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Resolution No. 098752 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 090010 20 21 22 23 24 25 26 27 28 RESOLUTION NO. 9875 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF VERNON APPROVING AND AUTHORIZING THE EXECUTION OF A LEASE AGREEMENT BY AND BETWEEN THE CITY OF VERNON AND RENU RESOURCES, LLC FOR HORSE AND CATTLE GRAZING WHEREAS, on August 12, 2008, the City Council of the City of Vernon adopted Resolution No. 9689 approving a Purchase and Sale IAgreement and Joint Escrow Instructions dated August 13, 2008, as amended on August 28, 2008, September 4, 2008 and October 8, 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 Irenewable 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, the City and ReNu desire to enter into a lease of the Wind Property for the purpose of horse and cattle grazing on a year-to-year basis subject to 30-days notice for termination. 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 and correct. SECTION 2: The City Council of the City of Vernon hereby approves the Lease Agreement with ReNu, in substantially the same form as the copy which is attached hereto as Exhibit A and incorporated by 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 reference. SECTION 3: The City Council of the City of Vernon hereby authorizes the Mayor or Mayor Pro-Tem to execute said Lease for, and on behalf of, the City of Vernon and the City Clerk or Deputy City Clerk is hereby authorized to attest thereto. SECTION 4: The City Council of the City of Vernon hereby authorizes the City Administrator, or his designee, to make whatever nonsubstantive, administrative and/or text changes, upon advice of counsel, to the Lease. SECTION 5: The City Council of the City of Vernon hereby directs the City Clerk, or her designee, to send one fully executed Lease to ReNu. SECTION 6: 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 to implement the Lease consistent with the terms of said Lease approved herein. 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 23 rd day of February, 2009. Leonis�C- Malburg Name: Title: Mayor ATTEST: D4ANt`ELA GIRON"—Cify Clerk - 2 - 1 STATE OF CALIFORNIA ) ss 2 COUNTY OF LOS ANGELES 3 4 1, MANUELA GIRON, City Clerk of the City of Vernon, do hereby 5 certify that the foregoing Resolution, being Resolution No. 9875, was 6 duly adopted by the City Council of the City of Vernon at a regular 7 meeting of the City Council duly held on Monday, February 23, 2009, and 8 thereafter was duly signed by the Mayor or Mayor Pro-Tem of the City of 9 Vernon. 10 11 MANUELA nRON, City Clerk 12 (SEAL) 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 I - 3 - EXHIBIT A L& W Draft February 11, 2009 Privileged and Confidential LEASE AGREEM[ENT THIS LEASE (this "Lease") is,entered into as of February [_], 2009 (the "Execution Date"), by and between the CITY OF VERNON, a California chartered city ("Landlord"), and RENU RESOURCES, LLC, a Delaware limited liability company ("Ten '). Landlord and Tenant are referred to herein sometimes individually as a "PgAy" and collectively as the "Parties". RECITALS A. Tenant sold to Landlord property in Kern County, California consisting of approximately 29,722.44 acres and which is legally described in Exhibit A attached hereto (the "Property") on October 17, 2008 (the "Closing Date"). —B�-T-e-nant-de-sire-s-to-le-ase-the-P-roperty-from-L-andlord-for the purpose -of horse and ---- cattle grazing, and Landlord has agreed to Lease the Property to Tenant on the terms and conditions set forth herein C. Tenant is entering into this Lease for the purpose of horse and cattle grazing as it has been used in the past and for no other purpose and shall maintain the Property consistent with accepted grazing practices. Tenant's use of the land is subject to appropriate environmental review and compliance with or exemption from all applicable laws, including the California Environmental Quality Act. AGREEMENT NOW, THEREFORE, in consideration of the mutual promises and agreements hereinafter contained, and �or good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows: 1. Leased Premises. Landlord hereby leases the Property to Tenant and Tenant leases the Property from Landlord, upon the terms and conditions set forth in this Lease., 2. Term. The term of this Lease shall commence as of the Execution Date and shall continue until midnight on October 16, 2009 (the "Expiration Date"), unless earlier terminated in accordance with the terms of this Lease. Following the Expiration Date, the term of this Lease shall continue on a year-to-yearbasis unless cancelled by either Party upon notice given to the other Party not less than sixty (60) days prior to the expiration of the then current term. Landlord acknowledges that Tenant has,been using the land for grazing purposes as set forth herein since the Closing Date. 3. Termination. In its sole and absolute discretion, Landlord may terminate this Lease at any time upon thirty (30) days written notice to Tenant. Landlord shall not be held liable to Tenant in connection with Landlord's exercise of its right of termination under this Lease. LA\1930088.2 4. Rent. This Lease is granted in consideration of, among other things, Tenant's agreement to sell the Property to Landlord and Tenant's agreement to maintain the existing grazing infrastructure on the Property. Accordingly, Tenant shall be entitled to lease the Property without the obligation to pay rent or similar fees to Landlord. 5. Use of Premises. The Property is leased for the purpose of horse and cattle grazing and for no other purpose. The number of cattle and horses grazed under this Lease and any subleases will not exceed six thousand (6000) Animal Unit Months at any time. As used herein, any mature cow, bull, steer or horse shall constitute one Animal Unit and any weaned steeribull calf or heifer calf shall constitute one-half (1/2) of an Animal Unit. Suckling calves are not included in Animal Units. Tenant shall use good ranching practices utilized in the area, in compliance with all existing and future laws, ordinances and regulations applicable to Tenant's use of the Property. Tenant agrees that it shall not use or permit the use, storage or dumping of waste, sewage or sludge or other substance on the Property which has any potential of contaminatin the soil or jzroundwater underl 'ng-.th.e-Prop-erty,-except-for-materials or chemicals - currently utilized consistent with good ranching practices in the area or waste generated by the cattle or horses. Tenant shall not use or knowingly permit any part of the Property to be used for any unlawful purpose. Tenant shall be solely responsible for the supervision, feeding, watering, veterinary and other care of Tenant's livestock and for the acts of Tenant's livestock. Notwithstanding the definition of "Property," grazing may only take place on such portions of the Property and with such intensity of livestock as Landlord may reasonably permit from time to time such that the grazing will not interfere with any activity performed by Landlord on the Property, including but not limited to the development of wind projects. 6. Repairs and Maintenance. Tenant, at Tenant's expense, shall keep and maintain the portions of the Property associated with grazing practices, and every part thereof, in an order, condition and repair that is at least as good as at the commencement of the term of this Lease. Without limiting the generality of the foregoing, Tenant shall be responsible for all routine operating, maintenance and repair_costs in connection with Tenant's use of the Property. Tenant shall keep the buildings, fences, corrals, pumps, and'motors associated with grazing practices, (collectively, the "IMprovements") installed on the Property in an order and repair that is at least as good as at the commencement of the term of this Lease. Tenant shall not allow any abandoned vehicles previously used by Tenant or its invitees, agents, contractors or sublessees to remain on the Property. Tenant shall maintain the Property in accordance with good ranching practices, shall commit no act or suffer or permit any of Tenant's invitees, agents, contractors or sublessees to commit any act that allows for the escape of water (except through natural streams and waterways) from the Property and shall not damage or suffer or permit any of Tenant's invitees, agents, contractors or sublessees to damage any water ditch that runs through the Property. Should any of the Improvements or any part of the Property, related to Tenant's operation, be in need of repair or replacing, Tenant shall repair or replace the same at Tenant's sole expense. If any part is replaced, the new part shall be of the same or better quality, size and type, and shall be maintained and left in good condition. - 7. Landlord's Right to Information. Tenant shall respond to all reasonable requests for information from Landlord regarding its usage of the land. Tenant shall promptly -2- LA\1930088.2 notify Landlord upon Tenant's awareness of any event that could reasonably be expected to have an adverse impact upon Landlord's interest in the Property. 8. Property Taxes. (i) Tenant shall pay, prior to delinquency, all personal property taxes or assessments levied upon Tenant's personal property situated on or about the Property, and (ii) Landlord shall pay all real property taxes or assessments levied in connection with the Property. Tenant shall take no action in its operations or construct any improvements which will result in an increase in Landlord's liability for real property taxes. 9. Insurance. At all times during the Term hereof and at Tenant's sole cost, Tenant shall maintain in full force and effect, comprehensive general liability insurance with an aggregate liability amount not less than $2,000,000 combined single limit, and (iii) any other insurance required applicable by law during the Term in connection with Tenant's use of the Property. Landlord shall be an additional insured pursuant to such general liability policies and the -insurance required by this -Section shall be primary as respects-Landlord-and-not-contr-ibutory---- with any other available insurance, shall contain such endorsements as are reasonably acceptable to Landlord, and shall require not less thanIhirty (30) days prior notice to Landlord in the event of cancellation or modification. All insurance required to be carried by Tenant hereunder shall be issued by insurance companies qualified to do business in the State of California and rated A:VIII or better in the most current issue of "Best's Key Rating Guide." Upon execution of this Lease, and upon request of Landlord, Tenant shall provide Landlord with a certificate evidencing such insurance and compliance with the terms of this Section, including the naming of Landlord as an additional insured. 10. Hazardous Substances. Except in compliance with applicable laws and regulations, Tenant shall not use, store or knowingly permit hazardous or toxic substances, materials or waste, or similar substances, as defined under applicable federal and state laws and regulations ("Hazardous Substances"). Tenant shall comply with all applicable federal, state and local environmental protection, occupational, health and safety and similar laws, ordinances, restrictions, licenses and regulations. 11. Right of ERtry. Landlord or its agents, servants employees or representatives may enter the Property at any reasonable time (i) for the purpose of ascertaining compliance by Tenant with the requirements of this Lease, (ii) in connection with Landlord's development, leasing or sale of the Property, or (iii) for the purpose of doing o . ther lawful acts that may be necessary to protect Landlord's interest in the Property. Notwithstanding the above, Landlord shall not materially interfere with Tenant's ranching operations. 12. Alterations and Mechanics' Liens. a. Tenant shall not make or permit any new alterations or improvements (excluding fencing and installing necessary irrigation systems) to the Property having a value in excess of $10,000 without the prior written consent of Landlord, which consent shall not be unreasonably withheld. The foregoing notwithstanding, Tenant may make necessary repairs to the Property and the improvements thereon as needed without Landlord's consent. Any alterations or improvements placed upon the Property shall be constructed in a good and -3- LA\1930088.2 workmanlike manner and shall be in full compliance with any applicable laws, ordinances and regulations. Upon termination or expiration of this Lease, any improvements and alterations not promptly removed by Tenant (other than trade fixtures) shall be the property of Landlord, and no reimbursement to Tenant shall be required. I b. Any alterations or improvements placed upon the Property by Tenant shall be constructed at Tenant's sole cost and expense in the absence of Landlord's prior agreement to the contrary. Tenant shall keep the Property free and clear of any and all liens arising out of any work performed or materials furnished at the request of Tenant, or obligations incurred by Tenant and at termination of this Lease restore the Property to the condition it was in at the commencement of this Lease. C. Notwithstanding any other provision of this Lease, Landlord acknowledges that the following equipment may be removed from the Property by Tenant upon termination of this Lease: 13. Liens, Taxes, Assessments, Utility Charges, etc. Tenant shall not permit to be enforced against the Property or any part thereof, any liens arising from Tenant's use of the Property or from Tenant's failure to fully comply with the obligations set forth, in this Lease� and Tenant shall discharge or post bond against all such liens before any action is brought to enforce the same. All things in this Lease provided to be done by Tenant shall be done by Tenant at its' own cost and expense, except as may be herein otherwise expressly provided. Tenant shall pay for all fuel, power, electricity, sewer, water and/or telephone service used by it on the Property, including demand charges, and any other utility service or services of any kind or character whatsoever that Tenant may require. Tenant shall also pay for all costs and charges of any kind or character whatsoever that may be necessary for the full and proper grazing of the Property and the conducting of its grazing operations, including, but not limited to, feed not provided by the Property, supplies and materials of all kinds, costs of grazing, fertilizing, spraying, or other disease control regarding grazing on the Property pursuant to this Lease. If Tenant uses any utility charged to Landlord, Tenant shall promptly reimburse Landlord therefor. 14. Default and Remedies. .a. Any failure by Tenant to cure any breach of this Lease within thirty (30) days after receipt of written notice thereof from Landlord shall be deemed a default under this Lease. b. Upon any default by Tenant under the terms of this Lease, Landlord shall have the right to exercise any and all remedies available at law or in equity including, without limitation, the right to terminate Tenant's right to possession of the Property by any lawful means, in which case, this Lease shall terminate and Landlord shall be entitled to recover from Tenant all damages incurred by Landlord by reason of Tenant's default. C. Notwithstanding the foregoing, in no event shall either Party be liable for consequential damages for any reason. -4- LA\1930088.2 15. Notices. All notices and other communications made pursuant hereto shall be in writing and shall be deemed properly delivered, given or served when (i) personally delivered, or (ii) mailed by certified or registered mail, postage prepaid, return receipt requested and addressed to the other party at the address stated herein below, or at an address the party may hereafter' designate in writing-. If to Tenant: c/o CIM Group, Inc. 6922 Hollywood Blvd., Suite 900 Los Angeles, California 90028 Attention:, General Counsel Facsimile No: (310) 496-2887 with a copy to: ---Renewable-Resource-s- Group Holding Company, Inc. c/o Western Development & Storage, LLC 5700 Wilshire Boulevard, Suite 330 Los Angeles, California Attention: Lloys Frates Facsimile No: (323) 930-9114 If to Landlord: The City of Vernon 4305 Santa Fe Avenue Vernon, California 90058, Attention: Eric T. Fresch, City Administrator Facsimile No.: (323) 587-7596 with a copy to: The City of Vernon 4305 Santa Fe Avenue Vernon, California 90058 Attention: Jeff Harrison, Esq., City Attorney Facsimile No.: (323) 587-7596 16. Attorneys' Fees. In the event of any litigation between Landlord and Tenant to interpret or enforce any of the provisions of the Lease or any right of either party hereto, the unsuccessful party to such litigation agrees to pay to the successful party all costs and expenses including, but not limited to, reasonable attorneys' fees and expert witness fees, incurred therein by the successful party, all of which shall be included in and as a part of judgment rendered in such litigation. 17. Waivers. A waiver by any party of any of the terms and conditions of this Lease in anyone instance shall not be deemed or construed to be a waiver of such term or condition for the future, or of any subsequent breach thereof, nor shall it be deemed a waiver of performance of any other obligation hereunder. No waiver by either party shall be effective unless contained in a writing signed by the waiving party. -5- LA\1930088.2 I-, 18. Assignment and Subletting. Tenant shall not, without the prior written consent of Landlord, assign, mortgage, pledge, encumber, or permit any lien to attach to, or otherwise transfer, this Lease or any interest hereunder, permit any assignment, or other transfer of this Lease or any interest hereunder by operation of law, sublet the Property or any part thereof, or enter into any license or concession agreements or otherwise permit the occupancy or use of the Property or any part thereof by any persons other than Tenant. 19. Condemnation. In the event that during the Term of this Lease, there is a total or partial taking of the Property by a public authority under the power of eminent domain, then the leasehold estate of Tenant in the Property shall cease and terminate as to that portion of the Property so taken, which termination shall be effective as of the date actual physical possession of said portion of the Property is taken. All compensation and damages awarded for the taking of all or any portion of the Property shall, except as otherwise herein provided, belong to and be the sole vrovertv of Landlord. -orovided however. that. Tenant sh.911 be entifle.cl tf) n mimiif- n Anim against the condemning authority for expenses of relocating the grazing operation, provided that Tenant's claim does not reduce the compensation or damages payable to Landlord. 20. Governing Law. This Lease shall be governed by and construed in accordance with the laws of the State of California. 21. CoMpliance with Laws. Tenant's acknowledges and agrees that its use of the land is subject to appropriate environmental review and compliance with or exemption from all applicable laws, including the California Environmental Quality Act. 22. CMtions, Pronouns. Any titles or captions contained in this Lease are for convenience only and shall not be deemed part of the context of this Lease. All pronouns and any variations thereof shall be deemed to refer to the masculine, feminine, neuter, singular or plural. as to the identification of the person or person, firm or firms, corporation or corporations may require. 23. Entire Agreement. This Lease contains the entire agreement relating to the rights granted and obligations assumed in this instrument and supersedes any and all other agreements, contracts or understandings relating to Tenant's use of the Property and/or any other portion of Onyx Ranch, Any oral representations or modifications concerning this instrument shall be of no force or effect unless contained in a subsequent written modification signed by the party to be charged. 24. No Broker. Each of the parties hereto represents that it has not used or engaged the services of any real estate broker in the negotiation of this Lease and Ahat no real estate commissions are due upon execution or performance hereof. Each party hereto shall indemnify, defend and hold harmless the other party from any claims for real estate commissions resulting from, the indemnifying party's breach of the representation set forth in this paragraph. 25. Recitals. The Recitals set forth above are incorporated herein by reference as operative provisions of this Lease. -6- LA\1930088.2 26. Time of Essence. Time is of the essence with regard to the provisions of this Lease. 27. Tenant's Indemnity. Except to the extent arising from Landlord's willful misconduct or gross negligence, Tenant hereby indemnifies Landlord, and shall forever save and hold Landlord harmless, from. and against all obligations, liens, claims, liabilities, costs (including, but not limited, to all attorneys' and other professional fees and expenses), actions and causes of action, threatened or actual, which Landlord may suffer or incur arising out of or in connection with the use or occupancy of the Property by Tenant or Tenant's invitees, agents, contractors or employees or Tenant's actions and omissions relating to this Lease, including without limitation the use by Tenant of the Property, the conduct of Tenant's business, any activity, work or things done, permitted or suffered by Tenant in or about the Property, Tenant's failure to comply with any applicable law, or any negligence or willful misconduct of Tenant or any -of -its invitees —,agents —,Contractors or employees. -7- LA\1930088.2 IN WITNESS WHEREOF, this tease has been executed by the parties as of the date first written above. TENANT: ReNu RESOURCES, LLC, a Delaware limited liability company M Name. Title: LANDLORD: CITY OF VERNON, ATTEST: a California chartered city M Name: Title: IM M Name: Title: LA\1930088.2 EXHIBIT A PROPERTY DESCRIPTION Parcel 1: (APN: 153-120-10 & 11) The East half, Lots 1 and 2 of the Northwest quarter, and Lots I and 2 of the Southwest quarter of Fractional Section 3 1, Township 29 South, Range 35 East, Mount Diablo Base and Meridian, in the un-incorporated area, County of Kern, State of California, according to the Official Plat thereof. Parcel 2; (APN: 153-110-04) Section 36, Township 29 South, Range-35 East, Mount Diablo Rase and -Meridian, in the un� incorporated area, County of Kern, State of California, according to the Official Plat thereof. Except all oil, gas, oil shale, coal, phosphate, sodium, gold, silver and all other mineral deposits contained in said land, and further reserving to the State of California and persons authorized by the State, the right to drill for and extract such deposits of oil and gas, or gas, and to prospect for, mine and remove such deposits of other minerals from said land and to occupy and use so much of the surface of said land as may be required therefore, upon compliance with the conditions and subject to the provisions and limitations of Chapter 5, Part 1, Division 6 of the Public Resources Code, as reserved in Patent recorded June 10, 1958 in Book 2962, Page(s) 503 of Official Records. Parcel 3: (APN: 153-110-05) Section 35, Township 29 South, Range 35 East, Mount Diablo Base and Meridian, in the un- incorporated area, County of Kern, State of California, according to the Official Plat thereof. Parcel 4: (APN: 153-180-09) The East half of Fractional Section 3 1, Township 29 South, Range 36 East, Mount Diablo Base and Meridian, in the un-incorporated area, County of Kern, State of California, according to the Official Plat thereof. Parcel 5: (APN: 153-180-10) The West half of Fractional Section 3 1, Township 29 South, Range 36 East, Mount Diablo Base and Meridian, in the un-incorporated area, County of Kern, State of California, according to the Official Plat thereof Exhibit A-J LA\1930088.2 Parcel 6: (APN: 181-190-14) The East half of Fractional Section 3 1, Township 30 South, Range 3 8 East, Mount Diablo Base and Meridian, in the un-incorporated area, County of Kern, State of California, according to the Official Plat thereof. Parcel 7: (APN: 181-190-15) The West half of Fractional Section 3 1, Township 30 South, Range 37 East, Mount Diablo Base and Meridian, in the un-incorporated area, County of Kern, State of California, according to the Official Plat thereof. Parcel 8: (APN: 181-190-16) Fractional Section 36, Township 30 South, Range 36 1/2 East, Mount Diablo Base and Meridian in the un-incorporated area, County of Kern, State of California, according to the Official Plat thereof. Except all oil, gas, oil shale, coal, phosphate, sodium, gold, silver and all other mineral deposits contained in said land, and further reserving to the State of California and persons authorized by the State, the right to drill for and extract such deposits of oil and gas, or gas, and to prospect for, mine and remove such deposits of other minerals from said land and to occupy and use so much of the surface of said land as may be required therefor, upon compliance with the conditions and subject to the provisions and limitations of Chapter 5, Part 1, Division 6 of the Public Resources Code, as reserved in Patent recorded July 29, 1959 in Book 3170, Page(s) 179 of Official Records. Parcel 9: (APN: 442-010-07) Section 11, Township 30 South, Range 34 East, Mount Diablo Base and Meridian, in the un- incorporated area, County of Kern, State of California, according to the Official Plat thereof. Except an undivided 1/2 interest in all oil, gas and hydrocarbon substances, within or underlying said land, as granted to J.C. Walser, also known as John Caswell Walser and Blanche Walser, husband and wife as joint tenants, in Deed recorded July 9, 1937 in Book 73 1, Page(s) 490 of Official Records. Parcel 10: (APN: 442-010-04) Fractional Section 1, Township 30 South, Range 34 East, Mount Diablo Base and Meridian, in the un-incorporated area, County of Kern, State of California, according to the Official Plat thereof. Exhibit A-2 LA\1930088.2 f Parcel 11: (APN: 442-010-02) The South half of the South half of Fractional Section 2, Township 30 South, Range 34 East, Mount Diablo Base and Meridian, in the un-incorporated area, County of Kern, State of California, according to the Official Plat thereof. Except an undivided 1/2 interest in all oil, gas and hydrocarbon substances, within or underlying said land, as granted to J.C. Walser, also known as John Caswell Walser and Blanche Walser, husband and wife as joint tenants, in Deed recorded July 9, 1937 in Book 73 1, Page(s) 490 of Official Records. Parcel 12: (APN: 442-030-05) Section 13, Township 30 South, Range 34 East, Mount Diablo Base and Meridian, in the un- .�ncorporated-area�-County-of-K-em,-State of Califomia-,according-to-the Official-Plat-ther-co-f-. Parcel 13: (APN: 442-030-03) Section 14, Township 30 South, Range 34 East, Mount Diablo Base and Meridian, in the un- incorporated area, County of Kem, State of California, according to the Official Plat thereof. Except all the coal and other minerals in the land so patented together with the right to prospect for, mine and remove the same pursuant to the provisions and limitations of the Act of December 29, 1916 (Stat. 862) as reserved by the United States of America in the Patent recorded December 24, 1923 in Book 22, Page(s) 19 of Official Records. Parcel 14: (APN: 443-010-02) Section 23, Township 30 South, Range 34 East, Mount Diablo Base and Meridian, in the un- incorporated area, County of Kem, State of California, according to the Official Plat thereof. Parcel 15: (APN: 444-010-01) Fractional Section 3, Township 30 South, Range 35 East, Mount Diablo Base and Meridian, in the un-incorporated area, County of Kern, State of California, according to the Official Plat thereof. Parcel 16: (APN: 444-010-04) Lots I and 2 of the Northeast quarter, the South half of the Northeast quarter; and the Southeast quarter, of Fractional Section 2, Township 30 South, Range 35 East, Mount Diablo, Base and Meridian, in the un-incorporated area, County of Kern, State of California, according to the Official Plat thereof. Exhibit A-3 LA\1930088.2 Parcel 17: (APN: 444-020-16) Fractional Section 7, Township 30 South, Range 35East, Mount Diablo Base and Meridian, in the un-incorporated area, County of Kern, State of California, according to the Official Plat thereof. Parcel 18: (APN: 444-020-14) The North half of the North half of Section 8, Township 30 South, Range 35 East, Mount Diablo Base and Meridian, in the un-incorporated area, County of Kern, State of California, according to the Official Plat thereof. Except and reserving to the United States, pursuant to the provisions of the Act of August 1, 1946 ('-60-S-Aat-755 -all-uranium, thorium or -any -other -materials -which -is -or may be -determine to be peculiarly essential to the production of fissionable materials, whether or not of commercial value, together with the right of the United States through it's authorized agents or representatives at any time to enter upon the lands and prospect for, mine and remove the same as reserved in the Patent from the United States of America, recorded April 27, 1949 in Book 1612, Page(s) 130 of Official Records. Parcel 19: (APN: 444-020-03) Fractional Section 5, Township 30 South, Range 35 East, Mount Diablo Base and Meridian, in the un-incorporated area, County of Kern, State of California, according to the,Official Plat thereof. Parcel 20: (APN: 444-020-09) The West half of the Northeast quarter; the Southwest quarter of the Southeast quarter, and the West half of Section 9, Township 30 South, Range 35 East, Mount Diablo Base and Meridian, in the un-incorporated area, County of Kern, State of California, according to the Official Plat thereof. Parcel 21: (APN: 444-010-13) The North half of the Northeast quarter, the Southwest quarter of the Northeast quarter, the Southeast quarter of the Northwest quarter, the West half of the Southeast quarter, and the East half of the Southwest quarter, of Section 10, Township 30 South, Range 35 East, Mount Diablo Base and Meridian, in the un-incorporated area, County of Kern, State of California, according to the Official Plat thereof. Exhibit A-4 LA\1930088.2 Parcel 22: (APN: 444-030-06) The East half of the Southeast quarter, the Southwest quarter of the Southeast quarter of Section 14, Township 30 South, Range 35 East, Mount Diablo Base and Meridian, in the un-incorporated area, County of Kern, State of California, according to the Official, Plat thereof. Parcel 23: (APN: 1444-010-10) Section 11, Township 30 South, Range 35 East, Mount Diablo Base and Meridian, in the un- incorporated area, County of Kern, State of California, according to the Official Plat thereof. Parcel 24: (APN: 444-030-01) Section 15, Township 30 South, Range 35 East, Mount Diablo Base and Meridian, in the un- incorporated area, C ounty of KemState-of California, according to the Official -Plat -thereof. Parcel 25: (APN: 444-030-08) Section 13, Township 30 South, Range 35 East, Mount Diablo Base and Meridian, in the un- incorporated Area County of Kern, State of California, according to the Official Plat thereof. Parcel 26: (APN: 444-040-02) Section 17, Township 30 South, Range 35 East, Mount Diablo Base and Meridian, in the un- incorporated area, County of Kern, State of California, according to the Official Plat thereof. Parcel 27: (APN: 444-040-09, 11 and 13) The West half of the Northeast quarter, the East half of the Northeast quarter, the North half of the Southeast quarter, the South half of the Southeast quarter, and the Southwest quarter of Section 16, Township 30 South, Range,35 East, Mount Diablo Base and Meridian, in the un- incorporated area, County of Kern, State of California, according to the Official Plat thereof. Parcel 28: (APN: 444-040-15) Section 21, Township 30 South, Range 35 East, Mount Diablo Base and Meridian, in theu'n- incorporated area, County of Kern, State of California, according to the Official Plat thereof. Parcel 29: (APN: 444-030-11) Section 23, Township 30 South, Range 35 East, Mount Diablo Base and Meridian, in the un- incorporated area, County of Kern, State of California, according to the Official Plat thereof. Exhibit A-5 LA\1930088.2 Parcel 30: (APN: 444-060-05) The North half of Section 28, Township 30 South, Range 35 East, Mount Diablo Base and Meridian, in the un-incorporated area, County of Kem, State of California, according to the Official Plat thereof. Parcel 31: (APN: 444-070-01 & 02) Fractional Section 3, Township 30 South, Range 36 East, Mount Diablo Base and Meridian, in the un-incorporated area, County of Kern, State of California, according to the Official Plat thereof. Parcel 32: (APN: 444-080-05) The North half of Fractional Section 5, Township 30 South, R ge 36 East Mount Diablo Bas and Meridian, in the un-incorporated area, County of Kem, State of California, according to the Official Plat thereof. Parcel 33: (APN: 444-080-06) The South half of Fractional Section 5, Township 30 South, Range 36 East, Mount Diablo Base and Meridian, in the un-incorporated area, County of Kern, State of California, according to the Official Plat thereof. Parcel 34: (APN: 444-080-11) The West half, and the Southwest quarter of the Southeast quarter of Section 8, Township 30 South, Range 36 East, Mount Diablo Base and Meridian, in the un-incorporated area, County of Kern, State of California, according to the Official Plat thereof. Parcel 35: (APN: 444-080-09) Section 9, Township 30 South, Range 36 East, Mount Diablo Base and Meridian, in the un- incorporated area, County of Kern, State of California, according to the Official Plat thereof. Parcel 36: (APN: 444-080-01 & 02) Fractional Section 6, Township 30 South, Range 36 East, Mount Diablo Base and Meridian, in the un-incorporated area, County of Kern, State of California, according to the Official Plat thereof. Parcel 37,: (APN: 444-080-13 & 15) Fractional Section 7, Township 30 South, Range 36 East, Mount Diablo Base and Meridian, in the un-incorporated area, County of Kem, State of California, according to the Official Plat thereof. Exhibit A-6 LA\1930088.2 Parcel 38: (APN: 444-090-01) Section 15, Township 30 South, Range 36 East, Mount Diablo Base and Meridian, in the un- incorporated area, County of Kern, State of California, according to the Official Plat thereof. Parcel 39: (APN: 444-100-04) The West half, the West half of the Northeast quarter, the Southeast quarter of the Northeast quarter, and the Southeast quarter, of Section 16, Township 30 South, Range 36 East, Mount Diablo Base and Meridian, in the un-incorporated area, County of Kern, State of California, according to the Official Plat thereof. Parcel 40: (APN: 444-100-02) Section-17, T-o-w-nship-30 SouthRange-36 East, Mount Diablo Base and -Meridian, in the-u - incorporated area, County of Kern, State of California, according to the Official Plat thereof. Parcel 41: (APN 444-100-07) Section 21, Township 30 South, Range 36 East, Mount Diablo Base and Meridian, in the un- incorporated area, County of Kern, State of California, according to the Official Plat thereof. Parcel 42: (APN: 444-100-10 & 11) Fractional Section 19, Township 30 South, Range 36 East, Mount Diablo Base and Meridian, in the un-incorporated area, County of Kern, State of California, according to the Official Plat thereof. Parcel 43: (APN: 444-090-07) Section 23, Township 30 South, Range 36 East, Mount Diablo Base and Meridian, in the un- incorporated area, County of Kern, State of California, according to the Official Plat thereof. Parcel 44: (APN: 444-110-03) Section 25, Township 30 South, Range 36 East, Mount Diablo Base and Meridian, in the un- incorporated area, County of Kern, State of California, according to the Official Plat thereof. Except a strip of land 200 feet wide granted to the City of Los Angeles by the Southern Pacific Land Company by Deed recorded March 13, 1920 in Book 346, Page(s) 421 of Deeds. Parcel 45: (APN: 444-110-08) Section 35, Township 30 South, Range 36 East, Mount Diablo Base and Meridian, in the un- incorporated area, County of Kem, State of California, according to the Official Plat thereof. Exhibit A-7 LA\1930088.2 Parcel 46: (APN: 444-110-06) The North half of the Northwest quarter, the Southwest quarter of the Northwest quarter, the West half of the Southwest quarter, the Southeast quarter of the Southwest quarter, and the East half of Section 36, Township 30 South, Range 36 East, Mount Diablo Base and Meridian, in the un-incorporated area, County of Kern, State of California, according to the Official Plat thereof. Parcel 47: (APN: 443-030-16) Section 25, Township 30 South, Range 34 East, Mount Diablo Base and Meridian, in the un- incorporated area, County of Kern, State of California, according to the Official Plat thereof. Parcel 48: (APN: 444-010-08) Section 12, Township 30 South, Ran2e 35 East. Mount Diablo Base and Meridi incorporated area, County of Kern, State of California, according to the Official Plat thereof. Parcel 49: (APN: 444-040-18 & 19) Fractional Section 19, Township 30 South, Range 35 East, Mount Diablo Base and Meridian, in the un-incorporated area, County of Kern, State of California, according to the Official Plat thereof. Parcel 50: (APN: 444-050-04) Section 25, Township 30 South, Range 35 East, Mount Diablo Base and Meridian, in the un- incorporated area, County of Kern, State of California, according to the Official Plat thereof. Parcel 51: (APN: 444-050-01) Section 27, Township 30 South, Range 35 East, Mount Diablo Base and Meridian, in the un- incorporated area, County of Kern, State of California, according to the Official Plat thereof. Parcel 52: (APN: 444-060-03) Section 29, Township 30 South, Range 35 East, Mount Diablo Base and Meridian, in the un- incorporated area, County of Kern, State of California, according to the Official Plat thereof. Parcel 53: (APN: 444-060-08) Section 33, Township 30 South, Range 35 East, Mount Diablo Base and Meridian, in the un- incorporated area, County of Kern, State of California, according to the Official Plat thereof. Exhibit A-8 LA\1930088.2 Parcel 54: (APN: 444-120-06) The Southwest quarter of Section 28, Township 30 South, Range 36 East, Mount Diablo Base and Meridian, in the un-incorporated area, County of Kern, State of California, according to the Official Plat thereof. Parcel 55: (APN: 444-120-02) Section 29, Township 30 South, Range 36 East, Mount Diablo Base and Meridian, in the un- incorporated area, County of Kern, State of California, according to the Official Plat thereof. Parcel 56: (APN: 444-010-06) Fractional Section 1, Township 30 South, Range 35 East, Mount Diablo Base and Meridian, in e un-incorpor area, ounly -of Ke—m, State of C ornia, according- "ohe OfficiaYP at thereof. I Exhibit A-9 LA\1930088.2 Recording Requested by City of Vernon and when recorded, mail to: EXHIBIT B SPACE ABOVE FOR RECORDER'S USE Recording Fee: Exempt pursuant to MEMORANDUM OF GRAZING LEASE THIS LEASE HEREIN IS FOR A PERIOD LESS THAN 99 YEARS. A.P.N. The City of Vernon, a municipal corporation and a chartered city duly organized and existing under and by virtue of the Constitution and laws of the State of California ("Landlord"), hereby leases to , a ("Tenant'), that certain real property located in Kern County, California, and more particularly described on Appendix "A" attached hereto (the "Property'). 1. The terms of the tenancy are set forth in a certain unrecorded Lease between Landlord and Tenant dated October 15, 2008 (the "Lease"), the provisions of which Lease are incorporated herein by this reference, and covering the Property. Unless otherwise defined herein, any term with initial capitalization herein shall have the definition set forth in the Lease. 2. The Initial Term of this Lease commences on October 17, 2008 and expires one (1) year thereafter. The term of the Lease shall continue on a year-to-year basis unless cancelled by Exhibit B-1 LA\1930088.2 either Party upon notice given to the other Party not less than sixty (60) days prior to the expiration of the then current term. The Property is leased for the purpose of horse and cattle grazing and for no other purpose. Tenant shall not use or knowingly permit any part of the Property to be used for any unlawful purpose. Tenant shall be solely responsible for the supervision, feeding, watering, veterinary and other care of Tenant's livestock and for the acts of Tenant's livestock. Grazing may only take place on such portions of the Property and with such intensity of livestock as Landlord -may -reasonably permit-from-timeAoAime-such-that-the-grazing-w-ilI not interfere-w-ith— any activity performed by Landlord on the Property. 4. Landlord has reserved unto itself, in its sole discretion, the right to terminate the Lease upon thirty (30) days written notice to Tenant. Landlord shall not be liable to Tenant for any damages in connection with Landlord's exercise of its right of termination under the Lease. 5. Landlord and Tenant have further agreed that Tenant shall not, without the prior written consent of Landlord, assign, mortgage, pledge, encumber, or permit any lien to attach to, or otherwise transfer, this Lease or any interest hereunder, permit any assignment, or other transfer of this Lease or any interest hereunder by operation of law, sublet the Property or any part thereof, or enter into any license or concession agreements or otherwise permit the occupancy or use of the Property or any part thereof by any persons other than Tenant.. 6. This instrument is executed solely for recording purposes and nothing herein shall be deemed or construed to modify or vary the terms of the Lease or the easements granted therein. In the event of any conflict between the Lease and this memorandum, the terms and conditions of the Lease shall prevail. Exhibit B-2 LA\1930088.2 IN WITNESS WHEREOF, the undersigned have executed this Memorandum of Lease as of the — day of _, 2009. TENANT: ReNu RESOURCES, LLC, a Delaware limited liability company By: — Name: 1p:+]-. LANDLORD: CITY OF VERNON, a California chartered city By: — Name: Title: LA\1930088.2 ATTEST: By: — Name: Title: Exhibit B-3 State of California County of On 200_, before me, personally appeared I who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of,California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) State of California County of On 200_, before me, personally appeared I who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument, I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature Exhibit B-4 LA\1930088.2 (Seal) State of California County of On 200_, before me, personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. ignature Exhibit B-5 LA\1930088.2 (Seal) APPENDIX "A" TO MEMORANDUM OF GRAZING LEASE Legal Description of the Property [See Exhibit A to Lease.] LA\1930088.2 OFFICE OF THE CITY ATTORNEY Jeff A. Harrison, City Attorney 4305 Santa Fe Avenue, Vernon, California 90058 Telephone (323) 583-8811 Fax (323) 826-1438 March 31, 2009 COPY Ms. L. Lloys Frates Renewable Resources Group Holding Company, Inc. 5700 Wilshire Blvd., Suite 330 Los Angeles, CA 90036 Re: Lease Agreement, Memorandum of Grazing Lease and Property Management Agreement Dear Lloys:, Enclosed please find the fully executed Lease, Memorandum of Grazing Lease and Property Management Agreement with ReNu. If you have any questions, please contact me.. Sincerel J A arrison * t , i C y At rney JH:jl Enclosure (Originals) cc: Ms. Nelly Giron, City Clerk (w/Originals) (Resolution Nos. 9875 and 9882) Confidential LEASE AGREEMENT THIS LEASE (this "Lease") is entered into as of March _UV , 2009 (the "Execution Date"), by and between the CITY OF VERNON, a California chartered city ("Landlord"), and RENU RESOURCES, LLC, a Delaware limited liability company. ("Tenant"). Landlord and Tenant are referred to herein sometimes individually as a "PAAy" and collectively as the "Parties". RE' CITALS A. Tenant sold to Landlord property in Kern County, California consisting of approximately 29,722.44 acres and which is legally described in Exhibit A attached hereto (the "Properly") on October 17, 2008 (the "Closing Date"). .B. Tenant-d�asireg-to--le-a-se—th-e Proper romLand1brd7fbr the purpose of -horse and cattle grazing, and Landlord has agreed to Lease the Property to Tenant on the terms and conditions set forth herein C. Tenant is entering into this Lease for the purpose of horse and cattle grazing as it has been used in the past and for no other purpose and shall maintain the Property consistent with accepted grazing practices. Tenant's use of the land is subject to appropriate environmental review and compliance with or exemption from all applicable laws, including the California Environmental Quality Act. AGREEMENT NOW, THEREFORE, in consideration of , the mutual promises and agreements hereinafter contained, and for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows: I . Leased Premises. Landlord hereby leases the Property to Tenant and Tenant leases the Property from Landlord, upon the terms and conditions set forth in this Lease. 2. Term. The term of this Lease shall commence as of the Execution Date and shall continue until midnight on October 16,.2009 (the "Expiration Date"), unless earlier terminated in accordance with the terms of this Lease. Following the Expiration Date, the term of this Lease shall continue on a year-to-year basis unless cancelled by either Party upon notice given to the other Party not less than sixty (60) days prior to the expiration of the then current term. Landlord acknowledges that Tenant has been using the land for grazing purposes as set forth herein since the Closing Date. 3. Termination. In its sole and absolute discretion, Landlord may terminate this Lease at any time upon ninety (90) days written notice to Tenant. Landlord shall not be held liable to Tenant in connection with Landlord's exercise of its right of termination under this Lease. LA\1930088.3 4, Rent. This Lease is granted in consideration of, among other things, Tenant's agreement to sell the Property to Landlord and Tenant's agreement to maintain the existing grazing infrastructure on the Property. Accordingly, Tenant shall be entitled to lease the Property without the obligation to pay rent or similar fees to Landlord. 5. Use of Premises. The Property is leased for the purpose of horse ' and cattle grazing and for no other purpose. The number of cattle and horses grazed under this Lease and any subleases will not exceed six thousand (6000) Animal Unit Months at any time. As used herein, any mature cow, bull, steer or horse shall constitute one Animal Unit and any weaned steer/bull calf or heifer calf shall constitute one-half (1/2) of an Animal Unit. Suckling calves are not included in Animal Units. Tenant shall use good ranching practices utilized in the area, in compliance with all existing and future laws, ordinances and regulations applicable to Tenant's use of the Property. Tenant agrees that it shall not use or permit the use, storage or dumping of waste, sewage or sludge or other substance on the Property which has any potential of contaminating the soil or groundwater underlying the Property, except for materials or chemicals currently utilized consistent with good ranching practices in the area or waste generated by the cattle or horses. Tenant shall not use or knowingly permit any part of the Property to be used for any unlawful purpose. Tenant shall be solely responsible for the supervision, feeding, watering, veterinary and other care of Tenant's livestock and: for the acts of Tenant's livestock. Notwithstanding the definition of "Property," grazing may only take place on such portions of the Property and with such intensity of livestock as Landlord may reasonably permit from time to time such that the grazing will not interfere with any activity performed by Landlord on the Property, including but not limited to the development of wind projects. 6. Repairs and Maintenance. Tenant, at Tenant's expense, shall keep and maintain the portions of the Property associatedwith grazing practices, and every part thereof, in an order, condition and repair that is at least as good as at the commencement of the term of this Lease. Without limiting the generality of the foregoing, Tenant shall be responsible for all routine operating, maintenance and repair costs in connection with Tenant's use of the Property. Tenant shall keep the buildings, fences, corrals, pumps, and motors associated with grazing practices� (collectively, the "IMprovements") installed on the Property in an order and repair that is at least as good as at the commencement of the term of this Lease. Tenant shall not allow any abandoned vehicles previously used by Tenant or its invitees, agents, contractors or sublessees to remain on the Property. Tenant shall maintain the Property in accordance with good ranching practices, shall commit no act or suffer or permit any of Tenant's invitees, agents, contractors or sublessees to commit any act that allows for the escape of water (except through natural streams and waterways) from the Property and shall not damage or suffer or permit any of Tenant's invitees, -agents, contractors or sublessees to damage any water ditch that runs through the Pr operty. Should any of the Improvements or any part of the Property, related to Tenant's operation, be in need of repair or replacing, Tenant shall repair or replace the same at Tenant's sole expense. If any part is replaced, the new part shall be of the same or better quality, size and type, and shall be maintained and left in good condition. . 7. Landlord's Rialit to Information. Tenant shall respond to all reasonable requests for information from Landlord regarding its usage of the land. Tenant shall promptly -2- LA\1930088.3 notify Landlord upon T ' enant's awareness of any event that could reasonably be expected to have an adverse impact upon Landlord's interest in the Property. 8. Properly Taxes. (i) Tenant shall pay, prior to delinquency, all personal property taxes or assessments levied upon Tenant's personal property situated on or about the Property, and (ii) Landlord shall pay all real property taxes or assessments levied in connection with the Property. Tenant shall take no action in its operations or construct any improvements which will result in an increase in Landlord's liability for real property taxes. 9. Insurance. At all times during the Term hereof and at Tenant's sole cost, Tenant shall maintain in full force and effect, comprehensive general liability insurance with an aggregate liability amount not less than $2,000,000 combined single limit, and (iii) any other insurance required applicable by law during the Term in connection with Tenant's use of the ------Property.-Landlord shall an additional insured pursuant to such general liability policies and the insurance required by this Section shall be primary as respects Landlord and not contributory with any other available insurance, shall contain such endorsements as are reasonably acceptable to Landlord, and shall require not less than thirty (30) days prior notice to Landlord in the event of cancellation or modification. All insurance required to be carried by Tenant hereunder ' shall be issued by insurance companies qualified to do business in the State of California and rated A:VllI or better in the most current issue of "Best's Key Rating Guide." Upon execution of this Lease, and upon request of Landlord, Tenant shall provide Landlord with a certificate evidencing such insurance and compliance with the terms of this Section, including the naming of Landlord as an additional insured. 10. Hazardous Substances. Except in compliance with applicable laws and regulations, Tenant shall not use, store or knowingly permit hazardous or toxic substances, materials or waste, or similar substances, as defined under applicable federal and state laws and regulations ("Hazardous Substances"). Tenant shall comply with all applicable federal, state and local environmental protection, occupational, health and safety and similar laws, ordinances, restrictions, licenses and regulations. 11. Right of Entry. Landlord or its agents, servants employees or representatives may enter the Property at any reasonable time (i) for the purpose of ascertaining compliance by Tenant with the requirements of this Lease, (ii) in connection with Landlord's development, leasing or sale of the Property, or (iii) for the purpose of doing other lawful acts that may be necessary to protect Landlord's interest in the Property. Notwithstanding the above, Landlord shall not materially interfere with Tenant's ranching operations. 12. Alterations and Mechanics' Liens. a. Tenant shall not make or permit any new alterations or improvements (excluding fencing and installing necessary irrigation systems) to the Property having a value in excess of $10,000 without the prior written consent of Landlord,, which consent shall not be unreasonably withheld. The foregoing notwithstanding, Tenant may make necessary repairs to the Property and the improvements thereon as needed without Landlord's consent. Any alterations or improvements placed upon the Property shall be constructed in a good and -3- LA\1930088.3 workmanlike manner and shall be in full compliance with any applicable laws, ordinances and regulations, Upon termination or expiration of this Lease, any improvements and alterations hot promptly removed by Tenant (other than trade fixtures) shall be the property of Landlord, and no reimbursement to Tenant shall.be required. b. Any alterations or improvements placed upon the Property by Tenant shall be constructed at Tenant's sole cost and expense in the absence of Landlord's prior agreement to the contrary. Tenant shall keep the Property free and clear of any and all liens arising out of any work performed or materials furnished at the request of Tenant, or obligations incurred by Tenant and at termination of this Lease restore the Property to the condition it was in at the commencement of this Lease. C. Notwithstanding any other provision of this, Lease, Landlord acknowledges that the following equipment may be removed from the Property by Tenant upon termination of this Lease: 13. Liens, Taxes, Assessments, Utilijy Charges, etc. Tenant shall not permit to be enforced against the Property or any part thereof, any liens arising from Tenant's use of the Property or from Tenant's failure to fully comply with the obligations set forth in this Lease, and Tenant shall discharge or post bond against all such liens before any action is brought to enforce the same. All things in this Lease provided to be done by Tenant shall be done by Tenant at its own cost and expense, except as may be herein otherwise expressly provided. Tenant shall pay for all fuel, power, electricity, sewer, water and/or telephone service used by it on the Property, including demand charges, and any other utility service or services of any kind. or character whatsoever that Tenant may require. Tenant shall also pay for all costs and charges of any kind or character whatsoever that may be necessary for the full and proper grazing of the.Property and the conducting of its grazing operations, including, but not limited to, feed not provided by the Property, supplies and materials of all kinds, costs of grazing, fertilizing, spraying, or other disease control regarding grazing on the Property pursuant to this Lease. If Tenant uses any utility charged to Landlord, Tenant shall promptly reimburse Landlord therefor. 14. Default and Remedies. a. Any failure by Tenant to cure any breach of this Lease within thirty (30) days after receipt of written notice thereof from Landlord shall be deemed a default under this Lease. b. Upon any default by Tenant under the terms of this Lease, Landlord shall have the right to exercise any and all remedies available at law or in equity including, without limitation, the right to terminate Tenant's right to possession of the Property by any lawful, means, in which case, this Lease shall terminate and Landlord shall be entitled to recover from Tenant all damages incurred by Landlord by reason of Tenant's default. C. Notwithstanding the foregoing, in no event shall either Party be liable for consequential damages for any reason. -4- LA\1930088.3 15, Notices. All notices and other communications, made pursuant hereto shall be in writing and shall be deemed properly delivered, given or served when (i) personally delivered, or (ii) mailed by certified or registered mail, postage prepaid, return receipt requested and addressed to the other party at the address stated herein below, or at an address the party may hereafter designate in writing: If to Tenant: ReNuResources, LLC c/o CIM Group, Inc. 6922 Hollywood Blvd., Suite 900 Los Angeles, California 90028 Attention: Jennifer Gandin Facsimile No: (310) 496-2887 with a CODV to: Operating'Manager Renewable Resources Group Holding Company, Inc. 5700 Wilshire Boulevard, Suite 330 Los Angeles, California Attention: L. Lloys Frates Facsimile No: (323) 930-9114 with a copy to: Fragner, Seifert, Pace and Winograd LLP 300 South Grand, 14 1h Floor Los Angeles, Ca 90071 Attention: Terrence R. Pace, Esp. Tel: (213) 687-2321 FAX: (213) 232-7112 If to Landlord: The City of Vernon 4305 Santa Fe Avenue Vernon, California 90058 Attention: Eric T. Fresch, City Administrator Facsimile No.: (323) 587-7596 with a copy to: The City of Vernon 4305 Santa Fe Avenue Vernon, California 90058 Attention: Jeff Harrison, Esq., City Attorney Facsimile No.: (323) 587-7596 16. Attorneys' Fees. In the event of any litigation between Landlord and Tenant to interpret or enforce any of the provisions of the Lease or any right of either party hereto, the -5- LA\1930088.3 unsuccessful party to . such litigation agrees to pay to the successful party all costs and expenses including, but not limited to, reasonable attorneys' fees and expert witness fees, incurred therein by the successfut party, all of which shall be included in and as a part of j udgment rendered in such litigation. 17. Waivers. A waiver by any party of any of the terms and conditions of this Lease in anyone instance shall not be deemed or construed to be a waiver of such term or condition for the future, or of any subsequent breach thereof, nor shall it be deemed a waiver of performance of any other obligation hereunder. No waiver by either party shall be effective unless contained in a writing signed by. the waiving party. 18. Assignment and Sublqjli�g. Tenant shall not, without the prior written consent of Landlord, assign, mortgage, pledge, encumber, or permit any lien to attach to, or otherwise transfer this Lease or any interest hereunder,permit any assigninent, or other transfer of this Lease or any interest hereunder by operation of law, sublet the Property or any part thereof, or enter into any license or concession agreements or otherwise permit the occupancy or use of the Property or any part thereof by any persons other than Tenant; provided, that Tenant may, upon written notice to Landlord, grant a license to third parties to transport grazing herds over the Property to reach parcels that are enclosed by the Property. 19. Condemnation. In the event that during the Term of this Lease, there is a total or partial taking of the Property by a public authority under the power of eminent domain, then the leasehold estate of Tenant in the Property shall cease and terminate as to that portion of the Property so taken, which termination shall be effective as of the date actual physical possession of said portion of the Property is taken. All compensation and damages awarded for the taking of all or any portion of the Property shall, except as otherwise herein provided, belong to and be the sole property of Landlord, provided however, that Tenant shall be entitled to a pursue a claim against the condemning authority for expenses of relocating the grazing operation, provided that Tenant's claim does not reduce the compensation or damages payable to Landlord. 20. Governinia L . This Lease shall be governed by and construed in accordance with the laws of the State of California. 21. Compliance with Laws. Tenant's acknowledges and agrees that its use of the land is subject to appropriate environmental review and compliance with or exemption from all applicable laws, including the California Environmental Quality Act. 22. Cgptions, Pronouns. Any titles or captions contained in this Lease are for convenience only and shall not be deemed part of the context of this Lease. All pronouns and any variations thereof shall be deemed to refer to the masculine, feminine, neuter, singular or plural. as to the identification of the person or person, firm or firms, corporation or corporations may require. 23. Entire Agreeme . This Lease contains the entire agreement relating to the rights granted and obligations assumed in this instrument and supersedes any and all other agreements, contracts or understandings relating to Tenant's use of the Property and/or any other portion of -6- LA\1930088.3 Onyx Ranch. Any oral representations or modifications concerning this instrument shall be of no force or effect unless contained in a subsequent written modification signed by the party to be charged. 24. No Broker. Each of the parties hereto represents that it has not used or engaged the services of any real estate broker in the negotiation of this Lease and that no real estate commissions are due upon execution or performance hereof. Each party hereto shall indemnify, defend and hold harmless the other party from any claims for real estate commissions resulting from the indemnifying party's breach of the representation set forth in this paragraph. 25. Recitals. The Recitals set forth above are incorporated herein by reference as operative provisions of this Lease. 26. Time of Essence. Time is of the essence with regard to the provisions of this Lease. . 26. Consent. In the event that Landlord receives notice that Tenant is requesting Landlord's consent pursuant to this Agreement, Landlord shall use reasonable efforts to respond promptly to such request, but in no event later than thirty (30) days after Landlord receives notice of such request for consent, and shall not unreasonably withhold its consent. 27. Tenant's Indeninily. Except to the extent arising from Landlord's willful misconduct or gross negligence, Tenant hereby indeninifies Landlord, and shall forever save and hold Landlord harmless, from and against all obligations, liens, claims, liabilities, costs (including, but not limited, to all attorneys' and other professional fees and expenses), actions and causes of action, threatened or actual, which Landlord may suffer or incur arising out of or in connection with the use or occupancy of the Property by Tenant or Tenant's invitees, licensees, agents, contractors or employees or Tenant's actions and omissions relating to this Lease, including without limitation the use by Tenant of the Property, the transportation over the Property of a grazing herd by a licensee of Tenant, the conduct of Tenant's business, any activity, work or things done, permitted or suffered by Tenant in or about the Property, Tenant's failure to comply with any applicable law, or any negligence or willful misconduct of Tenant or any of its invitees, agents, contractors or employees. -7- LA\1930088.3 IN WITNESS WHEREOF, this Lease has been executed by the parties as of the date first written above. TENANT: ReNu RESOURCES, LLC, a Delaware limited liability company By: CIM/Onyx Ranch Manager, LLC, a Delaware Limited liability company, its Managing Member By: Renewable Resource Group Holding Company, Inc., its Operating Manager By: Name: D. Cole Frates Title: LANDLORD: CITY OF VERNON, ATTEST: a California chartered city By: By: '&am�,--Leonis C. Malbul; Title: Mayor Name: Sharon Duckworth Title: Acting Deputy City Clerk APPROVED A a '*Ason, City Attorney "I. LA\1930088.3 EXHIBIT A EXHIBIT A PROPERTY DESCRIPTION Parcel 1: (APN: 153-120-10 & 11) The East half, Lots I and 2 of the Northwest quarter, and Lots I and 2 of the Southwest quarter of Fractional Section 3 1, Township 29 South, Range 35 East, Mount Diablo Base and Meridian, in the un-incorporated area, County of Kern, State of California, according to the Official Plat thereof. Parcel 2; (APN: 153-110-04) Secti-o—n36, TownsW29 So , 3 5 East, M—ouffl)iabI67��Mer an, n t e un- incorporated. area, County of Kern, State of California, according to the Official Plat thereof. Except all oil, gas, oil shale, coal, phosphate, sodium, gold, silver and all other mineral deposits contained in said land, and further reserving to the State of California and persons authorized by the State, the right to drill for and extract such deposits of oil and gas, or gas, and to prospect for, mine and remove such deposits of other minerals from said land and to occupy and use so much of the surface of said land as may be required therefore, upon compliance with the conditions and subject to the provisions and limitations of Chapter 5, Part 1, Division 6 of the Public Resources Code, as reserved in Patent recorded June 10, 1958 in Book 2962, Page(s) 503 of Official Records. Parcel 3: (APN: 153-110-05) Section 35, Township 29 South, Range 35 East, Mount Diablo Base and Meridian, in the un- incorporated area, County of Kern, State of California, according to the Official Plat thereof. Parcel 4: (APN: 153-180-09) The East half of Fractional Section 3 1, Township 29 South, Range 3 6 East, Mount Diablo Base and Meridian, in the un-incorporated area, County of Kern, State of California, according to the Official Plat thereof. Parcel 5: (APN: 153-180-10) The West half of Fractional Section 3 1, Township 29 South, Range 36 East, Mount Diablo Base and Meridian, in the un-incorporated area, County of Kern, State of California, according to the Official Plat thereof. Exhibit A-1 LA\1930088.3 Parcel 6: (APN: 181-190-14) The East half of Fractional Section 3 1, Township 30 South, Range 3 8 East, Mount Diablo Base and Meridian, in the un-incorporated area, County of Kern, State of California, according to the Official Plat thereof. Parcel 7: (APN: 181-190-15) ,The West half of Fractional Section 3 1, Township 3 0 South, Range 3 7 East, Mount Diablo Base and Meridian, in the un-incorporated area, County of Kern, State of California, according to the Official Plat thereof. Parcel 8: (APN: 181-190-16) Fractional Section 36, Township 30 South, Range 36 1/2East, Mount Diablo Base and Meridian, in the un-incorporated area, County of Kern, State of California, according to the Official Plat thereof. Except all oil, gas, oil shale, coal, phosphate, sodium, gold, silver and all other mineral deposits contained in said land, and further reserving to the State of California and persons authorized by the State, the right to drill for and extract such deposits of oil and gas, or gas, and to prospect for, mine and remove such deposits of other minerals from said land and to occupy and use so much of the surface of said land as may be required therefor, upon compliance with the conditions and subject to the provisions and limitations of Chapter 5, Part 1, Division 6 of the Public Resources Code, as reserved in Patent recorded July 29, 1959 in Book 3170, Page(s) 179 of Official Records. Parcel 9: (APN: 442-010-07) Section 11, Township 30 South, Range 34 East, Mount Diablo Base and Meridian, in the un- incorporated area, County of Kern, State of California, according to the Official Plat thereof. Except an undivided 1/2interest in all oil, gas and hydrocarbon substances, within or underlying said land, as granted to J.C. Walser, also known as John Caswell Walser and Blanche Walser, husband and wife as joint tenants, in Deed recorded July 9, 1937 in Book 73 1, Page(s) 490 of Official Records. Parcel 10: (APN: 442-010-04) Fractional Section 1, Township 30 South, Range 34 East, Mount Diablo Base and Meridian, in the un-incorporated area, County of Kern, State of California, according to the Official Plat thereof. Exhibit A-2 LA\1930088.3 Parcel It: (APN: 442-010-02) The South half of the South half of Fractional Section 2, Township 30 South, Range 34 East, Mount Diablo Base and Meridian, in the un-incorporated area, County of Kern, State of California, according to the Official Plat thereof. Except an undivided 1/2interest in all oil, gas and hydrocarbon substances, within or underlying said land, as granted to J.C. Walser, also known as John Caswell Walser and Blanche Walser, husband and wife as joint tenants, in Deed recorded July 9, 193 7 in Book 73 1, Page(s) 490 of Official Records. Parcel 12: (APN: 442-030-05) Section 13, Townshi 30 South, Range 34 East, Mount Diablo Base and Meridian, in the un- incorporated area, County of Kern, State of California, according to the Official Plat thereof. Parcel 13: (APN: 442-030-03) Section 14, Township 30 South, Range 34 East, Mount Diablo Base and Meridian, in the un- incorporated area, County of Kern, State of California, according to the Official Plat thereof. Except all the coal and other minerals in the land so patented together with the right to prospect . e for, mine and remove the same pursuant to the provisions and limitations of the Act of December 29, 1916 (Stat. 862) as reserved by the United States of America in the Patent recorded December 24, 1923 in Book 22, Page(s) 19 of Official Records. Parcel 14: (APN: 443-010-02) Section 23, Township 30 South, Range 34 East, Mount Diablo Base and Meridian, in the un- incorporated area, County of Kern, State of California, according to the Official Plat thereof. Parcel 15: (APN: 444-010-01) Fractional Section 3, Township 30 South, Range 35 East, Mount Diablo Base and Meridian, in the un-incorporated area, County of Kern, State of California, according to the Official Plat thereof. Parcel 16: (APN: 444-010-04) Lots I and 2 of the Northeast quarter, the South half of the Northeast quarter; and the Southeast quarter, of Fractional Section 2, Township 3 0 South, Range 3 5 East, Mount Diablo Base and Meridian, in the un-incorporated area, County of Kern, State of California, according to the Official Plat thereof. Exhibit A-3 LA\1930088.3 Parcel 17: (APN: 444-020-16) Fractional Section 7, Township 30 South, Range 35 East, Mount Diablo Base and Meridian, in the un-incorporated area, County of Kern, State of California, according to the Official Plat thereof. Parcel 18: (APN: 444-020-14) The North half of the North half of Section 8, Township 30 South, Range 35 East, Mount Diablo Base and Meridian, in the un-incorporated area, County of Kern, State of California, according to the Official Plat thereof. Except and reserving to the United States, pursuant to the provisions of the Act of August 1, 1946 (60 Stat. 755), all uranium, thoriurn or any other materials which is or may be determined to be peculiarly essential to the production of fissionable materials, whether or not of commercial value, together with the right of the United States through it's authorized agents or representatives at any time to enter upon the lands and prospect for, mine and remove the same as reserved in the Patent from the United States of America, recorded April 27, 1949 in Book 1612, Page(s) 00 of Official Records. Parcel 19: (APN: 444-020-03) Fractional Section 5, Township 30 South, Range 35 East, Mount Diablo Base and Meridian, in the un-incorporated area, County of Kern, State of California, according to the Official Plat thereof. Parcel 20: (APN: 444-020-09) The West half of the Northeast quarter; the Southwest quarter of the Southeast quarter, and the West half of Section 9, Township 30 South, Range 35 East, Mount Diablo Base and Meridian, in the un-incorporated area, County of Kern, State of California, according to the Official Plat thereof. Parcel 21: (APN: 444-010-13) The North half of the Northeast quarter, the Southwest quarter of the Northeast quarter, the Southeast quarter of the Northwest quarter, the West half of the Southeast quarter, and the East half of the Southwest quarter, of Section 10, Township 30 South, Range 35 East, Mount Diablo Base and Meridian, in the un-incorporated area, County of Kern, State of California, according to the Official Plat thereof. Exhibit A-4 LA\1930088.3 Parcel 22: (APN: 444-030-06) The East half of the Southeast quarter, the Southwest quarter of the Southeast quarter of Section 14, Township 30 South, Range 35 East, Mount Diablo Base and Meridian, in the un-incorporated area, County of Kern, State of California, according to the Official Plat thereof. Parcel 23: (APN: 444-010-10) Section 11, Township 30 South, Range 35 East, Mount Diablo Base and Meridian, in the un- incorporated area, County of Kern, State of California, according to the Official Plat thereof. Parcel 24: (APN: 444-030-01) Section 15, Township 30 SouthRang6 35 East, Mount Diablo Base and Meridian, in the un- incorporated area, County of Kern, State of California, according to the Official Plat thereof. Parcel 25: (APN: 444-030-08) Section 13, Township 30 South, Range 35 East, Mount Diablo Base and Meridian, in the un- incorporated Area County of Kern, State of California, according to the Official Plat thereof. Parcel 26: (APN: 444-040-02) Section 17, Township 30 South, Range 35 East, Mount Diablo Base and Meridian, in the un ' - incorporated area, County of Kern, State of California, according to the Official Plat thereof. Parcel 27: (APN: 444-040-09, 11 and 13) The West half of the Northeast quarter, the East half of the Northeast quarter, the North half of the Southeast quarter, the South half of the Southeast quarter, and the Southwest quarter of Section 16, Township 30 South, Range 35 East, Mount Diablo Base and Meridian, in the un- incorporated area, County of Kern, State of California, according to the Official Plat thereof. Parcel 28: (APN: 444-040-15) Section 21, Township 30 South, Range 35 East, Mount Diablo Base and Meridian, in the un- incorporated area, County of Kern, State of California, according. to the Official Plat thereof. Parcel 29: (APN: 444-030-11) Section 23, Township 30 So-uth, Range 35 East, Mount Diablo Base and Meridian, in the un- incorporated area, County of Kern, State of California, according to the Official Plat thereof. Exhibit A-5 LA\1930088.3 Parcel 30: (APN: 444-060-05) The North half of Section 28, Township 30 South, Range 35 East, Mount Diablo Base and Meridian, in the un-incorporated area, County of Kern, State of California, according to the Official Plat thereof. Parcel 31: (APN: 444-070-01 & 02) Fractional Section 3, Township 30 South, Range 36 East, Mount Diablo Base and Meridian� in the un-incorporated area, County of Kern, State of California, according to the Official Plat thereof. Parcel 32: (APN: 444-080-05) The North half of Fractional Section 5,'Township 30 South, Range 36 East, Mount Diablo Base and Meridian, in the un-incorporated area, County of Kern, State of California, according to the Official Plat thereof. Parcel 33: (APN: 444-080-06) The South half of Fractional Section 5, Township 30 South, Range 36 East, Mount Diablo Base and Meridian, in the un-incorporated area, County of Kern, State of California, according to the Official Plat thereof. Parcel 34: (APN: 444-080-11) The West half, and the Southwest quarter of the Southeast quarter of Section 8, Township 30 South, Range 36 East, Mount Diablo Base and Meridian, in the un-incorporated area, County of Kern, State of California, according to the Official Plat thereof. Parcel 35: (APN: 444-080-09) Section 9, Township 30 South, Range 36 East, Mount Diablo Base and Meridian, in the un- incorporated area, County of Kern, State of California, according to the Official Plat thereof. Parcel 36: (APN: 444-080-01 & 02) Fractional Section 6, Township 30 South, Range 36 East, Mount Diablo Base and Meridian, in the un-incorporated area, County of Kern, State of California, according to the Official Plat thereof. Parcel 37: (APN: 444-080-13 & 15) Fractional Section 7, Township 30 South, Range 36 East, Mount Diablo Base and Meridian, in the un-incorporated area, County of Kern, State of California, according to the Official Plat thereof. Exhibit A-6 LA\1930088.3 Parcel 38: (APN: 444-090-01) Section 15, Township 30 South, Range 36 East, Mount Diablo Base and Meridian, in the un- incorporated area, County of Kern, State of California, according to the Official Plat thereof. Parcel 39: (APN: 444-100-04) The West half, the West half of the Northeast quarter, the Southeast quarter of the Northeast quarter, and the Southeast quarter, of Section 16, Township 30 South, Range 36 East, Mount Diablo Base and Meridian, in the un-incorporated area, County of Kern, State of California, according to the Official Plat thereof. Parcel 40: (APN: 444-100-02) Section 17,Township 30 South, Range 36 East, Mount Diablo Base and Meridian, in the un- incorporated area, County of Kern, State of California, according to the Official Plat thereof. Parcel 41: (APN 444-100-07) S ection 2 1, Township 3 0 S outh, Range 3 6 East, Mount Diablo B ase and Meridian, in the un- incorporated area, County of Kern, State of California, according to the Official Plat thereof. Parcel 42: (APN: 444-100-10 & 11) Fractional Section 19, Township 30 South, Range 36 East, Mount Diablo Base and Meridian, in the un-incorporated area, County of Kern, State of California, according to the Official Plat thereof. Parcel 43: (APN: 444-090-07) Section 23, Township 30 South, Range 36 East, Mount Diablo Base and Meridian, in the un- incorporated area, County of Kern, State of California, according to the Official Plat thereof. Parcel 44: (APN: 444-110-03) Section 25, Township 30 South, Range 36 East, Mount Diablo Base and Meridian, in the un- incorporated area, County of Kern, State of California, according to the Official Plat thereof. Except a strip of land 200 feet wide granted to the City of Los Angeles by the Southern Pacific Land Company by Deed recorded March 13, 1920 in Book 346, Page(s) 421 of Deeds. Parcel 45: (APN: 444-110-08) Section 35, Township 30 South, Range 36 East, Mount Diablo Base and Meridian, in the un- incorporated area, County of Kern, State of California, accordingto- the Official Plat thereof. Exhibit A-7 LA\1930088.3 Parcel 46: (APN: 444-110-06) The North half of the Northwest quarter, the Southwest quarter of the Northwest quarter, the West half of the Southwest quarter, the Southeast quarter of the Southwest quarter, -and the East half of Section 36, Township 30 South, Range 36 East, Mount Diablo Base and Meridian, in the un-incorporated area, County of Kern, State of California, according to the Official Plat thereof. Parcel 47: (APN: 443-030-16) Section 25, Township 30 South, Range 34 East, Mount Diablo Base and Meridian, in the un- incorporated area, County of Kern, State of California, according to the Official Plat thereof. Parcel 48: (APN: 444-010-08) Section 12, Township 30 South, Range 35 East, Mount Diablo Base and Meridian, in the un-, incorporated area, County of Kern, State of California, according to the Official Plat thereof. Parcel 49: (APN: 444-040-18 & 19) Fractional Section 19, Township 30 South, Range 35 East, Mount Diablo Base and Meridian, in the un-incorporated area, County of Kern, State of California, according to the Official Plat thereof. Parcel 50: (APN: 444-050-04) Section 25, Township 3 0 South, Range 3 5 East, Mount Diablo Base and Meridian, in the un- incorporated area, County of Kern, State of California, according to the Official Plat thereof. Parcel 51: (APN: 444-050-01) Section 27, Township 30 South, Range 35 East, Mount Diablo Base and Meridian, in the un- incorporated area, County of Kern, State of California, according to the Official Plat thereof. Parcel 52: (APN: 444-060-03) Section 29, Township 3 0 South, Range 3 5 East, Mount Diablo - Base and Meridian, in the un- incorporated area, County of Kern, State of California, according to the Official Plat thereof. Parcel 53: (APN: 444-060-08) Section 33, Township 30 South, Range 35 East, Mount.Diablo Base and Meridian, in the un- incorporated area, County of Kern, State of California, according to the Official Plat thereof. Exhibit A-8 LA\1930088.3 Parcel 54: (APN: 444-120-06) The Southwest quarter of Section 28, Township 30 South, Range 36 East, Mount Diablo Base and Meridian, in the un-incorporated area, County of Kern, State of California, according to the Official Plat thereof. Parcel 55: (APN: 444-120-02) Section 29, Township 30 South, Range 36 East, Mount Diablo Base and Meridian, in the un- incorporated area, County of Kern, State of California, according to the Official Plat thereof. Parcel 56: (APN: 444-010-06) Fractional Section 1, Township 30 South, Range 35 East, Mount Diablo Base and Meridian, in the un-incorporated area, County of Kern, State of California, according to the Official Plat thereof. Exhibit A-9 LA\1930088.3 EXHIBIT B Recording Requested by City of Vernon and when recorded, mail to: Attn: EXHIBIT B SPACE ABOVE FOR RECORDER'S USE Recording Fee: Exempt pursuant to California Government Code § 27383 MEMORANDUM OF GRAZING LEASE THIS LEASE HEREIN IS FOR A PERIOD LESS THAN 99 YEARS. A.P.N. The City of Vernon, a municipal corporation and a chartered city duly organized and existing under and by virtue of the Constitution and laws of the State of California ("Landlord"), hereby leases to , a ("Tenant'), that certain real property located in Kern County, California, and more particularly described on Appendix "A" attached hereto (the "Proper1y"). I . The terms of the tenancy are set forth in a certain unrecorded Lease between Landlord and Tenant dated October 15, 2008 (the "Lease"), the provisions of which Lease are incorporated herein by this reference, and covering the Property. Unless otherwise defined herein, any term with initial capitalization herein shall have the definition set forth in the Lease. 2. The Initial Term.of this Lease commences on October 17, 2008 and expires one (1) year thereafter. The term of the Lease shall continue on a year-to-year basis unless cancelled by Exhibit B-1 LA\1930088.3 either Party upon notice given to the other Party not less than sixty (60) days prior to the expiration of the then current term. 3. The Property is leased for the purpose of horse and cattle grazing and for no other purpose. Tenant shall not use or knowingly permit any part of the Property to be used for any unlawful purpose. Tenant shall be solely responsible for the supervision, feeding, watering, veterinary and other care of Tenant's livestock and for the acts of Tenant's livestock. Grazing may only take place on such portions of the Property and with such intensity of livestock as Landlord may reasonably permit from time to time such that the grazing will not interfere with any activity performed by Landlord on the Property 4. Landlord has reserved unto itself, in its sole discretion, the right to terminate the Lease upon thirty (30) days written notice to Tenant. Landlord shall not be liable to Tenant for any damages in connection with Landlord's exercise of its right of termination under the Lease. 5. Landlord and Tenant have further agreed that Tenant shall not, without the prior written consent of Landlord, assign, mortgage, pledge, encumber, or permit any lien to attach to, or otherwise transfer, this Lease or any interest hereunder, permit any assignment, or other transfer of this Lease or any interest hereunder by operation of law, sublet the Property or any part thereof, or enter into any license or concession agreements or otherwise permit the occupancy or use of the Property or any part thereof by any persons other than Tenant.. 6. This instrument is executed solely for recording purposes and nothing herein shall be deemed or construed to modify or vary the terms of the Lease or the easements granted therein. In the event of any conflict between the Lease and this memorandum, the terms and conditions of the Lease shall prevail. Exhibit B-2 LA\1930088.3 IN WITNESS WHEREOF, the undersigned have executed this Memorandum of Lease as of the ,;��ay of 2009. TENANT: ReNu RESOURCES, LLC, a Delaware limited liability company By: CIM/Onyx Ranch Manager, LLC, a Delaware Limited liability comp its Managing Member By: Renewable Resource Group Holding Company, Inc., its Operating Manager By: Name: D. Cole Frates Title: LANDLORD: CITY OF VERNON, ATTEST: a California chartered city By: By: "TqaAja.�-- Leonis C. Malburg Name: Sharon Duckworth Title: Mayor Title: Acting Deputy City Clerk APPROVED AS A FORM: f 14 4 INV f- — Jeff///W. Ha4rAson, City Attorney E)(hibit B-3 LA\1930088.3 State of California County of 4,2 V before me, who proved -to me on the basis of skisfactory ev-idence to be the person(s)-whose name4<pare subscalbed to the within instrument and acknowledged to me that(Oshe/they executed the same in 12/her/their authorized capacity�fM, and that by 10her/their signature(s� on the instrument the person(s), or the entity upon behalf of which the person(-S� acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foreizoina DaraaraDh is true and correct. WITNESS my hand and official seal. Signature 74-7�-.;� (Seal) State of California County of U.. KATHRKA. Mong < COMMISslon # i s83263 Notary Public - California Los Angews County On 200_, before me, personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by, his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and corr ect. WITNESS my hand and official seal. Signature (Seal) Exhibit B-4 LA\1930088.3 State of California County of On 200_, before me, personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) Exhibit B-5 LA\1930088.3 APPENDIX "A" TO MEMORANDUM OF GRAZING LEASE Legal Description of the Property [See Exhibit A to Lease.] LA\1930088.3 RI SK MANAGEMENT INTER -DEPARTMENT MEMORANDUM DATE: February 23, 2009 TO: Nelly Giron City Clerk FROM: Willard G. Yamaguchi Risk Manager RE: Renu Resources, LLC, c/o CIM Group, Inc. Please be advised that the above referenced has provided acceptable insurance coverage. Attached for your retention are insurance certificates and related policies, declarations and/or endorsements for the above -referenced insured that were issued by: National Union Fire Insurance Company of Pittsburgh (General Liability) This concerns insurance coverage for Lease Agreement. WY/ab c: Debbie Juarez Judy Lehr PRODUCER Aon Risk insurance Services west, Inc. LOS Angeles CA office 707 wilshire Boulevard Suite 2600 Los Angeles CA 90017-0460 USA INSURED CIM Group, L.P. 6922 Holl6wood Blvd suite #90 LOS Angeles CA 90028 USA THIS CERTIFICATE IS ISSUED AS A MArrER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. INSURERS AFFORDING COVERAGE NAIC N _S390 1 INSURER A: National Union Fire Ins Co of Pittsburgh 19445 INSURER D: INSURERC: INSURER 0: INSURER E: THE POLICIES OF INSURANCE LISTED BELOW RAVE BEEN ISSUED TO 711E INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY 136 ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HERRIN IS SUWECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. AGGREGATE LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. LIMITS SHOWN ARE AS REOUESTED IONSR r9s) LTR 114 TYPE Or INSURANCE POLICY NUMBER POLICY EFFEcTIv4POLICY EXPIRATIGNI I I nATFAINfinnAnn I nA7rmmnnnt� LIMITS ERAL LIABILITY GL457ZZ97 11123108 11/23/09 EACH OCCURRENCE $1,000, COMMERCIAL GENERAL LIABILITY DAMAGE TO RENTED CLAIMS MADE M OCCUR PREMISES (Ea occunx=1 ME13 Exr tAnv one pawn) PERSONAL &ADV INJURY S1.0001 GENERAL AGGREGATE S2,000. GEn AGGREGATE LIMIT APPLIES PER.* PRODUCTS-COMP/OPAGG j S2.000, POLICY [3 PRO- [D LOC JECT MOBILE LIABILITY COMBINE, D SINGLE LIMrr ANY AUTO (Ea &=Wm) ALL OWNED AUTOS BODILY INJURY SCHEDULEDAUTOS Fee Person) HIRED AUTOS BODILY INJURY NONOWNEDAUTOS (Pefaccklm) PROPERTY DAMAGE (Per ucidau) GARAGE LIABILITY AUTO ONLY - EA ACCIDENT ANY AUTO OTHER THAN FA ACC AUTOONLY: — 1H I AGG A I JFXCESS /VMBRELLA LIABILITY DE9834468 11/23/08 11/23/09 EACH OCCURRENCE 55,000,0ou 15 OCCUR n CLAIMS MADE I AGGREGATE S5,000,000 $10,000 WORKERS COMPENSATION AND EMPLOVEM'IJABILfTY E.L. EACH ACCIDENT ANY PROPRIETOR / PARTNER I EXECUTIVE OFFICE"IEMBER EXCLUDED? E.L. DISEASE -EA EMPLOYEE iryes. desa&e ur4a SPECIAL PROVISIONS E.L. DISEASE -POLICY, LIMIT below OTHER IDFSCRIPTION OF OPERATIONSILMA-nONSIVEHICLESIFXCLUSIONS ADDED BY IINDORSEMENDSPECIAL PROVISIONS Named Insured includes: ReNu Resources, LLC Location: The area commonly known as OnYX Ranch. p city of Vernon its officers and employ es are added as an Additional insured as required by written contract but ic limited to the operations of the Insur:d under said contract, and always subject to the policy terms, conditions F-11 city of Vernon SHOULD ANY OF THE A13OVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION Its officers and employees DATE THEREOF. THE ISSUING INSURER WILL ENDEAVOR TO MAIL I Attn: Risk Management 30 DAYS WRITTEN NOTICE TO THE CERTIFICATE HOLDER NAMED TO THE LEFT. 435 Santa Fe Ave. BUT FAILURE TO DO SO SHALL IMPOSE NO OBLIGA`nON OR LIABILITY Vernon CA 90058 USA OF ANY KIND UPON THE INSURER. ITS AGENTS OR REPRESENTATIVES. AUTHORIZED REPRESENTATIVE -Sa/. lcftejr.. =Jr. 14 0 �L_� Attachment to ACORD Cerfiflcate for CIM Group, L.P. The terms, conditions and provisions noted below are hereby attached to the captioned certificate as additional description of the coverage afforded by the insurer(s). This attachment does not contain all tcnns, conditions, coverages or exclusions contained in the policy. INSURED CIM Group, L.P. 6922 H011 ood Blvd Suite #90?r LOS Angeles CA 90028 USA INSURER INSURER INSURER INSURER ADDITIONAL POLICIES If a policy below does not include limit information, refer to the corresponding policy on the ACORD certificate form for policy limits. INSR LTR ADWL INSRD TYPEOFINSURANCE POLICY NUMBER POLICY DESCRIMON POLICY EFFEE-nVE DATE POLICY EXPIRATION DATE LISIMS DFSCRIMON OF OPERATIONS/LOCATIONMHICLrS/EXCLUStONS ADDED BY ENDORSEMEN'TISPECIAL PROVISIONS and exclusions. Cancellation Provision shown herein is sub ect to shorter or longer time periods depending on the jurisdiction of, and reason for, the cancellation. Certificate No : 570033016014 A I POLICY NUMBER: GL4572297 COMMERCIAL GENERAL LIABILITY CG 20 26 1186 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. ADDITIONAL INSURED - DESIGNATED PERSON OR ORGANIZATION This endorsement modifies Insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART. SCHEDULE Name of Person or Organization: City of Vernon Its offlcers and employees (if no entry appears above, information required to complete this endorsement will be shown in the Declarations as applicable to this endorsement.) WHO IS AN INSURED (Section 11) Is amended to include as an insured the person or organization shown in the Schedule as an insured but only with respect to liability arising out of your operations or premises owned by or rented to you. CO 20 26 111185 0 Insurance Services Office, Inc., 1984