALS WHEREAS, the Organization—doing business as The Ecology Center--curates ecological experiences and provides the tools, knowledge and skills that promote healthy communities. Toward these goals,the Organization seeks to engage the Contractor to support efforts in food production and general consulting and implementation of the Organization's directives, as they relate to its farm operations at locations including, but not limited to, 32701 Alipaz Street, San Juan Capistrano, California ("SJC") and 441 Quail Gardens Dr., Encinitas, California ("Farm Lab" and together, the "Properties"). The Services are attached hereto as Exhibit A (the "Services"); and WHEREAS, the Contractor acknowledges the value to both Parties stemming from a . seamless transition of farm and retail operations at SJC, and shall provide certain assets, set forth herein,that can support the continued marketing of the farm and its produce. WHEREAS, in addition, the Organization seeks to purchase a portion of the Contractor's assets, and lease others, attached hereto and governed by separate agreements attached as Exhibits B and C that,in addition to this Agreement,will comprise the"Documentation";and WHEREAS, the Contractor is engaged in the business of certified organic farming and has performed services,the same or similar to those outlined in Exhibit A, and offers the assets for purchase and the lease free of lien or other encumbrances; and WHEREAS, the Parties recognize that each Party shall be operating independently, causing no financial or legal liability to the other; and NOW, THEREFORE, in consideration of the mutual covenants, terms and conditions set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows: AGREEMENT 1. ENGAGEMENT;SERVICES. (a) Engagement. The Organization will retain the Contractor to provide, and the Contractor shall provide, the Services for the Term defined herein, or until terminated in accordance with Section 2(b) of this Agreement. (b) Services The Parties intend that the relationship created by this Agreement shall be that of service recipient and independent contractor. In this regard,Contractor shall retain the exclusive right to control and direct all details of the Services,within the proscribed guidelines set by the Organization. Without limiting the scope of Services, the Contractor shall: Services Agreement 1 (i) Perform the Services. However, if a conflict exists between this Agreement and any term in Exhibit A,the terms in this Agreement will control; (ii) Devote as much productive time, energy, and ability to the performance of his duties under this Agreement as may be necessary to provide the required Services in a timely and productive manner and to the specifications and satisfaction of the Organization; (iii) Provide assets, as reasonably requested by the Organization, paid by Organization if related to transfer of assets, for the purposes of presenting and marketing the farm operations and produce. These include but are not limited to, image and video assets, signage, and databases; (iv) Perform the Services to generally understood best practices with regards to safety, and quality of operations and work product related to organic food production for human consumption; and will maintain requisite or related licenses, certifications, insurance (as described in Section 4 of this Agreement), Worker's Compensation coverage, and all records related to the above for review by the Organization; (v) Regularly communicate with the Organization about progress the Contractor has made in performing the Services; (c) Legal Compliance. The Contractor shall perform the Services in accordance with prevailing industry standards and in compliance with applicable laws, rules, or regulations. (d) Organization's Obligations. The Organization shall make timely payments, according to payment terms set forth in each invoice and the agreed amounts determined on a sixty (60) days, for monies required in advance for operations or for services rendered by the Contractor under this Agreement. 2. TERM AND TERMINATION. (a) Term. This Agreement will become effective as described in section 19 and will continue for a period of twenty-four (24) months ending on September 30, 2020 (the `Term"). Unless it is terminated earlier in accordance with subsection 2(c), this Agreement will continue for the duration of the Term, and until the Services have been satisfactorily completed and the Contractor has been paid in full for those Services. (b) Extension.This Agreement may be extended, at the option of the Organization, for one (1) year, provided notice is given to the Contractor no less than sixty (60) days before the expiration of this Agreement. (c) Termination.This Agreement may be terminated: (i) By either Party, with Cause as defined below without prior notice, in the event of any of the following: a. If the other Party is in material breach of any provision of this Agreement, and if the other Party's material breach is not cured within thirty (30) days of receipt of written notice of the breach; b. If the other Party becomes insolvent, dissolves, liquidates, files a petition for bankruptcy or commences or has commenced against it proceedings relating to bankruptcy,receivership, reorganization or assignment for the benefit of creditors; Services Agreement 2 (ii) Automatically, on the death or disability of the Contractor's principal, George Kibby. (c) Effect of Termination. After the termination of this Agreement for any reason, the Organization shall promptly pay the Contractor for Services rendered and any pre-approved billable expenses incurred before the effective date of the termination, and any payments due for leased or purchased assets. No other compensation, of any nature or type, will be payable after the termination of this Agreement with Cause. 3. FEES & EXPENSES. (a) Fees for the full-time services of the Contractor's principal, George Kibby. The Organization shall pay the Contractor for the Services defined in Exhibit A an annual fee of $102,000 in U.S. currency, paid in monthly installments commencing October 15, 2018 through to expiration or termination of this Agreement. (b) Fees to Contractor for labor and other overhead. The Organization shall pay to the Contractor, on first day of each month, the projected net cost of labor plus ten (10) percent of these expenses as allowable mark-up on the services, plus other incidentals'at net cost, to be pre-approved on a rolling sixty (60) day basis related to the Services. (c) Other direct expenses involved in farm operations and the Services. Including but not limited to the following, the Organization shall pay directly to vendors, suppliers, utilities, etc. all costs related to raw materials,utilities, rents, property taxes, certain insurance policies, and improvements and maintenance. (d) No payments in certain circumstances. No payment will be payable to the Contractor under any of the following circumstances: (i) If the Contractor did not perform materially or complete the Services described in Exhibit A; (ii) If the Contractor did not perform the Services in a manner compliant to standards or regulations or to the reasonable satisfaction of the Organization. (e) No other compensation. The compensation set out above and in Exhibit A will be the Contractor's sole compensation under this Agreement. (f) Contractor obligations. Contractor shall have the right to engage others to assist in the accomplishment of the Services. Contractor shall be solely responsible for paying all compensation owed to any assistants, and for applicable taxes. The Organization has no obligation to pay or withhold any sums for any taxes or payroll expenses, or for notifications relating to those obligations. Rather, Company will report the amount it pays Contractor on IRS Forms 1099,to the extent required to do so under applicable laws. (g) Other Benefits. The Contractor has no claim against the Organization under this Agreement or otherwise for vacation pay, sick leave, retirement benefits, social security, worker's compensation, health or disability benefits, unemployment insurance benefits, or employee benefits of any kind. 2. NATURE OF RELATIONSHIP. Services Agreement 3 (a) Independent contractor status. (I) The relationship of the Parties under this Agreement is one of independent contractor, and no joint venture, partnership, agency, employer-employee, or similar relationship is created in or by this agreement. Neither Party may assume or create obligations on the other Party's behalf, and neither Party may take any action that creates the appearance of such authority. (ii) The Contractor has the sole right to control and direct the means, details, manner, and method by which the Services will be performed. The Contractor shall perform the Services, and the Organization is not required to hire, supervise, or pay any assistants to help the Contractor perform those Services. 3. REPORTING. The Contractor shall report to the Organization's Executive Director, Evan Marks or such other officer or employee as may be designated by the Organization. The Contractor shall provide written summary reports, on demand, to the Organization on progress, and shall be available for live and telephonic meetings with reasonable frequency. In addition, upon request, the Contractor will report on all actualized expenses incurred by the Contractor related to the Services, which shall create adjustments in subsequent fees paid by the Organization. 4. INSURANCE. Throughout the term of this Agreement, Contractor at Contractor's sole cost and expense, shall maintain in full force and effect the following insurance against liabilities arising out of Contractor's activities on the Property: a) Comprehensive General Liability coverage in an amount not less than one million dollars ($1,000,000), per occurrence combined single limit coverage, and two million dollars ($2,000,000) aggregate; b) Worker's Compensation in an amount not less than one million ($1,000,000) per accident and to include a Waiver of Subrogation; c) Automobile Insurance covering all owned, non-owned and hired vehicles with a limit of one million dollars ($1,000,000) each accident for bodily injury and property damage; and, d) The insurance coverage required herein shall be primary insurance as respects the Organization, its officials, employees, and volunteers. Any insurance or self-insurance maintained by the Organization, its officials, employees, or volunteers shall be in excess of the insurance required herein and shall not contribute with it; and e) The Organization, its officials, employees, and volunteers are to be covered, as additionally insured, and the coverage shall contain no special limitations on the scope of the protection afforded to the Organization, its officials, employees, or volunteers. Services Agreement 4 f) Proof of Insurance Requirements/Endorsement: Licensee shall submit the insurance certificates, including the deductible or self-retention amount, and an additional insured endorsement naming Organization, its officers, employees, agents, and volunteers as additional insured as respects each of the following: liability arising out of activities performed by or on behalf of Licensee, including the insured's general supervision of Licensee; products and completed operations of Licensee; or premises owned, occupied or used by Licensee. The coverage shall contain no special limitations on the scope of protection afforded Organization, its officers, employees, agents, or volunteers. g) Notice of Cancellation/Termination of Insurance: The above policy/policies shall not terminate, nor shall they be canceled, nor the coverages reduced, until after thirty (30) days' written notice is given to Organization, except that ten (10) days' notice shall be given if there is a cancellation due to failure to pay a premium. 5. OTHER ACTIVITIES. • During the Term,the Contractor may fulfill other professional obligations approved by the Organization, and this approval shall not to be unreasonably withheld. 6. RETURN OF PROPERTY. Within ten (10) days of the expiration or earlier termination of this Agreement, the Contractor shall return to the Organization any assets or other properties of the Organization. 7. REPRESENTATIONS AND WARRANTIES. (a) From Contractor.The Contractor represents and warrants to the Organization that: i. It shall perform its obligations using personnel of required skill, experience, and qualifications; and in a professional manner in accordance with best industry standards and shall devote adequate resources to meet its obligations under this Agreement. ii. It is currently a business in good standing and in compliance with, and shall perform its obligations in compliance with, all applicable Laws. iii. The Organization will receive the work product from resulting from this Agreement free and clear of all encumbrances and liens of any kind. iv. Its activities related to fulfilling the obligations of this Agreement will be in conformity in all respects with all requirements or specifications stated in this Agreement and any other specifications and reasonable requirements provided by the Organization to the Contractor. (b) From Organization.The Organization represents and warrants to the Contractor that: i. It is currently a business in good standing and in compliance with, and shall perform its obligations in compliance with, all applicable Laws. ii. It has the authority to enter and fulfill this Agreement and additional agreements that comprise the Documentation. Services Agreement 5 8. INDEMNIFICATION. (a) Of Organization by Contractor. At all times after the Effective Date of this Agreement, the Contractor shall indemnify the Organization and its principals, directors and employees (collectively, the "Organization Indemnitees") from all damages, liabilities, expenses, claims, or judgments (including interest, penalties, reasonable attorneys' fees, accounting fees, and expert witness fees) (collectively, the "Claims") that any Organization Indemnitee may incur and that arise from: (i) the Contractor's gross negligence or willful misconduct arising from the Contractor's carrying out of his obligations under this Agreement; or (ii) the Contractor's material breach of any of its obligations or representations under this Agreement; or (iii) the Contractor's breach of compliance with all applicable laws related to work as a contractor. If a regulatory body or court of competent jurisdiction finds that the Contractor is not in compliance with applicable laws related to work as an contractor, based on the Contractor's own actions, the Contractor will assume full responsibility and liability for all taxes, assessments, and penalties imposed against the Contractor or the Organization resulting from that contrary interpretation, including taxes, assessments, and penalties. (d) Of Contractor by Organization. At all times after the Effective Date of this Agreement, the Organization shall indemnify the Contractor (the "Contractor Indemnitee") from all Claims that the Contractor Indemnitee may incur arising from: (i) the Organization's operation of its business; or (ii) the Organization's breach or alleged breach of, or its failure or alleged failure to perform under, any agreement to which it is a party; or 9. FORCE MAJEURE. A Party will be not be considered in breach or in default because of, and will not be liable to the other Party for, any delay or failure to perform its obligations under this Agreement by reason of fire,earthquake,flood,explosion, strike, riot,war,terrorism, or similar event beyond that party's reasonable control (each a "Force Majeure Event"). However, if a Force Majeure Event occurs, the affected Party shall,as soon as practicable: (a) notify the other Party of the Force Majeure Event and its impact on performance under this Agreement; and (b) use reasonable efforts to resolve any issues resulting from the Force Majeure Event and perform its obligations under this Agreement. 10. GOVERNING LAW. (a) Choice of Law. The laws of the state of California govern this Agreement (without giving effect to its conflicts of law principles). (b) Choice of Forum. Both Parties consent to the personal jurisdiction of the state and federal courts in Orange County,California. 11. AMENDMENTS. Services Agreement 6 No amendment to this Agreement will be effective unless it is in writing and fully executed by the Parties or authorized representatives. 12. ASSIGNMENT AND DELEGATION. (a) No Assignment. Neither Party may assign any of its rights under this Agreement, except with the prior written consent of the other Party, which consent shall not be unreasonably withheld. (b) No Delegation. Neither Party may delegate any performance under this Agreement, except with the prior written consent of the other Party, which consent shall not be unreasonably withheld. (c) Enforceability of an Assignment or Delegation. If a purported assignment or purported delegation is made in violation of this section 12 it is void. 13. COUNTERPARTS;ELECTRONIC SIGNATURES. a. Counterparts. The Parties may execute this Agreement in any number of counterparts, each of which is an original but all of which constitute one and the same instrument. b. Electronic Signatures. This Agreement and any other agreements included in the Documentation are signed when a Party's signature is delivered by facsimile, email, or other electronic medium. These signatures must be treated in all respects as having the same force and effect as original signatures. 14. SEVERABILITY. If any one or more of the provisions contained in this Agreement is, for any reason, held to be invalid, illegal, or unenforceable in any respect, that invalidity, illegality, or unenforceability will not affect any other provisions of this Agreement, but this Agreement will be construed as if those invalid, illegal, or unenforceable provisions had never been contained in it, unless the deletion of those provisions would result in such a material change so as to cause completion of the transactions contemplated by this agreement to be unreasonable. 15. NOTICES. (a) Writing; Permitted Delivery Methods. Each Party giving or making any notice, request, demand, or other communication required or permitted by this agreement shall give that notice in writing and use one of the following types of delivery,each of which is a writing for purposes of this agreement: personal delivery, mail (registered or certified mail, postage prepaid, return-receipt requested), nationally recognized overnight courier (fees prepaid), facsimile,or email. (b) Addresses. A party shall address notices under this Section 15 to a Party at the following addresses: Services Agreement 7 If to the Organization: Evan Marks EcoCenter, Inc. 32701 Alipaz St. San Juan Capistrano,CA 92675 evan@theecologycenter.org If to the Contractor: George Kibby 32701 Alipaz St. San Juan Capistrano,CA 92675 organ icgrowerma n@sbcglobal.net (c) Effectiveness. A notice is effective only if the Party giving notice complies with subsections (a) and (b) and if the recipient receives the notice. 16. WAIVER. No waiver of a breach, failure of any condition, or any right or remedy contained in or granted by the provisions of this Agreement will be effective unless it is in writing and signed by the Party waiving the breach, failure, right, or remedy. No waiver of any breach, failure, right, or remedy will be deemed a waiver of any other breach, failure, right, or remedy, whether or not similar, and no waiver will constitute a continuing waiver, unless the writing so specifies. 17. ENTIRE AGREEMENT. This Agreement constitutes the final agreement of the Parties. It is the complete and exclusive expression of the Parties' agreement about the subject matter of this Agreement. All prior and contemporaneous communications, negotiations, and agreements between the Parties relating to the subject matter of this Agreement are expressly merged into and superseded by this Agreement. The provisions of this Agreement may not be explained, supplemented, or qualified by evidence of trade usage or a prior course of dealings. Neither party was induced to enter this Agreement by, and neither Party is relying on, any statement, representation, warranty, or agreement of the other Party except those set forth expressly in this Agreement. Except as set forth expressly in this Agreement, there are no conditions precedent to this Agreement's effectiveness. 17. HEADINGS. The descriptive headings of the sections and subsections of this Agreement are for convenience only,and do not affect this Agreement's construction or interpretation. Services Agreement 8 18. EFFECTIVENESS. This Agreement will become effective when all Parties have signed it, notwithstanding the Commencement Date. The date this Agreement is signed by the last Party to sign it (as indicated by the date associated with that Party's signature) will be deemed the "Effective Date"of this Agreement. 19. NECESSARY ACTS; FURTHER ASSURANCES. Each Party shall use all reasonable efforts to take, or cause to be taken, all actions necessary or desirable to consummate and make effective the transactions this agreement contemplates or to evidence or carry out the intent and purposes of this Agreement. [SIGNATURE PAGE FOLLOWS] Services Agreement 9 Each Party is signing this Agreement on the date stated opposite that Party's signature. EcoCenter Inc. dba The Ecology Center (�1 Date: 72 I By: Name: Evan Marks Title: Executive Director South Coast Farms, Inc. Date: 61/4 it By: Arr. Name: GearibbX'-� Title: Picc//C11� Services Agreement 10 EXHIBIT A SERVICES Within the purview of farm management and advisory services (together, the "Services"), the Contractor shall perform and provide the following. The nature of the engagement governed by this Agreement is work-for-hire and contemplates that, each sixty (60) days (each, a "Period"), the direction and budgets shall be provided by the Organization to the Contractor, in the form of a master "Development Plan", from which the Contractor shall create detailed operational plans including, but not limited to,resourcing, budgets, procurement,etc. DUTIES. 1. Crop Management a. Planning, budgeting and managing the preparation, planting care of, and harvesting of crops at the Properties; b. Identifying, securing and managing the appropriate labor,equipment and material necessary to achieve the Development Plan; c. Day-to-day onsite management of all resources,include Contractor resources as well as those the Organization may provide,from time to time,in conjunction with the Development Plan; d. The crops under management are to be delivered washed and boxed and placed into storage, on site, as specified by the Organization; e. Reporting and reconciliation of actualized,activities,spending and other resourcing used, on a monthly basis and compared to the Development Plan for variances. 2. Farm Plan Advisory: George Kibby shall provide additional advisory services to assist the Organization's staff in their long-term design and planning of the Properties. This will include: a. Implementation and propagation of fruit forests; b. Procurement of trees,seeds; c. Soil fertility towards long-term visionary needs; d. Irrigation planning,implementation; e. Consultation,implementation of pathways for public and access roads; f. General consultation and reorientation of farming operations / facility towards longer term master plan; g. Consultation and implementation of long term planting plan. COMPENSATION. The Organization shall pay the Contractor the following in monthly installments: a) $102,000 total, annualized,for the personal services of the Contractor's principal,George Kibby; Consulting Services Agreement Al EXHIBIT A b) For each Period, the amount reviewed by the Parties and approved by the Organization sufficient to cover all forecast net labor costs plus a ten (10) percent markup on these labor expenses; c) Projected incidentals*related to the Services,for the upcoming Period; *These expenses will be actualized for each Period and adjustments (credit or additional charges) will be reconciled in subsequent Periods. • [SIGNATURE PAGE FOLLOWS] Consulting Services Agreement A2 EXHIBIT A Each Party is signing this Exhibit A on the date stated opposite that Party's signature. EcoCenter inc. dba The Ecology Center Date: 6�p7118 By: Name: Evan Marks Title: Executive Director South Coast Farms,Inc. Date: 61/1e//52 By: ;.kove 4/ Nam • e r Name: Geoe IC1bb� Title: P Sipe! 7 Consulting Services Agreement A3 EXHIBIT A A4 Consulting Services Agreement EQUIPMENT PURCHASE AGREEMENT ( Exhibit B ) This Agreement is entered into by and between South Coast Farms, Inc, hereinafter"Seller" and EcoCenter Inc, hereinafter "Buyer"for the purposes herein stated. For Fifty Six Thousand Eight Hundred and Fifty Dollars ($56,850) and other valuable considerations, the receipt and sufficiency of which is hereby acknowledged, the undersigned do hereby covenant, contract and agree as follows: 1. AGREEMENT: Seller hereby sells, conveys and transfers to Buyer all rights, title and interest in and unto the machinery, equipment and other persona) property, hereinafter referred to collectively as equipment, described in the attached as Schedule A. 2. PURCHASE PAYMENTS: Buyer agrees to pay unto Seller the sum of $56,850 $25,000 as an initial installment payment under this agreement and thereafter; $25,000 per month beginning November 15th, 2018 and continuing with a like payment due on the 15th day of each and every month thereafter until the 31st day of December, 2018, when the last payment under this agreement shall become due and payable. Payments shall be payable to Seller at his offices or at any other place Seller may direct. Payments shall not be considered paid until received by Seller. 3. TITLE TO EQUIPMENT: Seller represents that he owns the equipment, furniture, fixtures, improvements, and personal property set forth on Schedule A. The Seller has good title to all of such assets and none of the assets of the Seller are subject to any mortgage, pledge, lien, conditional sales agreement, security interest, encumbrance, or other charge except as specifically reflected in the Schedule A. 4. MAINTENANCE AND REPAIR: All maintenance and repair costs to the equipment shall be paid by Buyer and Seller is hereby relieved from any responsibility to maintain or repair said equipment. 5. INSURANCE AND RISK OF LOSS: Buyer shall acquire and maintain insurance on the equipment described herein in the amount of at least $56,850 dollars with Seller as Loss Payee until the final payment under this agreement is made by Buyer and received by Seller. 6. DAMAGE TO EQUIPMENT; DESTROYED OR STOLEN EQUIPMENT: Notwithstanding any loss, theft, destruction or damage of any item of agreement equipment or property, the payments as contained herein shall continue to be paid by Buyer. 7. TAXES AND LICENSES: All taxes, license fees and other expenses associated with the agreement equipment shall be paid by Buyer. 8. INDEMNIFICATION OF SELLER: Buyer shall indemnify, protect and hold harmless the Seller, its agents, servants, successors and assigns from and against all losses, damages, injuries, claims, demands and expenses, including legal expenses, of whatever nature, arising out of the use, condition or operation of any item of the equipment, regardless of where, how and by whom operated. Buyer shall assume the settling of, and the defense of any suits or other legal proceedings brought to enforce all such losses, damages, injuries, claims, demands and expenses and shall pay all judgments entered in the suit for other legal proceedings. The indemnification and assumptions of liability and obligation herein provided shall continue in full force and effect notwithstanding the termination of this agreement, whether by expiration of time, by operation of law or otherwise. 9. ASSIGNMENT BY SELLER TO BANK: Seller shall be entitled to assign the payments due under this agreement, or any portion thereof, to any bank or other financial institution as security. In that event, Seller shall provide Buyer with appropriate re-agreements and other assurances as may be required under Article 12 herein. 10. CONDITION OF EQUIPMENT: Seller represents that all equipment is in good repair and in working order, except for ordinary wear and tear, free from defect, and in a condition for continued use. 11. DEFAULT BY BUYER: Time is of the essence under this agreement and any of the following events shall constitute defaults on the part of Buyer hereunder: (a) failure of Buyer to pay any payment within fifteen (15) days in which same becomes due; (b) any breach or failure of Buyer to perform any of its obligations under this agreement; • (c) insolvency of bankruptcy of Buyer or assignment for the benefit of creditors; (d) any other act of Buyer which will causes Seller to deem itself insecure. Upon the occurrence of any default Seller may exercise this option without notice to or demand on the Buyer and thereupon all equipment and rights of Buyer therein shall be surrendered unto Seller; upon default, Seller may take possession of the equipment where found with or without process of law in court, may enter upon the agreed premises without liability for suit, action, or other proceedings by Buyer and remove same; hold, sell, agreement or otherwise dispose of the equipment or keeping of any of them as Seller so chooses without effecting the obligation of Buyers as providing by this agreement; collect all unpaid payments due without prejudice to Seller's right to regain possession of the equipment. 12. Upon receiving the final payment from Buyer under this agreement, Seller shall execute such further assurances as may be reasonably required by Buyer to insure that the equipment is free from all liens and encumbrances. 13. GOVERNING LAW: This agreement shall be governed by the laws of the State of California. WITNESS our signatures this the day of _j- 2 , 20 1 $ l SELLER: c�r,- 61/7/ / 6 tl`gm 11 'L i C` ',tle '." cls ✓2c itll�� i BUYER: �� Schedule A Orange Trees, 24 @$100 $2,400 Cooler Big $15,000 Cooler Small $4,000 Walk-in Freezer $5,000 Veggie Fridge, Store Assets $5,000 2 @ 20ft Container $5,000 Irrigation Hose $2,000 Irrigation Gate Valves $500 Irrigation Hydrants $1,200 4" PVC Mainline 1500 ft $6,000 2005 Ford E-250 $2,000 2001 Ford CNG E 350 $4,000 2001 Ford Ranger $2,000 Electric Pallet Jack + Charger $2,500 Manual Pallet Jack $250 Total $56,850 EQUIPMENT LEASE ( Exhibit C ) This Agreement is entered into by and between South Coast Farms, Inc, hereinafter "Lessor" and EcoCenter. Inc hereinafter "Lessee" for the purposes herein stated, on this day .27 it 5 tot et( 201g Lessor desires to lease to Lessee, and Lessee desires to lease from Lessor, certain tangible personal property. NOW, THEREFORE, in consideration of the mutual covenants and promises hereinafter set forth, the parties hereto agree as follows: 1. Lease. Lessor hereby leases to Lessee, and Lessee hereby leases from Lessor, the following described equipment (the "Equipment"): See Schedule A . 2. Term. The term of this Lease shall commence on October 1st 2018 and shall expire 24 months thereafter, and shall remain in force as long as the terms of the Services Agreement between the two parties remains current and in good standing. 3. Shipping. Lessee shall be responsible for shipping the Equipment to Lessee's premises. 4. Rent. A. The monthly rent for the Equipment shall be paid in advance in installments of $2,622 each month, beginning on October 1st 2018 and on the first day of each succeeding month throughout the term hereof, at 32701 Alipaz St. San Juan Capistrano, CA 92675, or at such other place as Lessor may designate from time to time. Any installment payment not made by the fifteenth (15th) day of the month shall be considered overdue and in addition to Lessor's other remedies, Lessor may levy a late payment charge equal to one percent (1%) per month on any overdue amount. Rent for any partial month shall be prorated. B. Both parties recognize that Lessee reserves the right to remove certain significant items from the rent of the Leased Equipment after the first 12 months of the Agreement, if Lessee determines that a certain item is no longer necessary for continuing operations. Lessee must provide 60 days written notice, at which point both parties must agree in writing upon a new total rent amount. 5. Use. A. Lessee shall use the Equipment in a careful and proper manner and shall comply with and conform to all national, state, municipal, police and other laws, ordinances and regulations in any way relating to the possession, use or maintenance of the Equipment. B. All users of the Equipment shall undergo training programs, approved by Lessor, and follow protocols for the maintenance and care of the Equipment. Only those that have successfully completed training programs shall have access to the Equipment. 6. Representations and Warranties. Lessor warrants to the lessee that: • That he owns the equipment, furniture, fixtures, improvements, and personal property set forth on Schedule A. The Lessor has good title to all of such assets and none of the assets of the Lessor are subject to any mortgage, pledge, lien, conditional sales agreement, security interest, encumbrance, or other charge except as specifically reflected in the Schedule A. • All equipment to be leased is in good working condition, free from defect, and in a condition for continued use. 7. Repairs. Lessee, at its own cost and expense, shall keep the Equipment in good repair, condition and working order and shall furnish any and all parts, mechanisms and devices required to keep the Equipment in good mechanical working order. 8. Loss and Damage. A. Lessee hereby assumes and shall bear the entire risk of loss and damage to the Equipment from any and every cause whatsoever. No loss or damage to the Equipment or any part thereof shall impair any obligation of Lessee under this Lease which shall continue in full force and effect through the term of the Lease. B. In the event of loss or damage of any kind whatever to the Equipment, Lessee shall, at Lessor's option: (i) Place the same in good repair, condition and working order; or (ii) Replace the same with like equipment in good repair, condition and working order; or (iii) Pay to Lessor the replacement cost of the Equipment. 9. Surrender. Upon the expiration or earlier termination of this Lease, Lessee shall return the Equipment to Lessor in good repair, condition and working order, ordinary wear and tear resulting from proper use thereof alone excepted, by delivering the Equipment at Lessee's cost and expense to such place as Lessor shall specify within the city or county in which the same was delivered to Lessee. 10. Insurance. Lessee shall procure and continuously maintain and pay for: A. All risk insurance against loss of and damage to the Equipment for not less than the full replacement value of the Equipment, naming Lessor as loss payee, and; B. Combined public liability and property damage insurance with limits as approved by Lessor, naming Lessor as additionally named insured and a loss payee. The insurance shall be in such form and with such company or companies as shall be reasonably acceptable to Lessor, shall provide at least thirty (30) days advance written notice to Lessor of any cancellation, change or modification, and shall provide primary coverage for the protection of Lessee and Lessor without regard to any other coverage carried by Lessee or Lessor protecting against similar risks. Lessee shall provide Lessor with an original policy or certificate evidencing such insurance. Lessee hereby appoints Lessor as Lessee's attorney in fact with power and authority to do all things, including, but not limited to, making claims, receiving payments and endorsing documents, checks or drafts necessary or advisable to secure payments due under any policy of insurance required under this Agreement. 11. Taxes. Lessee shall keep the Equipment free and clear of all levies, liens and encumbrances. Lessee, or Lessor at Lessee's expense, shall report, pay and discharge when due all license and registration fees, assessments, sales, use and property taxes, gross receipts, taxes arising out of receipts from use or operation of the Equipment, and other taxes, fees and governmental charges similar or dissimilar to the foregoing, together with any penalties or interest thereon, imposed by any state, federal or local government or any agency, or department thereof, upon the Equipment or the purchase, use, operation or leasing of the Equipment or otherwise in any manner with respect thereto and whether or not the same shall be assessed against or in the name of Lessor or Lessee. However, Lessee shall not be required to pay or discharge any such tax or assessment so long as it shall, in good faith and by appropriate legal proceedings, contest the validity thereof in any reasonable manner which will not affect or endanger the title and interest of Lessor to the Equipment; provided, Lessee shall reimburse Lessor for any damages or expenses resulting from such failure to pay or discharge. 12. Lessor's Payment. In case of failure of Lessee to procure or maintain said insurance or to pay fees, assessments, charges and taxes, all as specified in this Lease, Lessor shall have the right, but shall not be obligated, to effect such insurance, or pay said fees, assignments, charges and taxes, as the case may be. In that event, the cost thereof shall be repayable to Lessor with the next installment of rent, and failure to repay the same shall carry with it the same consequences, including interest at ten percent (10%) per annum, as failure to pay any installment of rent. 13. Indemnity. Lessee shall indemnify Lessor against, and hold Lessor harmless from, any and all claims, actions, suits, proceedings, costs, expenses, damages and liabilities, including reasonable attorney's fees and costs, arising out of, connected with, or resulting from Lessee's use of the Equipment, including without limitation the manufacture, selection, delivery, possession, use, operation, or return of the Equipment. 14. Default. If Lessee fails to pay any rent or other amount herein provided within ten (10) days after the same is due and payable, or if Lessee fails to observe, keep or perform any other provision of this Lease required to be observed, kept or performed by Lessee, Lessor shall have the right to exercise any one or more of the following remedies: A. To declare the entire amount of rent hereunder immediately due and payable without notice or demand to Lessee. B. To sue for and recover all rents, and other payments, then accrued or thereafter accruing. C. To take possession of the Equipment, without demand or notice, wherever same may be located, without any court order or other process of law. Lessee hereby waives any and all damages occasioned by such taking of possession. D. To terminate this Lease. E. To pursue any other remedy at law or in equity. Notwithstanding any repossession or any other action which Lessor may take, Lessee shall be and remain liable for the full performance of all obligations on the part of the Lessee to be performed under this Lease. All of Lessor's remedies are cumulative, and may be exercised concurrently or separately. 15. Bankruptcy. Neither this Lease nor any interest therein is assignable or transferable by operation of law. If any proceeding under the Bankruptcy Act, as amended, is commenced by or against the Lessee, or if the Lessee is adjudged insolvent, or if Lessee makes any assignment for the benefit of his creditors, or if a writ of attachment or execution is levied on the Equipment and is not released or satisfied within ten (10) days thereafter, or if a receiver is appointed in any proceeding or action to which the Lessee is a party with authority to take possession or control of the Equipment, Lessor shall have and may exercise any one or more of the remedies set forth in Section 14 hereof; and this Lease shall, at the option of the Lessor, without notice, immediately terminate and shall not be treated as an asset of Lessee after the exercise of said option. 16. Ownership. The Equipment is, and shall at all times be and remain, the sole and exclusive property of Lessor; and the Lessee shall have no right, title or interest therein or thereto except as expressly set forth in this Lease. 17. Additional Documents. If Lessor shall so request, Lessee shall execute and deliver to Lessor such documents as Lessor shall deem necessary or desirable for purposes of recording or filing to protect the interest of Lessor in the Equipment including, but not limited to a UCC financing statement. 18. Entire Agreement. This instrument constitutes the entire agreement between the parties on the subject matter hereof and it shall not be amended, altered or changed except by a further writing signed by the parties hereto. 19. Notices. Service of all notices under this Agreement shall be sufficient if given personally or mailed certified, return receipt requested, postage prepaid, at the address hereinafter set forth, or to such address as such party may provide in writing from time to time. If to Lessor: SOUTH COAST FARMS. INC. George Kibby 32701 Alipaz St. San Juan Capistrano, California 92675 organicgrowcrman(aisbcglobal.net If to Lessee: ECOCEN I'ER, INC. Evan Marks 32701 Alipaz St. San Juan Capistrano, ,California 92675 Evan@theecologvicente r.o rg 20. Assignment. Lessee shall not assign this Lease or its interest in the Equipment without the prior written consent of Lessor. 21. Governing Law. This Lease shall be construed and enforced according to laws of the State of California. 22. Headings. Headings used in this Lease are provided for convenience only and shall not be used to construe meaning or intent. IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the day and year first above written. SOUTH COAST FARMS, INC. Date: q/Z E 7/ By: o 1 Co-sr q lac �C LC‘-‘14e.- / ity Name: George Kibby Title:Owner t- ECOCENTER, INC. Date: i�I' g By: Name: Evan Marks Title: Executive Director SCHEDULE A Leased Equipment SCF Proposed Value John Deere-6140D $65,000 John Deer-7405 $30,000 John Deer- 2440 $6,000 John Deer- 5525 $30,000 Gearmore land plane- HC12 $3,000 Gearmore rear blade-GB85H $1,500 Gearmore 4ft roto-E sereies $1,500 Gearmore 6ft roto-HC230 $2,500 Gearmore mower-L-60-HD-YN $1,500 Gearmore Dat Cero- SCU comost spreader $2,500 Rain-flo- 1800 Plastic Cutter $1,500 Rain-flo- 1600 Drip Layer $1,000 Rain-flo- 2550 mulch layer $4,500 Rain-fto- 2600 mulchlayer $5,000 Compost Tea Maker(Tank, Heater,Aerator) $1,000 200 gallon sprayer $6,000 Moldboard plow $1,000 Drip tape layer $1,000 12ft disc $5,000 12ft ring roller $500 Pipes: 288-3 in. $17,280 Pipes: 99-2 in. $4,950 Total $192,230 Yearly total tease ( proposed ) $31,460 Monthly Rent $2,622