BREEDING AND BOARDING CONTRACT This contract is for services to be provided by, Derwydd Alpacas, operated by Jan & Dale Davis, (the “Ranch”) 24485 Derwydd Way, Esparto CA 95627. To _____________________, _____________________ Ranch, (the "Owner"). The Ranch either owns or manages several alpaca herdsires including Never Summer American Iron, ARI 31890007 (the “Male”). The Owner is the owner of the following female alpaca, which the Owner wishes to be bred to the Male: 1______________________ ARI#________ Anticipated Service Date___________ Breeding Fees: Subject to the terms of this contract, the Ranch has agreed to breed the Male to said female for a fee donated to AOA (the “Breeding Fee”). The breeding must take place within 18 months of the payment of the fee donated to the AOA and must take place at Derwydd within the months of November 1st thru the end of May 31 while Iron is resident at Derwydd. In addition: ___ No crias at side under 2 months of age will be accepted at the ranch. ___ 90 days post confirmed pregnancy, female and any cria at side is required to be removed from the ranch. ___ Owner will be responsible for reimbursing the Ranch for all veterinary expenses – the ultrasound test to confirm pregnancy is free. Owner’s Representations: The Owner represents that, to the best of his/her knowledge, each female alpaca is healthy and free of all disease, capable of reproduction, and is covered by full-mortality insurance. The Owner further represents that, except as disclosed in writing to the Ranch, each female alpaca has never had a problem with obtaining or maintaining a pregnancy, has never had a problem birthing, has never given birth to a stillborn cria or a cria with a congenital defect, and has no family history of congenital defects. At the time of the Owner's delivery of the females to the Ranch, the Owner shall provide each of the items marked below: Proof of current full mortality insurance for each female alpaca. Any material information in the Owner's possession concerning any prior health problems, as well as the female’s any breeding attempts or exposure of her to males up to 30 days before the scheduled breeding date. Weight of Dam and any cria at side. Owner shall provide the Ranch with a copy of ARI Certificate of said female. Owner shall give Ranch a copy of the Certificate of Veterinary Inspection, which will have been completed within 30 days prior to arriving at the Ranch. Owner shall provide a written verification from their veterinarian that the alpacas arriving at the Farm have passed requirements herein stated in a-h. a. Dam has no venereal disease. b. Dam is free of any vaginal discharge. c. Dam has not been exposed to any stud for at least 30 days before her arrival at the Ranch. d. Dam is not pregnant. e. Dam does not have an intact hymen. f. Dam is free of all infectious and communicable diseases. g. Dam and any cria at side is worm free shown by recent (within 20 days) fecal test. Fecal test to include a minimum 45 minute float test for Coccidia: "Eimeria macusaniensis” and test results listed on the Certificate of Veterinary Inspection or copy of lab results attached to Certificate of Veterinary Inspection. h. Dam and any cria at side is BVDV PCR negative and test result listed on the Certificate of Veterinary Inspection or copy of lab results attached to Certificate of Veterinary Inspection. Breeding Management: In return for the Breeding Fee, the Ranch will breed the female alpacas to the Ranch’s herdsire in such a manner and for such frequency and times as the Ranch deems sufficient to obtain a confirmed pregnancy. The Ranch reserves the option to terminate this Agreement if any female’s condition or behavior is likely to prevent successful breeding or is likely to cause disease, damage, distress or disruption to other animals. If the Ranch should terminate this Agreement for any reason prior to the completion of the breeding, the Owner will need to negotiate with the AOA for a refund the Breeding Fee in full with no further liability to the Ranch The Ranch will provide each alpaca with the same day-to-day care and routine attention that the Ranch provides to its own animals for so long as that alpaca is at the Ranch. The care provided by the Ranch will be consistent with the level of care provided by like facilities in the industry. If any concern for the health of any alpaca visiting the Ranch should arise, the Ranch will attempt to notify and consult with the Owner about the appropriate steps to be taken. Nonetheless, in case of emergency and/or the Ranch's inability to contact the Owner, the Owner hereby authorizes the Ranch to use its best judgment and agrees to reimburse the Ranch for all documented expenses incurred on the Owner's behalf. In any event, it is expressly agreed that the Ranch is not an insurer of the alpaca’s health and well-being, and will not be responsible for any harm that may befall the alpaca absent gross negligence by the Ranch. The Owner agrees that his or her sole remedy for any death or injury to any alpaca while it is in the care of the Ranch is to seek reimbursement under the terms of his or her insurance policy. The Owner grants the Ranch all necessary agistment and service lien rights in each alpaca to secure the payment of all fees and expenses. -2- Guarantees: The following guarantees are provided to the Owner expressly in place of all other guarantees, oral, express or implied, including the warranties of merchantability and fitness. Except for these guarantees, the Owner assumes all risk inherent in the breeding process. Except as stated, in the event of a breach of one of these guarantees, the Ranch’s obligation under these guarantees is limited to conducting another breeding with the female alpaca at no further expense to the Owner. At any time, before or after this Agreement is executed and performed, the Ranch will, at the Owner’s request, provide all available information about the quality and health of the herdsire’s off-spring. Other than this disclosure and the following “live birth” guarantees, the Ranch accepts no liability for congenital defects or other abnormalities in the herdsire’s offspring. The Ranch guarantees that an ultrasound test will establish that each female alpaca has established a successful pregnancy with the Ranch’s herdsire. If each female alpaca does not remain pregnant after payment of the Breeding Fee, the Ranch will provide a subsequent breeding with the same herdsire at no additional Breeding Fee under the same terms as imposed under this Agreement. If the herdsire’s offspring of any of the females dies at birth or does not survive for one month after birth, the Ranch will provide a subsequent breeding with the same herdsire to the female at no additional Breeding Fee under the same terms as imposed under this Agreement. If any of the females lose the cria or fetus and becomes unable to conceive or dies before or during birth, the Ranch will provide a subsequent breeding with the same herdsire to another of the Owner’s females at no additional Breeding Fee under the same terms as imposed under this Agreement. If re-breeding is required and the same herdsire is incapable of or unavailable for breeding, the Ranch will provide a breeding with another of the Ranch's herdsires of the Owner’s choice at no additional Breeding Fee under the same terms as imposed under this Agreement. Arbitration of Any Disputes: If there is any disagreement over the obligations imposed by this Agreement, it will be resolved by binding arbitration. Should the Alpaca Owners Association establish any dispute resolution process in the future, the parties agree to submit the dispute to AOA for resolution. Otherwise, unless the parties agree to some other procedure, the dispute will be resolved under the guidance of the American Arbitration Association’s commercial arbitration rules in California. A single arbitrator will be chosen from a list of five qualified individuals proposed by the AAA. For two rounds, the party initiating arbitration will strike one of the five proposed arbitrators and then the responding party will then strike one proposed arbitrator from -3- the list, until there is only one arbitrator left. The arbitrator will not have the authority to grant an award of attorneys’ fees or punitive damages. This agreement represents the entire agreement between the Ranch and the Owner and supersedes all previous agreements. This agreement will be governed by the laws of the State of California. The Ranch: _____________________________ Date: ___________________ Owner: ___________________________________ Date: ___________________ -4-