Resolution No. 97091
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RESOLUTION NO. 9709
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
VERNON APPROVING AND RATIFYING THE EXECUTION OF A
FIRST AND SECOND AMENDMENT TO PURCHASE AND SALE
AGREEMENT AND JOINT ESCROW INSTRUCTIONS BY AND
BETWEEN THE CITY OF VERNON AND RENU RESOURCES, LLC
RELATING TO THE PURCHASE OF LAND IN KERN COUNTY FOR
POTENTIAL DEVELOPMENT OF RENEWABLE RESOURCES
WHEREAS, on August 12, 2008, the City Council of the City of
Vernon adopted Resolution No. 9689 approving a Purchase and Sale
Agreement and Joint Escrow Instructions dated August 13, 2008 (the
"Agreement"), with ReNu Resources, LLC ("ReNu") for the purchase of
property in Kern County in the area known as the Tehachapi Wind
Resource Area (the "Wind Property") for the potential development of
renewable resources; and
WHEREAS, the Agreement also provided for an option to
purchase property in Kern County in Tehachapi (the "Solar Property")
for the potential development of renewable resources; and
WHEREAS, prior to the close of escrow, the City and ReNu
i
desired to amend the Agreement to provide a longer due diligence
period; to increase the acreage designated for the optional Solar
Property to up to 5,000 acres; to provide clarification concerning the
option to purchase the Solar Property; to provide that the City has
elected to proceed with the acquisition; and to provide clarification
of closing condition respecting title language; and
WHEREAS, in order to meet the urgent.need to perform all
actions necessary to close escrow, the Mayor Pro-Tem executed the
First Amendment to Purchase and Sale Agreement and Joint Escrow
Ilnstructions dated August 28, 2008 (the "First Amendment"), and
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the Second Amendment to Purchase and Sale Agreement and Joint Escrow
Instructions dated September 4, 2008 (the "Second Amendment"), subject
Ito ratification by the City; and
WHEREAS, the City desires to approve and ratify the actions
of the Mayor Pro-Tem in executing the First Amendment and the Second
Amendment to complete the purchase of the Wind Property and optional
purchase of the Solar Property under the terms and conditions of the
Agreement.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF VERNON AS FOLLOWS:
SECTION 1: The City Council of the City of Vernon hereby
(finds and determines that the recitals contained hereinabove are true
land correct.
SECTION 2: The City Council of the City of Vernon hereby
approves the First Amendment and ratifies the execution of the First
Amendment dated August 28, 2008 with ReNu, a copy of which is attached
hereto as Exhibit A and incorporated by reference, and the Mayor Pro-
Tem's execution of the Amendment.
SECTION 3: The City Council of the City of Vernon hereby
approves the Second Amendment and ratifies the execution of the Second
Amendment dated September 4, 2008 with ReNu, a copy of which is
attached hereto as Exhibit B and incorporated by reference, and the
Mayor Pro-Tem's execution of the Amendment.
SECTION 4: The City Council of the City of Vernon hereby
authorizes the City Administrator, or his designee, to take any and
all actions deemed necessary and to execute any and all documents as
shall be required pursuant to the terms of said Agreement, as amended
to complete the close of escrow.
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SECTION 5; The City Clerk of the City of Vernon shall
certify to the passage of this resolution, and thereupon and
thereafter the same shall be in full force and effect.
APPROVED AND ADOPTED this 8th day of September, 2008.
Name: Leonis C. Ma burg
Title: Mayor
ATTE T:
JI 4W'*�k� kf..e�
MAN ELA GIRON, 'ty lerk
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STATE OF CALIFORNIA )
) ss
COUNTY OF LOS ANGELES )
I, MANUELA GIRON, City Clerk of the City of Vernon, do hereby
certify that the foregoing Resolution, being Resolution No. 9709, was
duly adopted by the City Council of the City of Vernon at a regular
meeting of the City Council duly held on Monday, September 8, 2008, and
thereafter was duly signed by the Mayor or Mayor Pro-Tem of the City of
Vernon.
(SEAL)
MANUELA RO City Clerk
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EXHIBIT A
FIRST AMENDMENT
TO
PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS
THIS FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT AND
JOINT ESCROW INSTRUCTIONS (this "Amendment") is made as of August 28, 2008 (the
"Effective Date"), by `and between the CITY OF VERNON, a California chartered city
(`Buyer"), and ReNu RESOURCES, LLC, a Delaware limited liability company ("Seller").
RECITALS:
A. Buyer and Seller are parties to that certain Purchase and Sale Agreement and Joint
Escrow Instructions made as of August 13, 2008 (the "Original Purchase Agreement"). All
capitalized terms used herein and not otherwise defined herein have the meanings ascribed to
them in the Original Purchase Agreement. The Original Purchase Agreement, as amended by
this Amendment, is referred to herein as the "Purchase Agreement".
B. Buyer and Seller desire to amend the Original Purchase Agreement as provided
herein.
AGREEMENT:
NOW, THEREFORE, in consideration of the mutual covenants contained in this
Amendment and for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Parties do hereby agree as follows:
1. Amendments to Original Purchase Agreement.
1.1 Amendment to Section 12.1. Section 12.1 of the Original Purchase
Agreement is hereby amended by deleting paragraph (a) therein, titled "Solar Land", in its
entirety and replacing it with the following:
"(a) Solar Land. A fee simple interest in up to 5,000 acres designated
by Buyer (the "Designated Solar Land") from among the parcels located in Kern
County, California described in Exhibit I attached hereto and made a part hereof
(the "Eligible Eastern Solar Land') and the parcels located in Kern County,
California described in Exhibit N attached hereto and made a part hereof (the
"Eligible Western Solar Land" and, together with the Eligible Eastern Solar Land,
the "Eligible Solar Land'), which designation shall be made ;by written notice to
Seller (the "Designation"), provided that (i) in no event shall Seller be obligated
to make any conveyance that would constitute a civil or criminal violation of the
Subdivision Map Act and (ii) any Designation of property within the Eligible
Western Solar Land shall be not less than 640 acres. Seller shall make the
Designation no later than the date that is twenty four (24) months after the
Closing Date, failing which the Option shall lapse. As used herein, "Solar Land"
or "SL" shall mean the Eligible Solar Land prior to the Designation and,
following the Designation, the Designated Solar Land. The Solar Land shall be
LAU 895086.4 paf Amendment to PSA
subject to the Seller Retained Easements. Buyer's specification of the Designated
Solar Land shall reflect prudent industry practices in the selection of sites for
solar projects. Buyer shall select parcels that are useful or valuable for
development of Buyer's intended solar projects and shall not select parcels that
would be valuable primarily for making Seller's remaining attractive solar land
less valuable or developable by Seller. Subject to the foregoing, Seller
acknowledges that in specifying the Designated Solar Land Buyer intends to
select what Buyer believes to be the best portions of the Eligible Solar Land,
which may consist of multiple parcels that are not contiguous, provided that such
selection shall not (x) cause any remaining portion of the Eligible Solar Land to
be without access to public roads (including across Seller's property or easements
granted by Buyer) or (y) cause land that would otherwise be usable for normal
agricultural or commercial purposes to become unusable for such purposes
(taking into account easements granted by Buyer).
Seller agrees to give Buyer prompt written notice if it intends to sell or market for
sale all or any portion of the Eligible Western Solar Land to an entity not
affiliated with Seller. Seller may accelerate the deadline for Buyer to make a
Designation with respect to all or portions of the Eligible Western Solar Land as
follows: If, from time to time, Seller and an entity not affiliated with Seller enter
into a letter of intent or other similar written arrangement ("LOI") setting forth the
property to be sold (the "Proposed Property"), the price and the other principal
terms of for sale of all or any portion of the Eligible Western Solar Land (a
"Proposed Sale") and granting the buyer exclusivity, and if Seller desires to
accelerate such deadline, Seller shall give a copy of the LOI to Buyer along with a
statement that Seller is accelerating Buyer's deadline to make a Designation with
respect to the Proposed Property (an "Acceleration Notice"). Following Buyer's
receipt of an Acceleration Notice, Buyer may make a Designation with respect to
all or portions of the Proposed Property (consistent with the standards in the
immediately preceding paragraph) not later than ninety (90) days after its receipt
of the Acceleration Notice. If Buyer does not timely make a Designation with
respect to any portion of the Proposed Property (the "Undesignated Property"),
Seller may proceed to close the sale of the Undesignated Property at any time
within one (1) year after the date of the Acceleration Notice and, in connection
with such closing, Buyer shall execute such documents in recordable form as are
reasonably requested by Seller to evidence that the Option does not apply to the
Undesignated Property. If the sale of the Undesignated Property does not close
within one (1) year after the date of the Acceleration Notice, the Undesignated
Property shall continue to be eligible to be made subject to a Designation as if no
Acceleration Notice had been given, but without prejudice to Seller's right to
issue a. new Acceleration Notice. This paragraph shall terminate upon the earlier
to occur. of Buyer's Designation of its full 5,000 acre allotment or twenty four
(24) months after the Closing Date. -
The right to issue an Acceleration Notice shall not apply to sales of Proposed
Property for purposes of development of solar energy projects greater than 5 NM -
in the aggregate on the Eligible Western Solar Land and Seller shall so restrict its
buyer in an agreement in which Buyer is made a third party beneficiary in a form
reasonably acceptable to Buyer. Nothing in this paragraph imposes a restriction
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LAU 895086.4 paf Amendment to PSA
on the use of any of the Eligible Western Solar Land sold by Seller to a buyer if
Seller had not issued an Acceleration Notice with respect to the property sold."
1.2 New Exhibit N. Exhibit A attached hereto and made a part hereof is
hereby added as Exhibit N to the Original Purchase Agreement.
1.3 Addition to Section 10.2. In the last sentence of Section 10.2, the word
"Eligible" is hereby added in front of "Solar Land". A new last sentence is hereby added to the
end of :Section 10.2 as follows: "If Seller effects any sale of the Eligible Solar Land when the
restriction in the immediately preceding sentence is still in effect, Seller shall impose such
restriction on its buyer in an agreement in which Buyer is made a third party beneficiary in a
form reasonably acceptable. to Buyer."
1.4 Title and Survey. Buyer hereby acknowledges that it has satisfied itself
concerning the condition of Title and hereby waives the Contingency Period as it relates to the
investigation of Title, except that the parties agree that the following items remain outstanding
(which items shall be deemed approved at 5:00 pm September 2, 2008 unless disapproved in
writing by Buyer): (a) Buyer has not yet received a Title Report with respect to the Eligible
Western Solar Land and is therefore unable to provide to Seller notice of any Title Objections
affecting such property on or before the end of the Contingency Period; (b) Buyer has provided
to Title Company and Seller notice of certain Title Objections affecting the Property but has not
yet received an amended or supplemented Title Report eliminating or modifying such Title
Objections; and (c) Buyer has been unable to make all arrangements with Title Company
regarding the form of the Title Policy and/or endorsements, Title Company's willingness to issue
the Title Policy without a Survey and the inclusion of coverage of the Option.
1.5 Grazing Rights/Leases. Buyer does not presently approve of any
grazing leases encumbering the Property. Any grazing leases will be affecting the Property shall
be negotiated between the Parties following the Closing Date if mutually desired.
1.6 Buyer's Investigations. Buyer hereby acknowledges that it has satisfied
itself concerning the Investigations described in Section 6.3 of the Original Purchase Agreement
with the exception that the Parties hereby agree that Buyer has (a) the right to receive and
approve an EIR application and project description filed with. Kern County, California by a wind
developer (which shall be deemed approved at 5:00 pm September 2, 2008 unless disapproved in
writing by Buyer) and (b) review and approve the effect of setbacks from the Pacific Crest Trail:
(which items (a) and (b) shall be deemed approved at 5.00 pm September 2 2008 unless
disapproved in writing by Buyer).
2. Miscellaneous.
2.1 Governing Law. The validity, interpretation and effect of this Amendment
are governed by and shall be construed in accordance with the laws of the State of California
applicable to contracts made and performed in such State and without regard to conflicts of law
doctrines except to the extent that certain matters are preempted by Federal law or are governed
by the law of the jurisdiction of organization of the respective Parties.
3'
LA\1895086.4 paf Amendment to PSA
2.2 Counterparts. This Amendment may be executed in one or more
counterparts, each of which is an original, but all of which together constitute one and the same
instrument.
2.3 Limited Effect. This Amendment is intended to'be a part of, and will
serve as a valid written amendment to, the Original Purchase Agreement. Except as otherwise
set forth in this Amendment, this Amendment shall not by implication or otherwise alter, modify,
amend or in any way affect any of the teens, conditions, obligations, covenants or agreements
contained in the Original Purchase Agreement, all of which are ratified and affirmed in all
respects and shall continue in full force and effect, and this Amendment will not operate as an
extension or waiver by the Parties of any condition, covenant, obligation, right, power or
privilege under the Original Purchase Agreement.
[SIGNATURE PAGES FOLLOW]
4
LAU 895086.4 paf Amendment to PSA
IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment as of
the Effective Date.
SELLER:
ReNu RESOURCES, LLC,
a Delaware limited liability company
By:
Name:
Title:
BUYER:
CITY OF VERNON,
a California chartered city
By: , -,A
Name: Go-dz'4a. -
Title: M�f`oQ Afa 7E/?
ATTEST:
By:
ame: iC►2 f S'; �r�.► r.,� o M o 'F�
DFFNT Y City Clerk
APPROVED AS O FORM:
By:-�
W#le ally 4T70/i
LAU 895086.4 paf Amendment to PSA
ESCROW AGENT'S ACKNOWLEDGEMENT
The undersigned hereby executes this Amendment to evidence its receipt of fully -
executed originals of the Original Purchase Agreement and this Amendment and its agreement to
act in accordance with the terms of the Original Purchase Agreement as amended by this
Amendment.
Dated: August—, 2008
COMMERCE ESCROW COMPANY
r. By:
Name:
Title:
LAU895086.4 paf Amendment to PSA
hli.11C Y
DESCRIPTION OF ELIGIBLE WESTERN SOLAR LAND
[to come from Seller]
LAU 895096.4 paf Amendment to PSA
EXHIBIT B
SECOND AMENDMENT
TO
PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS
THIS SECOND AMENDMENT TO PURCHASE AND SALE AGREEMENT AND
JOINT ESCROW INSTRUCTIONS (this "Amendment") is made as of September 4, 2008 (the
"Effective Date"), by and between the CITY OF VERNON, a California chartered city
("Buyer"), and ReNu RESOURCES, LLC, a Delaware limited liability company ("Seller").
RECITALS:
A. Buyer and Seller are parties to that certain Purchase and Sale Agreement and Joint
Escrow Instructions made as of August 13, 2008 (as amended by that certain First Amendment to
Purchase and Sale Agreement and Joint Escrow Instructions dated as of August 28, 2008, the
"Original Purchase Agreement"). All capitalized terms used herein and not otherwise defined
herein have the meanings ascribed to them in the,Qriginal Purchase Agreement. The Original
Purchase Agreement, as amended by this Amendment, is referred to herein as the "Purchase
Agreement".
herein.
B. Buyer and Seller desire to amend the Original Purchase Agreement as provided
AGREEMENT:
NOW, THEREFORE, in consideration of the mutual covenants contained in this
Amendment and for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Parties do hereby agree as follows:
1. Expiration of Contingency Period. The Parties agree that the Contingency Period
has expired and that Buyer has elected to proceed with the acquisition of the Wind Property,
subject to satisfaction of all conditions precedent for the benefit of Buyer set forth in the
Purchase Agreement.
2. Clarification of Closing Condition Respecting Title Insurance. The condition
precedent in Section 5.3 shall not be satisfied, and Seller shall conclusively be deemed unable to
convey good and marketable Title to the Wind Property pursuant to the Purchase Agreement, in
the event that Buyer does not receive at Closing a policy of title insurance (a) in the amount of
the Base Purchase Price and in form and substance reasonably satisfactory to Buyer, (b) from a
title insurer reasonably acceptable to Buyer, and (c) at regular rates and without collateral
support in the form of guarantees, escrows, etc.
3. Miscellaneous,
3.1 Governing Law. The validity, interpretation and effect of this Amendment
are governed by and shall be construed in accordance with the laws of the State of California
applicable to contracts made and performed in such State and without regard to conflicts of law
doctrines except to the extent that certain matters are preempted by Federal law or are governed
by the law of the jurisdiction of organization of the respective Parties.
1,A11896370,4
3.2 Counterparts. This Amendment may be executed in one or more
counterparts, each of which is an original, but all of which together constitute one and the same
instrument.
3.3 Limited Effect. This Amendment is intended to be a part of, and will
serve as a -valid written amendment to, the Original Purchase Agreement. Except as otherwise
set forth in this Amendment, this Amendment shall not by implication or otherwise alter, modify,
amend or in any way affect any of the terms, conditions, obligations, covenants or agreements
contained in the Original Purchase Agreement, all of which are ratified and affirmed in all
respects and shall continue in full force and effect, and this Amendment will not operate as an
extension or waiver by the Parties of any condition, covenant, obligation, right, power or
privilege under the Original Purchase Agreement.
[SIGNATURE PAGES FOLLOW]
2
LA\I 896370.4
IN WITNESS WHEREOF, the Parties hereto have duly executed this Amendment as of..
the Effective Date,
SELLER:
ReNu RESOURCES, LLC,
a Delaware limited liability company
By:
Name:
Title:�
BUYER:
CITY OF VERNON,
ATTEST:
a California chartere��djj
city
By: e. ,
By:
,r�', ,G''!wl'
Name: Hilaro Gonzales
Name: Manuals
Title: City Councilman and
City Clerk
Mayor Pro—Tem
APPROVEDVA'O FORM:
By:
LA%1896770.4
ESCROW AGENT'S ACKNOWLEDGEMENT
The undersigned hereby executes this Amendment to evidence its receipt of fully -
executed originals of the Original Purchase Agreement and this Amendment and its agreement to
act in accordance with the terms of the Original Purchase Agreement as amended by this
Amendment.
Dated: September_, 2008
COMMERCE ESCROW COMPANY
By:
Name:
Title:
LA\1896370A
SECOND AMENDMENT
TO
PURCHASE AND SALE AGREEMENT AND JOINT ESCRO
. THIS SECOND AMENDMENT TO PURCHASE AND SALE AGREEMENT AND
JOINT ESCROW INSTRUCTIONS (this "Amendment") is made as of September 4, 2008 (the
"Effective Date"), by and between the CITY OF VERNON, a California chartered city
(`Buffer"), and ReNu RESOURCES, LLC, a Delaware limited liability company ("Seller").
RECITALS:
A. Buyer and Seller are parties to that certain Purchase and Sale Agreement and Joint
Escrow Instructions made as of August 13, 2008 (as amended by that certain First Amendment to
Purchase and Sale Agreement and Joint Escrow Instructions dated as of August 28, 2008, the
"Original Purchase Agreement'). All capitalized terms used herein and not otherwise defined
herein have the meanings ascribed to them in the Original Purchase Agreement. The Original
Purchase Agreement, as amended by this Amendment, is referred to herein as the "Purchase
Agreement".
B. Buyer and Seller desire to amend the Original Purchase Agreement as provided
herein.
AGREEMENT:
NOW, THEREFORE, in consideration of the mutual covenants contained in this
Amendment and for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Parties do hereby agree as follows:
1. Expiration of Contingency Period. The Parties agree that the Contingency Period
has expired and that Buyer has elected to proceed with the acquisition of the Wind Property,
subject to satisfaction of all conditions precedent for the benefit of Buyer set forth in the
Purchase Agreement.
2. Clarification of Closing Condition Respecting Title Insurance. The condition
precedent in Section 5.3 shall not be satisfied, and Seller shall conclusively be deemed unable to
convey good and marketable Title to the Wind Property pursuant to the Purchase Agreement, in
the event that Buyer does not receive at. Closing a policy of title insurance (a) in the amount of
the Base Purchase Price and in form and substance reasonably satisfactory to Buyer, (b) from a
title insurer reasonably acceptable to Buyer, and (c) at regular rates and without collateral
support in the form of guarantees, escrows, etc.
Miscellaneous.
3.1 Governing Law. The validity, interpretation and effect of this Amendment
are governed by and shall be construed in accordance with the laws of the State of California
applicable to contracts made and performed in such State and without regard to conflicts of law
doctrines except to the extent that certain matters are preempted by Federal i law or are governed
by the law of the jurisdiction of organization of the respective Parties.
LA\l 896370.4
3.2 Counterparts. This Amendment may be executed in one or more
counterparts, each of which is an original, but all of which together constitute one and the same
instrument.
3.3 Limited Effect. This Amendment is intended to be a part of, and will
serve as a valid written amendment to, the Original Purchase Agreement. Except as otherwise
set forth in this Amendment, this Amendment shall not by implication or otherwise alter, modify,
amend or in any way affect any of the terms, conditions, obligations, covenants or agreements
contained in the Original Purchase Agreement, all of which are ratified and affirmed in all
respects and shall continue in full force and effect, and this Amendment will not operate as an
extension or waiver by the Parties of any condition, covenant, obligation, right, power or
privilege under the Original Purchase Agreement.
[SIGNATURE PAGES FOLLOW]
2
LA\1896370A
IN WITNESS WHEREOF, the Parties hereto have duly executed this Amendment as of
the Effective Date.
SELLER:
ReNu RESOURCES, LLC,
a Delaware limited liability company
By:
Name:
Title:
BUYER:
CITY OF VERNON,
a California chartered city
Name: Hilario Gonzales
Title: City Councilman and
Mayor Pro-Tem
LA\l 896370.4
ATTEST:
464-IL
By:
ame: Manuela biAn
City Clerk
APPROVED A �OFORM:
By:
_ Qt
tle: C/TY
ESCROW. AGENT'S ACKNOWLEDGEMENT
The undersigned hereby executes this Amendment to evidence its receipt of fully -
executed originals of the Original Purchase Agreement and this Amendment and its agreement to
act in accordance with the terms of the Original Purchase Agreement as amended by this
Amendment.
Dated: September_, 2008
COMMERCE ESCROW COMPANY
By:_
Name:
Title:
LA\1896370.4