Talley’s (“the Lessor”) Standard Terms and Conditions applying to leases of Marine Farm Space

1.1 Subject to Clause 1.2, the Lessor shall permit the Lessee to utilise the Leased Area for marine farming activities (growing of mussels or spat) for the period stated in the Lease Agreement between the Lessor and Lessee, or in the case of any particular Leased Area where the resource consent and or Head Lease giving Talley’s the right to occupy the Leased Area expires without renewal or replacement, for a period expiring on the date of termination of such resource consent or Head Lease.

1.2 The Lessor shall not be under any obligation to permit the utilisation of the Leased Area to the extent that the resource consent for the use of the Leased Area has expired or has become forfeit as a result of any action on behalf of the Lessee, or any Head Lease pursuant to which a part of the Leased Area is occupied expires or is otherwise terminated or for any other reason outside of the control of the Lessor.

1.3 During the term of the Lease and subject to compliance with the same:

a) The Lessee shall be entitled to quiet enjoyment of the Leased Area;

b) The Lessor shall comply with all obligations under the relevant resource consents that the Lessee is not obliged to comply with;

c) The Lessor shall not agree to any changes to applicable resource consent conditions without the agreement of the Lessee, provided however that the Lessor may agree to such changes, if it deems the same necessary despite the Lessee’s opposition, but in such circumstances the Lessee may give written notice terminating the Lease on such changes coming into effect provided that the Lessee gives such notice within 30 days of being notified of the changes agreed to by the Lessor and Clause 7.1 a) shall then apply; and

d) The Lessor shall take reasonable steps to renew or replace any expiring resource consent so as to keep its rights of occupancy and use of the Leased Area for the duration of the Lease (including any right of renewal) provided however that the Lessor’s decision as to whether any required steps are economically feasible and reasonable shall be at its sole discretion.

2.0 Indemnity / Costs

2.1 The Lessee shall comply with all of the terms and conditions of any consent in respect of the Leased Area and shall not do any act or thing that will or may put any applicable resource consent at risk of loss, forfeiture, or suspension and indemnifies the Lessor against any loss (including consequential loss) or forfeiture arising from the activities of the Lessee under this Lease.

2.2 The Lessee further warrants that they will comply with all of the conditions of any consent imposed in respect of the Leased Area by any local or territorial authority that has control over the Leased Area.

2.3 The Lessee shall be liable for sanitation fees, biotoxin fees and any other operational levies or fees or costs howsoever imposed by whosoever for uses reasonably incidental to the use of the Leased Area during the term of this Lease for the purposes of mussel farming or any other approved purpose and shall forthwith (to the extent they would otherwise be payable by the Lessor) pay the same to the Lessor on invoice.

2.4 The Lessee authorises and agrees that the Lessor may deduct any costs payable under this clause or moneys otherwise owing to the Lessor by the Lessee from the proceeds of sale of crop by the Lessee to the Lessor in accordance with the provisions of Clause 5.

2.5 In the event that the lease entered into between the Lessor and Lessee is in replacement or renewal of an existing lease between the same parties in respect of the same Leased Area any costs (as defined in clauses 2.3 and 2.4) payable in by the Lessee pursuant to the previous agreement shall continue to remain payable by the Lessee.

3.0 Lease Payments

3.1 The Lessee shall pay the annual rent (plus GST) for the Leased Area in advance with a first payment on the commencement date and thereafter during the term of the lease at the frequency set out in the Lease Agreement between the Lessor and Lessee.

3.2 The rental rates shall be fixed for the first two years of the lease and thereafter may be reviewed to market rental in accordance with 3.4 to 3.6 hereof.

3.3 Without detracting from either parties’ other rights, any late payment shall incur default interest at a rate of 14% per annum until payment in full.

3.4 The market value of the Leased Area shall be reviewed by the Lessor as follows:

a) The Lessor shall commence the review not earlier than one month prior to the review date or at any time up to the next following review date by giving written notice to the Lessee specifying the market value of the Leased Area considered by the Lessor to be the current market value as at that review date;

b) If, by written notice to the Lessor within 28 days after receipt of the Lessor’s notice, the Lessee disputes that the proposed new market value for the Leased Area is the current market value for the Leased Area then the new market value shall be determined in accordance with Clause 3.5 hereof but the new market value of the Leased Area shall not be less than the lease rental payable for the previous period;

c) If the Lessee fails to give such notice (time being of the essence) the Lessee shall be deemed to have accepted the new market value specified in the Lessor’s notice;

d) The new market value of the Leased Area so determined or accepted shall be the market value from the review date provided however that the new rental shall only apply for the period commencing from the date the Lessor gives notice under clause 3.4 a);

e) Pending the determination of the new market value of the Leased Area, the Lessee shall pay the amount calculated in accordance with Clause 3.1 or as specified in the Lessor’s notice, whichever is greater. Upon determination of the new market value of the Leased Area an appropriate adjustment shall be made;

f) The new market value may at the option of either party be recorded in a Deed prepared by the Lessor or the Lessor’s solicitor the cost of which shall be payable by the Lessee;

3.5 Immediately following receipt by the Lessor of the Lessee’s notice, the parties shall endeavour to agree on the current market value of the Leased Area, but if agreement is not reached within 14 days then the new market value of the Leased Area shall be determined by valuers appointed by the parties acting as experts and not as arbitrators as follows:

a) Each party shall appoint their own valuer and given written notice of the appointment to the other party within 14 days of the party agreeing to determine the new market value of the Leased Area;

b) If the party receiving a notice fails to appoint a valuer within the 14 day period then the valuer appointed by the other party shall determine the new market value of the Leased Area and such determination shall be binding on both parties;

c) The valuers appointed before commencing their determination of a market value for the Leased Area shall appoint an umpire who need not be a valuer;

d) The valuers shall determine the current market value of the Leased Area and if they fail to agree then the market value shall be determined by the umpire;

e) Each party shall be given the opportunity to make written or verbal representations to the valuers or the umpire subject to such reasonable time and other limits as the valuer or the umpire may prescribe and they shall have regard to any such representation but not be bound thereby;

f) When the new market value of the Leased has been determined the valuers or the umpire shall given written notice thereof to the parties. That notice shall provide as to how the costs of the determination shall be borne and such provision shall be binding on the parties.

3.6 Nothing contained in Clauses 3.4 to 3.5 shall require the Lessor to accept a market value that sets a rental figure at less than that payable for the period immediately preceding the relevant review date.

4.0 Development of Farm

4.1 The Lessee shall work and develop the Leased Area at their own cost according to the best and approved methods of mussel farming but at all times will develop the farm in consultation with the Lessor and will in any event farm, manage and cultivate the Leased Area in good, thorough and marine farm-like manner including developing the marine farm in accordance with the provisions of any consent granted by any territorial authority or any applicable lease to the end intent that the consent and or lease to occupy and operate the Leased Area shall not lapse.

4.2 Other than to the extent required as a condition imposed by any government or territorial authority relating to the use and occupation of any part of the Leased Area or any lease of a Leased Area, nothing in Clause 4.1 shall require the Lessee to develop and bring into production any currently undeveloped area within the Leased Area faster than the Lessee deems appropriate having regard to its own operations and operating and financial capacity.

4.3 Where the Lessee has elected, pursuant to clause 4.2, not to develop or to delay development of an undeveloped part of the Leased Area, and the Lessor considers that that area should be developed or developed earlier, the Lessor may give written notice to the Lessee requiring the Lessee to develop and bring the area into production within a specified timeframe (which timeframe must be reasonable having regard to construction and seeding timeframes). Upon receipt of such a notice the Lessee shall within twenty-eight days by written notice to the Lessor elect either to develop and bring the area into production as required by the notice or elect to have the area removed from the Leased Area. Where the Lessee elects to have the Area removed from the License Area, this Lease shall no longer apply in respect of such area from the date of such election (other than to the extent of any right, liability or obligation arising or accruing prior to that date) and the Lessor shall be free to take over occupation and use of that area or to lease or license the area to another person or entity or otherwise deal with the area as it sees fit, but if the Lessor does so there shall be a pro-rata reduction in rent having regard to the area removed.

4.4 The Lessor and the Lessor’s employees, contractors and invitees may at all reasonable times enter upon the Leased Area to review the development of the farms and otherwise to ensure compliance with Clause 4.1 hereof. If the Lessor gives the Lessee written notice of any failure on the part of the Lessee to comply with any of the requirements of Clause 4 hereof, the Lessee shall comply with all of those requirements with all reasonable speed.

4.5 At the expiration of this Lease or any earlier termination, whether of this Lease as a whole or in respect of any particular area falling within the Leased Area that is subsequently removed through loss of the Lessor’s right to occupy and utilise the same, and subject to clause 7.1, the Lessee shall remove all structures (except screw anchors, warps, backbones, 3 floats at each end of each backbone and one float in the centre of each backbone and the 4 navigational buoys) if owned by the Lessee.

4.6 Any screw anchors, warps, backbones, 3 floats at each end of each backbone and one float in the centre of each backbone and the 4 navigational buoys, if owned by the Lessee, shall at the expiry of the lease be left on the Leased Area and the Lessor shall pay for the same at their then “current” market value. If the parties cannot agree upon a valuation then the current market value shall be determined by a single valuer agreed to by the parties, or in default of agreement appointed for that purpose, at the request of either party, by the President for the time being of the Marine Farming Association Incorporated or by the President’s nominee. The cost of the valuation shall be borne by the parties equally unless otherwise determined by the valuer.

5.0 Supply Agreement

5.1 In further consideration of the Lessor entering into the Lease, and subject to clause 5.2 below, the Lessee agrees to sell to the Lessor and the Lessor agrees to purchase from the Lessee all mussels grown on the Leased Area, and any other marine farms farmed by the Lessee and specified in the Lease agreement, and for that purpose the parties agree that Talley’s Standard Terms and Conditions of Mussel Purchases from Growers apply as attached/as displayed on Talley’s website at https://www.talleys.co.nz/term...

5.2 In the event of the Lessor being unable to take all mussels available from the Lessee at any given time, the Lessee shall be at liberty to sell such excess mussels elsewhere provided that prior to any sale to a third party the Lessee shall first have given 14 days written notice to the Lessor of the Lessee’s intention following the Lessor having refused to purchase and provided further that the Lessee notifies the Lessor of such sales as soon as practical, on each occasion such a sale has occurred, including provision of such documents or information as are reasonably necessary to allow the Lessor to determine that only mussels that the Lessor was unwilling or unable to acquire were sold.

5.3 The failure to supply mussels shall be deemed to be a breach of the provisions of the Lease entitling the Lessor to exercise its rights under Clause 6 hereof.

6.0 Default

6.1 If the Lessor or Lessee is in default under this Lease and fails upon 21 days’ notice in writing to remedy any such default or goes into receivership or liquidation or commits an act of bankruptcy, then the party not in default may, without prejudice to their other rights and remedies, be entitled at their option to forthwith terminate this Lease.

7.0 Termination

7.1 Notwithstanding termination or expiry of the Lease or any renewal, if upon such expiry or termination:

a) the termination arises from the default of the Lessee and there is any of the Lessee’s crop on any drop lines within the Leased Area which the Lessee is unable to move to another site, the Lessor shall purchase such crop and applicable drop lines and buoys at the crops then “current” market value. If the parties cannot agree upon a valuation then the current market value shall be determined by a single valuer agreed to by the parties, or in default of agreement appointed for that purpose, at the request of either party, by the President for the time being Marine Farming Association Incorporated or by the President’s nominee. The cost of the valuation shall be borne by the parties equally unless otherwise determined by the valuer;

(b) Termination of the Lease shall be without prejudice to any of the parties’ rights and liabilities arising prior to termination.

(i) The Lessee shall have the right to continue to occupy and farm drop lines still containing crop until such crop is harvested in the usual way in accordance with good industry practice;

(ii) As drop lines are harvested, they shall be released to the Lessor;

(iii) The Lessee shall pay the rental and other costs and charges payable under the Lease on a pro-rata basis based on lines still being farmed.

8.0 Notice

8.1 Each notice or other communication under the Lease is to be in writing, is to be made by e-mail, personal delivery or by tracked courier-post to the addressee at their last known email address or address and is to be marked for the attention of the person or office holder (if any), from time to time designated for the purpose by the addressee to the other parties.

8.2 No communication is to be effective until received. A communication will, however, be deemed to be received by the addressee:

a) in the case of e-mail, when a valid delivery notice is received or the email is otherwise acknowledged by the party or by the party’s solicitor orally or by return e-mail or in writing;

b) in the case of personal delivery, when delivered; and

c) in the case of a letter, on the day that tracking shows that it was delivered.

9.0 Arbitration

9.1 If any dispute or difference shall arise between any of the parties hereto in any way arising out of or in connection with the Lease, but excluding a dispute for which resolution is provided under clauses 3.5, 4.6 or 7.1, such dispute or difference shall be referred to the arbitration of a single arbitrator, if the parties can agree upon one or otherwise of two arbitrators, one to be appointed by each party to the dispute, or an umpire to be appointed by the arbitrators prior to entering into consideration of the matter, and any such reference shall be a submission to arbitration within the meaning of the Arbitration Act 1996.

10.0 Force Majeure

10.1 A failure by either party to perform any of its obligations under the Lease shall not be a non-performance of the Lease and bring about liability on the part of either party, if that failure arises from a cause or causes beyond the control of the parties including, but no limited to, act of God, Government actions or directions, war, strikes or industrial disputes of any kind whatsoever, storms, sabotage, explosions or other contingencies. If such an event occurs the parties may consult with each other and by mutual agreement decide whether to maintain the Lease in full force and/or to vary or terminate the Lease.

10.2 Where a storm event damages or destroys the Lessee’s structures on the Leased Area, despite reasonable efforts by the Lessee, the Lessor shall grant the Lessee a rent abatement relative to the productive area lost for the period it considers as providing reasonable time to repair the damage and re-grow lost crop.

11.0 Essentiality of Payments

11.1 Failure to pay any Lease fee or other moneys payable hereunder on the due date shall be a breach going to essence of the Lessee’s obligations under this Lease. The Lessee shall compensate the Lessor and the Lessor shall be entitled to recover damages from the lessee for such breach. Such entitlement shall subsist notwithstanding any termination of the Lease and shall be in addition to any other right or remedy which the Lessor may have.

11.2 The acceptance by the Lessor of any arrears payments of any moneys shall not constitute a waiver of the essentiality of the Lessees continuing obligation to pay any sum of money due under this Lease.

12.0 Assignment

12.1 No party may assign or transfer all or any part of its rights or obligations under this Lease without the prior written consent of the other party, but such consent shall not be unreasonably withheld.

2024