Resolution No. 2010-064RESOLUTION NO. 2010-64
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
VERNON APPROVING AND AUTHORIZING THE EXECUTION OF A
LETTER AGREEMENT BY AND BETWEEN THE CITY OF VERNON
AND BARCLAYS CAPITAL FOR FINANCIAL ADVISORY
SERVICES REGARDING THE SALE OF THE TEHACHAPI
RENEWABLE ENERGY LAND
WHEREAS, the City of Vernon ("City") is a chartered municipal
corporation of the State of California that owns and operates a system
for the generation, purchase, transmission, distribution and sale of
electric capacity and energy; and
WHEREAS, the City owns approximately 23,000 acres of land
suitable for wind and solar energy development in Kern County,
California (the "Tehachapi Renewable Energy Land"); and
WHEREAS, the City requires financial advisory services
pertaining to the sale of the Tehachapi Renewable Energy Land (the
"Work"); and
WHEREAS, Barclays Capital ("Barclays") is qualified and
capable of furnishing the labor, materials and expertise necessary to
perform the Work; and
WHEREAS, by a memorandum dated May 20, 2010, the City
Administrator has.recommended that the City enter into a letter
agreement with Barclays setting forth the terms and conditions under
which Barclays will perform the Work (the "Agreement"); and
WHEREAS, the City Council of the City of Vernon has
determined that, pursuant to the provisions of subsection (b)(1) and
(7) of Section 2.27 of the Vernon City Code, it is in the public
interest and necessity to enter into the Agreement with United for
fencing services.
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 does
hereby find and determine that the recitals contained hereinabove
are true and correct.
SECTION 2: The City Council of the City of Vernon hereby
approves the Agreement with Barclays, a copy of which is attached
hereto as Exhibit A.
SECTION 3: The City Council of the City of Vernon hereby
authorizes the City Administrator to execute said Agreement 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 take whatever
actions are deemed necessary or desirable for the purpose of
implementing and carrying out the purposes of this Resolution and the
transactions herein approved or authorized.
SECTION 5: The City Council of the City of Vernon hereby
directs the City Clerk, or the City Clerk's designee, to send a fully
executed Agreement to Barclays.
-2-
SECTION 6: The City Clerk of the City of Vernon shall
certify to the passage, approval and adoption of this resolution, and
the City Clerk of the City of Vernon shall cause this resolution and
the City Clerk's certification to be entered in the File of Resolutions
of the Council of this City.
APPROVED AND ADOPTED this 24Lh day of May, 2010.
Name: Hilario Gonzales
Title: Mayor
ATTEST
Willard G. Ya a u i, C'ty Clerk
-3-
0
STATE OF CALIFORNIA )
) ss
COUNTY OF LOS ANGELES )
I, Willard G. Yamaguchi, City Clerk of the City of Vernon, do
hereby certify that the foregoing Resolution, being Resolution
No. 2010-64, was duly passed, approved and adopted by the City Council
of the City of Vernon at a regular meeting of the City Council duly
held on Monday, May 24, 2010, and thereafter was duly signed by the
Mayor or Mayor Pro-Tem of the City of Vernon.
Executed this ® J day of May, 2010, at Vernon, California.
Wi lard G. m guqbk, City Clerk
(SEAL)
M
EXHIBIT A
BARC
qO CAPIT!AL
;) " ,
May 20, 2010
Donal O'Callaghan
City of Vernon
4305 Santa Fe Avenue
Vernon, California 90058
Dear Donal:
745 Seventh Avenue
New York, NY 10019
United States
This letter agreement (this "Agreement") will confirm the understanding and agreement between Barclays Capital Inc. ("Barclays Capital") and
the City of Vernon (the "City") as provided below. The terms of this Agreement shall apply to all services provided by Barclays Capital to the
City in connection with its engagement hereunder.
1. The City hereby engages Barclays Capital on an exclusive basis for the purpose of providing financial advisory services to the City
with respect to a Transaction (as defined below) involving the City's interest in approximately 23,000 acres of the renewable acreage
(both wind and solar, collectively, the "Renewable Energy Land") which reflects the renewable acreage remaining after the sale of
12,240 acres of the Red Rock Wind Project ("RRWP") by the City to NextEra Energy in February 2010.
2. Barclays Capital hereby accepts the engagement described in paragraph 1 and, in that connection, agrees to:
(a) provide general business, financial and valuation analyses of the Renewable Energy Land;
(b) develop, update and review with the City on an ongoing basis a list and status of parties which might be interested in a
Transaction involving the Renewable Energy Land, and only contact parties approved by the City;
(c) assist the City in arranging meetings and / or conference calls with the approved list of parties to discuss their respective
interests in a Transaction involving the Renewable Energy Land;
(d) coordinate the distribution to and execution of a confidentiality agreement, in a form to be agreed upon by the City, with each
prospective counterparty;
(e) upon the City's request, assist the City in preparing a briefing memorandum and other marketing materials, concerning the
Renewable Energy Land, to be shared with prospective counterparties;
(f) assist the City in developing a data room for the Renewable Energy Land and managing access to the data room by
prospective counterparties;
(g) manage the overall auction process including the day-to-day diligence and site visits associated with the process;
(h) consult with and advise the City concerning financing, hedging, and asset management opportunities that could be undertaken by
a prospective counterparty in connection with a Transaction involving the Renewable Energy Land; and
0) assist the City in negotiating transactional contracts with any prospective counterparty.
BARCLAYS
CAPITAL,
Page 2 of 6
3. For purposes of this Agreement a "Transaction" shall mean, with respect to the Renewable Energy Land, any transaction or series or
combination of related transactions, other than in the ordinary course of business, whereby, directly or indirectly, a material interest
(including any economic interests) in, or a material portion of the assets of, such Renewable Energy Land is sold to, acquired by or
otherwise transferred to a counterparty or counlerparties for cash or any other consideration, including, without limitation, by means of a
sale or exchange of assets or capital stock, other securities or ownership interests, a merger or consolidation, a leveraged buy-out, a
minority investment, the formation of a joint venture or partnership, a derivative or hedging transaction or any similar transaction.
4. As compensation for the services rendered by Barclays Capital hereunder, the City agrees as follows:
(a) If, during the term of Barclays Capital's engagement hereunder or at any time during a period of 12 months following the
effective date of termination of Barclays Capital's engagement hereunder, an agreement to effect a Transaction with respect to the
Renewable Energy Land is entered into or a Transaction with respect to the Renewable Energy Land is consummated, the City
shall pay Barclays Capital an advisory fee with respect to such Transaction as set out in the table below (subject to a minimum
advisory fee of not less than $3.0 million).
Per Acre Gross Consideration for the Renewable Energy Land Advisory Fees Payable to Barclays Capital
Gross sale price up to $3,220 per acre $225 per acre
Plus for every additional dollar per acre in excess of gross consideration of 2% of such additional gross consideration
$3,220 per acre per acre in excess of $3,220 per acre
The advisory fee shall be payable in cash as follows: 100% upon closing of a Transaction with respect to the Renewable
Energy Land.
(b) If discussions regarding a Transaction are terminated or a Transaction does not occur for any reason whatsoever and the City
and/or any of its affiliates is paid a break-up, termination or similar fee by the prospective counterparty or any other person in
connection therewith during the term of Barclays Capital's engagement hereunder or in connection with a Transaction for which a
fee would otherwise have been payable pursuant to subparagraph 4(a) above, the City shall pay Barclays Capital, promptly upon
receipt thereof, a fee equal to the lesser of (1) 50% of such break-up, termination or similar fees or (ii) the amount that would
otherwise have been payable by the City to Barclays Capital if such Transaction had been consummated in accordance with its
terms.
(c) Any amounts actually paid by the City pursuant to subparagraph 4(a) shall be creditable once against any fees that subsequently
become payable pursuant to subparagraph 4(b).
5. After considering both the potential conflicts inherent in providing acquisition financing or related services while concurrently providing
sell -side financial advisory services, as well as the potential benefits associated with Barclays Capital providing such acquisition financing
or related services, the City consents to and agrees that, to the extent any prospective counterparty to a Transaction requires or is
contemplating any financing in order to consummate such Transaction (including, without limitation, any interim or permanent senior or
subordinated debt financing or the sale or placement of any debt or equity securities) or related capital planning and/or risk
management services (including, without limitation, execution of interest rate, foreign exchange, credit and commodities hedging or equity
derivative transactions), Barclays Capital, through itself and one or more of its affiliates, may offer to such counterparty and participate
in such acquisition financing or related services in respect of such Transaction.
6. The City shall reimburse Barclays Capital, promptly upon request, for any reasonable expenses incurred, however Barclays will require
City approval for any significant professional and legal fees and disbursements.
7. The City shall:
(a) furnish to Barclays Capital the names of all parties with which the City has had discussions or contacts prior to or during the
term of Barclays Capital's engagement hereunder concerning a Transaction; and
(b) make available to Barclays Capital all information concerning the business, assets, liabilities, operations, financial condition and
prospects of the Renewable Energy Land or the City which Barclays Capital reasonably requests in connection with the
performance of its obligations hereunder. The City shall promptly advise Barclays Capital regarding any material developments or
matters relating to the City, the Renewable Energy Land or which may otherwise affect the Transaction which occur during the
term of Barclays Capital's engagement hereunder.
BARCLAYS
CAPITAL
Page 3 of 6
(c) All such information provided by or on behalf of the City shall be complete and accurate and not misleading in all material
respects, and Barclays Capital shall be entitled to rely upon the accuracy and completeness of all such information without
independent verification.
8. The parties acknowledge that the City may refuse to discuss or negotiate any Transaction with any party for any reason whatsoever
and may terminate negotiations with any party at any time.
9. The City agrees that in any press release announcing a transaction contemplated by this Agreement, the City will include in such
press release a reference to Barclays Capital's role as financial advisor to the City with respect to such transaction. The City agrees
that Barclays Capital has the right following the earlier of such public announcement by the City or the closing of a Transaction to
place a press release in financial and other publications at its own expense describing its services to the City hereunder; provided,
that Barclays Capital will submit a copy of any such press release to the City for its prior approval, which approval shall not be
unreasonably withheld or delayed.
10. Except as required by applicable law or legal process, any written or oral advice to be provided by Barclays Capital under this
Agreement is exclusively for the information of the City, and such advice and the terms of this Agreement shall not be disclosed
publicly or made available to third parties without the prior approval of Barclays Capital, other than to the City Council and the City's
employees, consultants and advisors who have a need to know and have been informed by the City of the confidential nature of such
advice and accordingly such advice shall not be relied upon by any person or entity other than the City. Notwithstanding the
foregoing, Barclays Capital acknowledges that the agenda and proceedings of the City Council are public and of public record, as are
any agreements entered into by the City; provided, that the City shall use reasonable efforts, consistent with its obligations under law,
to maintain as confidential any information provided by Barclays Capital pursuant to its engagement hereunder. The City acknowledges
that (i) Barclays Capital is not providing any advice on tax, legal, regulatory or accounting matters and that it will seek the advice of
its own professional advisors for such matters and make an independent decision regarding any transaction contemplated herein based
upon such advice and (ii) the determination of the proper application of United States generally accepted accounting principles or other
accounting, tax or regulatory treatment to an actual transaction is the sole responsibility of the City.
11. In consideration for the services to be provided by Barclays Capital hereunder, the City hereby agrees to indemnify and hold harmless
each of Barclays Capital, its affiliates and their respective directors, officers, employees, advisors and other representatives (each, an
"Indemnified Party") against any and all losses, claims, damages, expenses and liabilities, joint or several (collectively, "Liabilities"), to
which an Indemnified Party may become liable, arising out of or otherwise relating to this Agreement (collectively, the "Indemnity
Coverage"), unless a court of competent jurisdiction determines in a final, non -appealable judgment that the Liabilities directly resulted
from the gross negligence or willful misconduct of such Indemnified Party. The City further agrees to reimburse each Indemnified Party
promptly upon request for all out-of-pocket expenses (including reasonable attorneys' fees and expenses) as they are incurred in
connection with the investigation of, preparation for the defense of or providing evidence in, any action, claim, suit, proceeding or
investigation, whether pending or threatened (each and collectively, an "Action"), arising out of or otherwise relating to the Indemnity
Coverage. The City also agrees that no Indemnified Party shall have any liability of any nature to the City or any other person
asserting any Action on behalf of or in right of the City, whether arising out of or otherwise relating to the Indemnity Coverage,
unless a court of competent jurisdiction determines in a final, non -appealable judgment that such Liabilities resulted directly from the
gross negligence or willful misconduct of such Indemnified Party.
Promptly after receipt by an Indemnified Party of service of any complaint or actual notice of the commencement of any Action with
respect to which indemnification is being sought hereunder, such Indemnified Party will notify the City in writing of such complaint or
of the commencement of such Action, but failure to so notify the City will relieve the City from the obligation to indemnify such
Indemnified Party only if and only to the extent the City suffers actual prejudice as a result thereof, and will not in any event relieve
the City from any other obligation or liability that the City may have to any Indemnified Party otherwise than in accordance with the
provisions hereof. If the City so elects, the City will assume the defense of such Action, in which case, the Indemnified Party shall
not be entitled to reimbursement for any costs it incurs for defense (other than reasonable costs of investigation, assisting the City in
its defense and providing evidence in or preparing to serve or serving as a witness) in connection therewith; provided, however, that if
the Indemnified Party reasonably determines that having common counsel would present such counsel with a conflict of interest or if
the defendants in or targets of any such Action include both an Indemnified Party and the City and such Indemnified Party reasonably
concludes that there may be legal defenses available to it or other Indemnified Parties that are different from or in addition to those
available to the City, or if the City fails to assume the defense of such Action or to employ counsel reasonably satisfactory to such
Indemnified Party in a timely manner, then such Indemnified Party may employ separate counsel to represent or defend it in any such
Action and the City will pay the reasonable and customary fees and disbursements of such counsel; provided, however, that the City
will not be required to pay the fees and disbursements of more than one separate counsel (in addition to local counsel) for such
Indemnified Parties in any jurisdiction in any single action or proceeding. In any Action the defense of which the City assumes, the
Indemnified Party will have the right to participate in such litigation and to retain its own counsel at such Indemnified Party's own
expense.
Page 4 of 6
If for any reason the foregoing indemnity or reimbursement is unavailable or insufficient, the City shall contribute to amounts paid or
payable by Barclays Capital and each other Indemnified Party in respect of such Liabilities in such proportion as is appropriate to
reflect the relative benefits and relative faults of the City, on the one hand, and Barclays Capital, on the other hand, along with any
other equitable considerations, in connection with the matters to which such Liabilities relate.
The City agrees that the indemnification, reimbursement and contribution commitments set forth in this paragraph 11 shall apply whether
or not any Indemnified Party is a formal party to any such Action and the rights of the Indemnified Parties referred to in this
paragraph 11 shall be in addition to any other rights that any Indemnified Party may otherwise have against the City. The City
agrees that, without Barclays Capital's prior written consent, it will not agree to any settlement of, compromise or consent to the entry
of any judgment in or other termination of any Action (each and collectively, a "Settlement") in respect of which indemnification could
be sought hereunder unless (1) such Settlement includes an unconditional release of each Indemnified Party from any liabilities arising
out of such Action and does not include any findings of fact or admissions of culpability as to the Indemnified Party and (ii) the
parties agree that the terms of such Settlement shall remain confidential, to the extent permitted by law.
Additionally, the parties agree that in any legal proceeding between the parties related to the terms of this. Agreement, including with
respect to any disputes, breaches or enforcement of the terms contained' herein, the losing party as determined by a court of
competent jurisdiction or any arbitral authority shall reimburse the prevailing party for any legal and other expenses reasonably incurred
by the prevailing party in. connection with such legal proceeding.
12. Nothing in this Agreement, expressed or implied, is intended to confer or does confer on any person or entity other than the parties
hereto or their respective successors and assigns, and to the extent expressly set forth herein, the Indemnified Parties, any rights or
remedies under or by reason of this Agreement or as a result of the services to be rendered by Barclays Capital hereunder. The
City acknowledges that Barclays Capital has been retained hereunder solely as a financial advisor of the City with respect to any
Transaction and is engaged hereunder as an independent contractor. The City further acknowledges that Barclays Capital is not acting
as an agent of the City or in a fiduciary capacity (whether contractual or extra -contractual) with respect to the City or its stakeholders,
employees, creditors or any other third party and agrees that it shall not make, and hereby waives, any claim based on an assertion
of any such fiduciary capacity. The City agrees that Barclays Capital is not assuming any duties or obligations other than those
expressly set forth in this Agreement.
13. The City acknowledges and agrees that:
(a) Barclays Capital is a full service securities firm engaged in a wide range of businesses and from time to time, in the ordinary
course of its business, Barclays Capital or its affiliates will hold long or short positions and trade or otherwise effect transactions
for their own account or the account of their customers in debt or equity securities or loans (or any derivatives thereof) of the
companies which may be the subject of the transactions contemplated by this Agreement. Such trading is conducted, of course,
with strict informational barriers in place to protect the confidentiality of client information and in, strict compliance with applicable
securities laws. During the course of Barclays Capital engagement with the City, Barclays Capital or its affiliates may have in
their possession material, non-public information regarding other companies that could potentially be relevant to the City or the
transactions contemplated herein but which cannot be shared due to an obligation of confidence to such other companies.
(b) Barclays Capital's research analysts and research departments are independent from Barclays Capital's investment banking division
and are subject to certain regulations and Internal policies. Barclays Capital's research analysts may hold and make statements
or investment recommendations and/or publish research reports with respect to the transactions contemplated herein or any
counterparty thereto that differ from' or are inconsistent with the views or advice communicated by Barclays Capital's investment'
banking division.
(c) Barclays Capital may arrange for all or any of the services to be performed by it hereunder to be performed by any of its
respective direct or indirect holding companies and/or any direct or indirect subsidiaries of Barclays Capital or such holding
companies.
14. The City and Barclays Capital each represent to the other that there is no other person or entity that is entitled to a finder's fee,
brokerage commission or other payment in connection with the transactions contemplated by this Agreement as a result of any
agreement or understanding with it, except for the City's obligation, under certain conditions, to share a portion of its proceeds from
any sale of the Renewable Energy Land with ReNu Resources, a previous owner of the Renewable Energy Land.
15, The term of Barclays Capital's engagement hereunder shall extend from the date hereof until terminated as set forth below. Subject
to the provisions of paragraphs 3 through 6, 7(c), 8, 10 through 14, . 16 and 18, which shall survive any, termination of this
Agreement, either party may terminate Barclays Capital's engagement hereunder at any time by giving the other party at leash 10 days'
prior written notice.
Page 5 of 6
16. The invalidity or unenforceabilily of any provision of this Agreement shall not affect the validity or enforceability of any other provisions
of this Agreement, which shall remain in full force and effect. This Agreement may be executed in counterparts, each such
counterpart shall be deemed an original and all such counterparts shall together constitute one instrument.
17. This Agreement contains the entire understanding of the parties hereto relating to the matters set forth herein and supersedes all prior
drafts, correspondences or communications with respect hereto. Upon the effectiveness of this Agreement, this Agreement shall
supersede and replace the prior engagement letter agreement dated as of March 6, 2609 between the City and Barclays Capital ("the
Prior Agreement") except for Sections 7(c), 8, 10 through 14, 16 through 18 which survive termination of the Prior Agreement.
Specifically, and without limitation, Barclays shall be entitled to no further compensation under the Prior Agreement. This Agreement
may not be amended or modified except in writing signed by each of the parties and shall be governed by and construed and
enforced in accordance with the laws of the Slate of New York. The City and Barclays Capital hereby irrevocably and unconditionally
consent to submit to the exclusive jurisdiction of the courts of the State of New York and of the United States District Courts located
in the County of New York for any lawsuits, actions or other proceedings arising out of or relating to this Agreement and agree not
to commence any such lawsuit, action or other proceeding except in such courts. The City further agrees that service of any
process, summons, notice or document by mail to the City's address set forth above shall be effective service of process for any
lawsuit, action or other proceeding brought against the City in any such court. The City and Barclays Capital hereby irrevocably and
unconditionally waive any objection to the laying of venue of any lawsuit, action or other proceeding arising out of or relating to this
Agreement in the courts of the State of New York or the United Stales District Courts located in the County of New York, and
hereby further irrevocably and unconditionally waive and agree not to plead or claim in any such court that any such lawsuit, action
or other proceeding brought in any such court has been brought in an inconvenient forum. Any right to trial by jury with respect to
any lawsuit, claim or other proceeding arising out of or relating to this Agreement or the services to be rendered by Barclays Capital
hereunder Is expressly and irrevocably waived.
18. The City represents and warrants, based upon the advice of the Office of the City Attorney of the City of Vernon, that this
Agreement has been duly and validly authorized, executed and delivered by the City and, assuming due authorization and execution
hereof by Barclays Capital, constitutes a valid, legal and binding obligation of the City enforceable against it In accordance with its
terms. The obligations of the City contained herein, as the context may require, shall be binding upon the City's Council, Council
members, administrators, managers and other officials (collectively, the "City Officials") In each of their official capacities as
representatives of the Ctty. Without independent verification, Barclays Capital shall be entitled to rely on the statements and actions of
the City Administrator as may be reasonable under the circumstances In performing He services hereunder.
[The rest of this page has intentionally been left blank.]
Page 6 of 6
If the foregoing correctly sets forth the understanding and agreement between Barclays Capital and the City, please so indicate in the space
provided for that purpose below, whereupon this letter shall constitute a binding agreement as of the date first written above.
BARCLAYS CAPITAL INC.
By:
AGREED:
CITY OF VERNON
By:
Name: Donal O'Callaghan
Title: City Administrator
ATTEST:
By:
Name:
Title:
APPROVED AS TO FORM:
By:
Name:
Title:
Name: John Lange
Title: Managing Director,
Head of Global Power and Utilities
CITY CLERK'S OFFICE
INTEROFFICEMEMORANDUM
DATE: June 8, 2010
TO: Donal O'Callaghan, City Administrator/Director of Light & Power
FROM: Willard Yamaguchi, City Clerk
RE: Resolution No. 2010-64 — A Resolution of the City Council of the City of Vernon
Approving and Authorizing the Execution of a Letter Agreement By Between the City
of Vernon and Barclays Capital for Financial Advisory Services Regarding the Sale of the
Tehachapi Renewable Energy Land
Transmitted herewith is a copy of the fully executed agreement and Resolution No. 2010-64 referenced
above, which was approved by City Council on May 24, 2010.
Thank you.
wY: dj
c: Resolution No. 2010-64
BARCLAYS New
Seventh Avenue.
New York; NY 10019
rAIAPITAL United States
May 20, 2010
Donal O'Callaghan
City of Vernon
4305 Santa Fe Avenue
Vernon, California ' 90058
Dear Donal:
This letter agreement (this "Agreement") will confirm the understanding and agreement between Barclays Capital ,Inc. ("Barclays, Capital") and
the City of Vernon (the "City") as provided below. The terms of this Agreement shall apply to all services provided by _Barclays Capital to the
City in connection with its engagement hereunder.
1. The City hereby engages Barclays Capital on an exclusive basis for the purpose of providing financial advisory services to the City
with respect to a Transaction (as defined below) involving the City's interest in approximately 23,000 acres of the renewable acreage
(both wind and solar, collectively, the "Renewable Energy Land") which reflects the renewable acreage remaining after the sale of
12,240 acres of the Red Rock Wind Project ("RRWP") by the City to NextEra Energy in February 2010.
2. Barclays Capital hereby accepts the engagement described in paragraph 1 and, in that connection, agrees to:
(a) provide general business, financial and valuation analyses of the Renewable Energy Land;
(b) develop, update and review with the City on an ongoing basis a list and status of parties which might be interested in a ,
Transaction involving the Renewable Energy Land, and only contact parties approved by the City;
(c) assist the City in arranging meetings and / or conference calls with the approved list of parties to discuss their respective
interests in a Transaction involving the Renewable Energy Land;
(d) coordinate the distribution to and execution of a confidentiality agreement, in a form to be agreed upon by the City, with each
prospective counterparty;
(a) upon the City's request, assist the City in preparing a briefing memorandum and other marketing materials, concerning the
Renewable Energy Land, to be shared with prospective counterparties; -
(f) assist the City in developing a data room for the Renewable Energy Land and managing access to the data room by
prospective counterparties,
(g) manage the overall auction process including the day-to-day diligence and site visits associated with the process;
(h) consult with and advise the City concerning financing, hedging, and asset management opportunities that could be undertaken by
a prospective counterparty in connection with a Transaction involving the Renewable Energy Land; and
(i) assist the City in negotiating transactional contracts with any prospective counterparty.
BA RC
CAPITA
Page 2 of 6
3. For purposes of this Agreement a "Transaction" shall mean, with respect to the Renewable Energy Land, any transaction or series or
combination of related transactions, other than in the ordinary course of business, whereby, directly or indirectly, a material interest
(including any economic interests) in; or a material portion of the assets of, such Renewable Energy Land is sold to, acquired by or
otherwise transferred to a counterparty or counterparties for cash or any other consideration, including, without limitation, by means of a
sale or exchange of assets or capital stock, other securities or ownership interests, a merger or consolidation; a leveraged buy-out, a
minority investment, the formation of a joint venture or partnership, a derivative or hedging transaction or any similar transaction.
4. As compensation for the services rendered by Barclays Capital hereunder, the City agrees as follows:
(a) If, during the term of Barclays Capital's engagement hereunder or at any time during a period of 12 months following the
effective dale of termination of Barclays Capital's engagement hereunder, an agreement to effect a Transaction with respect to the
Renewable Energy Land is entered into or a Transaction with respect to the Renewable Energy Land is consummated, the City
shall pay Barclays Capital an advisory fee with respect to such Transaction as set out in the table below (subject to a minimum
advisory fee of not less than $3.0 million).
m=T :7e Gm—,s Consideration for the Renewable Enaigy Land Advisory Fees Payable to Barrtays Ca.mtzi
Gross sale price Up to $3,220 per acre $225 per acre
Plus for every additional dollar per acre in excess of gross consideration of 2% of such additional gross consideration
$3,220 per acre per acre in excess of $3,220 per acre
The advisory fee shall be payable in cash as follows: 100% upon closing of a Transaction with respect to the Renewable
Energy Land.
(b) If discussions regarding a Transaction are terminated or a Transaction does not occur for any reason whatsoever and the City
and/or any of its affiliates is paid a break-up, termination or similar fee by the prospective counterparty or any other person in
connection therewith during the term of Barclays Capital's engagement hereunder or in connection with a Transaction for which a
fee would otherwise have been payable pursuant to subparagraph 4(a) above, the City shall pay Barclays Capital, promptly upon
receipt thereof, a fee equal to the lesser of (i) 50% of such break-up, termination or similar fees or (ii) the amount that would
otherwise have been payable by the City to Barclays Capital if such Transaction had been consummated in accordance with its
terms.
(c) Any amounts actually paid by the City pursuant to subparagraph 4(a) shall be creditable once against any fees that subsequently
become payable pursuant to subparagraph 4(b).
5. After considering both the potential conflicts inherent in providing acquisition financing or related services while concurrently providing
sell -side financial advisory services, as well as the potential benefits associated with Barclays Capital providing such acquisition financing
or related services, the City consents to and agrees that, to the extent any prospective counterparty to a Transaction requires or is
contemplating any financing in order to consummate such Transaction (including, without limitation, any interim or permanent senior or
subordinated debt financing or the sale or placement of any debt or equity securities) or related capital planning and/or risk
management services (including, without limitation, execution of interest rate, foreign exchange, credit and commodities hedging or equity
derivative transactions), Barclays Capital, through itself and one or more of its affiliates, may offer to such counterparty and participate
in such acquisition financing or related services in respect of such Transaction.
6. The City shall reimburse Barclays Capital, promptly upon request, for any reasonable expenses incurred, however Barclays will require
City approval for any significant professional and legal fees and disbursements.
7. The City shall
(a) furnish to Barclays Capital the names of all parties with which the City has had discussions or contacts prior to or during the
term of Barclays Capital's engagement hereunder concerning a Transaction; and
(b) make available to Barclays Capital all information concerning the business, assets, liabilities, operations, financial condition and
prospects of the Renewable Energy land or the City, which Barclays Capital reasonably requests in connection with the
performance of its obligations hereunder. The City shall promptly advise Barclays Capital regarding any material developments or
matters relating to the City, the Renewable Energy Land or which may otherwise affect the Transaction which occur during the
term of Barclays Capital's engagement hereunder.
j BARCLAYS-
CAPIM:
Page 3 of 6
(c) All such information provided by or on behalf of the City shall be complete and accurate and not misleading in all material
respects, and Barclays Capital shall be entitled to rely upon the accuracy and completeness of all such information without
independent verification.
8. The parties acknowledge that the City may refuse to discuss or negotiate any Transaction with any party for any reason whatsoever
and may terminate negotiations with any party at any time.
9. The City agrees that in any press release announcing a transaction contemplated by this Agreement, the City will include in such
press release a reference to Barclays Capital's role as financial advisor to the City with respect to such transaction. The City agrees
that Barclays Capital has the right following the earlier of such public announcement by the City or the closing of a Transaction to
place a press release in financial and other publications at its own expense describing its services to the City hereunder; provided,
that Barclays Capital will submit a copy of any such press release to the City for its prior approval, which approval shall not be
unreasonably withheld or delayed.
10. Except as required by applicable law or legal process, any written or oral advice to be provided by Barclays Capital under this
Agreement is exclusively for the information of the City, and such advice and the terms of this Agreement shall not be disclosed
publicly or made available to third parties without the prior approval of Barclays Capital, other than to the City Council and the City's
employees, consultants and advisors who have a need to know and have been informed by the City of the confidential nature of such
advice and accordingly such advice shall not be relied upon by any person or entity other than the City. Notwithstanding the
foregoing, Barclays Capital acknowledges that the agenda and proceedings of the City Council are public and of public record, as are
any agreements entered into by the City; provided, that the City shall use reasonable efforts, consistent with its obligations under law,
to maintain as confidential any information provided by Barclays Capital pursuant to its engagement hereunder. The City acknowledges
that (i) Barclays Capital is not providing any advice on tax, legal, regulatory or accounting matters and that it will seek the advice of
its own professional advisors for such matters and make an independent decision regarding any transaction contemplated herein based
upon such advice and (ii) the determination of the proper application of United States generally accepted accounting principles or other
accounting, tax or regulatory treatment to an actual transaction is the sole responsibility of the City.
11. In consideration for the services to be provided by Barclays Capital hereunder, the City hereby agrees to indemnify and hold harmless
each of Barclays Capital, its affiliates and their respective directors, officers, employees, advisors and other representatives (each, an
"Indemnified Party") against any and all losses, claims, damages, expenses and liabilities, joint or several (collectively, "Liabilities"), to
which an Indemnified Party may become liable, arising out of or otherwise relating to this Agreement (collectively, the "Indemnity
Coverage"), unless a court of competent jurisdiction determines in a final, non -appealable judgment that the Liabilities directly resulted
from the gross negligence or willful misconduct of such Indemnified Party. The City further agrees to reimburse each Indemnified Party
promptly upon request for all out-of-pocket expenses (including reasonable attorneys' fees and expenses) as they are incurred in
connection with the investigation of, preparation for the defense of or providing evidence in, any action, claim, suit, proceeding or
investigation, whether pending or threatened (each and collectively, an "Action"), arising out of or otherwise relating to the Indemnity
Coverage. The City also agrees that no Indemnified Party shall have any liability of any nature to the City or any other person
asserting any Action on behalf of or in right of the City, whether arising out of or otherwise relating to the Indemnity Coverage,
unless a court of competent jurisdiction determines in a final, non -appealable judgment that such Liabilities resulted directly from the
gross negligence or willful misconduct of such Indemnified Party.
Promptly after receipt by an Indemnified Party of service of any complaint or actual notice of the commencement of any Action with
respect to which indemnification is being sought hereunder, such Indemnified Party will notify the City in writing of such complaint or
of the commencement of such Action, but failure to so notify the City will relieve the City from the obligation to indemnify such
Indemnified Party only if and only to the extent the City suffers actual prejudice as a result thereof, and will not in any event relieve
the City from any other obligation or liability that the City may have to any Indemnified Party otherwise than in accordance with the
provisions hereof. If the City so elects, the City will assume the defense of such Action, in which case, the Indemnified Party shall
not be entitled to reimbursement for any costs it incurs for defense (other than reasonable costs of investigation, assisting the City in
its defense and providing evidence in or preparing to serve or serving as a witness) in connection therewith; provided, however, that if
the Indemnified Party reasonably determines that having common counsel would present such counsel with a conflict of interest or if
the defendants in or targets of any such Action include both an Indemnified Party and the City and such Indemnified Party reasonably
concludes that there may be legal defenses available to it or other Indemnified Parties that are different from or in addition to those
available to the City, or if the City fails to assume the defense of such Action or to employ counsel reasonably satisfactory to such
Indemnified Party in a timely manner, then such Indemnified Party may employ separate counsel to represent or defend it in any such
Action and the City will pay the reasonable and customary fees and disbursements of such counsel; provided, however, that the City
will not be required to pay the fees and disbursements of more than one separate counsel (in addition to local counsel) for such
Indemnified Parties in any jurisdiction in any single action or proceeding. In any Action the defense of which the City assumes, the
Indemnified Party will have the right to participate in such litigation and to retain its own counsel at such Indemnified Party's own
expense.
BARCLAYS
CAPITAL
Page 4 of 6
If for any reason the foregoing indemnity or reimbursement is unavailable or insufficient, the City shall contribute to amounts paid or
payable by Barclays Capital and each other Indemnified Party in respect of such Liabilities in such proportion as is appropriate to
reflect the relative benefits and relative faults of the City, on the one hand, and Barclays Capital, ,on the other hand, along with any
other equitable considerations, in connection with the matters to which such Liabilities relate.
The City agrees that the indemnification, reimbursement and contribution commitments set forth in this paragraph 11 shall apply whether
or not any Indemnified Party is a formal party to any such Action and the rights of the Indemnified Parties referred to in this
paragraph 11 shall be in addition to any other rights that any Indemnified Party may otherwise have against the City. The City
agrees that, without Barclays Capital's prior written consent, it will not agree to any settlement of, compromise or consent to the entry
of any judgment in or other termination of any Action (each and collectively, a "Settlement") in respect of which indemnification could
be soughthereunder unless (i) such. Settlement- includes an unconditional release of each Indemnified Party from any liabilities arising out of such Action and does not include any findings of fact or admissions of culpability as to the Indemnified Party and (ii) the
parties agree that the terms of such Settlement shall remain confidential, to the extent permitted by law.
Additionally, the parties agree that in any legal proceeding between the parties related to the terms of this Agreement, including with
respect to any disputes, breaches or enforcement of the terms contained herein, the losing party as determined by a court of
competent jurisdiction or any arbitral authority shall reimburse the prevailing party for any legal and other expenses reasonably incurred
by the prevailing party in connection with such legal proceeding.
12. Nothing in this Agreement, expressed or implied, is intended to confer or does confer on any person or entity other than the parties
hereto or their respective successors and assigns, and to the extent expressly set forth herein, the Indemnified Parties, any rights or
remedies under or by reason of this Agreement or as a result of the services to be rendered by Barclays Capital. hereunder. The ,
City acknowledges that Barclays Capital has been retained hereunder solely as a financial advisor of the City with respect to any
Transaction and is engaged hereunder as an independent contractor. The City further acknowledges that Barclays Capital is not acting
as an agent of the City or in a fiduciary capacity (whether contractual or extra -contractual) with respect to the City or its stakeholders,
employees, creditors or any other third party and agrees that it shall not make, and hereby waives, any claim based` on an assertion
of any such fiduciary capacity. The City agrees that Barclays Capital is not assuming any duties or obligations other than those
expressly set forth in this Agreement.
13. The City acknowledges and agrees that
(a) Barclays Capital is a full service securities firm engaged in a wide range of businesses and from time to time, in the ordinary
course of its business, Barclays Capital or its affiliates will hold long or short positions and trade or otherwise effect transactions
for their own account or the account of their customers in debt or equity securities or loans (or any derivatives thereof) of the
companies which may be the subject of the transactions contemplated by this Agreement. Such trading is conducted, of course,
with strict informational barriers in place to protect the confidentiality of client information and in strict compliance with applicable
securities laws. During the course of Barclays Capital engagement with the City, Barclays Capital or its affiliates may have in
their possession material, non-public information regarding other companies that could potentially be relevant to the City or the
transactions contemplated herein but which cannot be shared due to an obligation of confidence to such other companies.
(b) Barclays Capital's research analysts and research departments are independent from Barclays Capital's investment banking division
and are subject to certain regulations and internal policies. Barclays Capital's research analysts may hold and make statements
or investment recommendations and/or publish research reports with respect to the transactions contemplated herein or any
counterparty thereto that differ from or are inconsistent with the views or advice communicated by Barclays Capital's investment
banking division.
(c) Barclays Capital may arrange for all or any of the services to be performed by it hereunder to be performed by any of its
respective direct or indirect holding companies and/or any direct or indirect subsidiaries of Barclays Capital or such holding
companies.
14. The City and Barclays Capital each represent to the other that there is no other person or entity that is entitled to a finder's fee,
brokerage commission or other payment in connection with the transactions contemplated by this Agreement as a result of any
agreement or understanding with it, except for the City's obligation, under certain conditions, to share a portion of its proceeds from
any sale of the Renewable Energy Land with ReNu Resources, a previous owner of the Renewable Energy Land.
15, The term of Barclays Capital's engagement hereunder shalt extend from the date hereof until terminated as set forth below. Subject
to the provisions of paragraphs 3 through 6, 7(c), 8, 10 through 14, 16 and 18, which shall survive any termination of this
Agreement, either party may terminate Barclays Capital's engagement hereunder at any time by giving the other party at least 10 days'
prior written notice.
BARCLAYS
CAPITAL;
Page 5 of 6
16. The invalidity or unenforceability of any provision of this Agreement shall not affect The validity or enforceability of any other provisions
of. this Agreement,which shall remain in full- .force and effect. This Agreement may be executed in .counterparts, each such
counterpart shall be deemed an original and all such counterparts shall together constitute one instrument.
17. This Agreement contains the entire understanding of the parties hereto relating to the matters set forth herein and supersedes all prior
drafts, correspondences or communications with respect hereto. Upon the effectiveness of this Agreement, this Agreement shall
supersede and replace the prior engagement letter agreement dated as of March 6, 2009 between the City and Barclays Capital ("the
Prior Agreement") except for Sections 7(c), 8, 10 through 14, 16 through 18 which survive termination of the Prior Agreement.
Specifically, and without limitation, Barclays shall be entitled to no further compensation under the Prior Agreement. This Agreement
may not be amended or modified except in writing signed by each of the parties and shall be governed by and construed and
enforced in accordance with the laws of the State of New York. The City and Barclays Capital hereby irrevocably and unconditionally
consent to submit to the exclusive jurisdiction of the courts of the State of New York and of the United States District Courts located
in the County of New York for any lawsuits, actions or other proceedings arising out of or relating to this Agreement and agree not
to commence any such lawsuit, action or other proceeding except in such courts. The City further agrees that service of any
process, summons, notice or document by mail to the City's address set forth above shall be effective service of process for any
lawsuit, action or other proceeding brought against the City in any such court. The City and Barclays Capital hereby irrevocably and
unconditionallywaive any objection to the laying of venue of any lawsuit, action or other proceeding arising out of or relating to this
Agreement in the courts of the State of New York or the United States District Courts located in the County of New York, and
hereby further, irrevocably and unconditionally waive and agree not to plead or claim in any such court that any such lawsuit, action
or other proceeding brought in any such court has been brought in an inconvenient forum. Any right to trial by jury with respect to
any lawsuit, claim or other proceeding arising out of or relating to this Agreement or the services to be rendered by Barclays Capital
hereunder is expressly and irrevocably waived.
18. The City represents and warrants, based upon the advice of the Office of the City Attorney of the City of Vernon, that this
Agreement has been duty and validly authorized, executed and delivered by the City and, assuming due authorization and execution
hereof by Barclays Capital, constitutes a valid, legal and binding obligation of the City enforceable against it in accordance with its
terms. The obligations of the City contained herein, as the context may require, shall be binding upon the City's Council, Council
members, administrators, managers and other officials (collectively, the "City Officials") in each of their official capacities as
representatives of the City. Without independent verification, Barclays Capital shall be entitled to rely on the statements and actions of
the City Administrator as may be reasonable under the circumstances in performing its services hereunder.
[The rest of this page has intentionally been left blank.]
BARCLAYS
CAPITAL
Page 6 of 6
If the foregoing correctly sets forth the understanding and agreement between Barclays Capital and the City, please so indicate in the space
provided for that purpose below, whereupon this letter shall constitute a binding agreement as of the date first written above.
BARCLAYS CAPITAL INC.
By:
Name: John ange
Title: Ma aging Director,
Head of Global rower and Utilities
AGREED:
CITY OF VERNON
By
Name: Donal O'Callaghan
Title: City Administrator
ATTEST:
By:
Name: Willard am 6ch
Title: City Clerk
APPROVED AS TO FORM:
By:
Na e:Laurence S. Wiener
Title: City Attorney
j ►
• 0 i
May 26, 2010
John D. Lange, Managing Director
Head of Global Power & Utilities
Barclays Capital
Investment Banking
745 Seventh Avenue
New York, NY 10019
Re: Letter Agreement for Financial Advisory Services Regarding the Sale of the Tehachapi
Renewable Energy Land
Dear Mr. Lange:
Transmitted herewith are two executed agreements, as referenced above, approved by City
Council on May 24, 2010, through Resolution No. 2010-64.
Please return one fully executed original agreement to the undersigned.
If you have any questions regarding this matter, please call Mr. Donal O'Callaghan, at (323)
583-8811 ext. 834.
Ve truly yours,
WILLARD G. tMGU I
City Clerk
WGY:dj
Enclosure
c: Donal O'Callaghan
Resolution No. 2010-64
Agreement No. 10-031
#BARCLAYS
CAPITAL
May 20, 2010
Donal O'Callaghan
City of Vernon
4305 Santa Fe Avenue
Vernon, California 90058
Dear Donal:
745 Seventh Avenue
New York, NY 10019
United Slates
This letter agreement (this "Agreement") will confirm the understanding and agreement between Barclays Capital Inc. ("Barclays Capital") and
the City of Vernon (the "City") as provided below. The terms of this Agreement shall apply to all services provided by _Barclays Capital to the
City in connection with its engagement hereunder.
1. The City hereby engages Barclays Capital on an exclusive basis for the purpose of providing financial advisory services to the City
with respect to a Transaction (as defined below) involving the City's interest in approximately 23,000 acres of the renewable acreage
(both wind and solar, collectively, the "Renewable Energy Land") which reflects the renewable acreage remaining after the sale of
12,240 acres of the Red Rock Wind Project ("RRWP") by the City to NextEra Energy in February 2010.
2. Barclays Capital hereby accepts the engagement described in paragraph 1 and, in that connection, agrees to:
(a) provide general business, financial and valuation analyses of the Renewable Energy Land;
(b) develop, update and review with the City on an ongoing basis a list and status of parties which might be interested in a
Transaction involving the Renewable Energy Land, and only contact parties approved by the City;
(c) assist the City in arranging meetings and / or conference calls with the approved list of parties to discuss their respective
interests in a Transaction involving the Renewable Energy Land;
(d) coordinate the distribution to and execution of a confidentiality agreement, in a form to be agreed upon by the City, with each
prospective counterparty;
(a) upon the City's request, assist the City in preparing a briefing memorandum and other marketing materials, concerning the
Renewable Energy Land, to be shared with prospective counterparties;
(f) assist the City in developing a data room for the Renewable Energy Land and managing access to the data room by
prospective counterparties,
(g) manage the overall auction process including the day-to-day diligence and site visits associated with the process;
(h) consult with and advise the City concerning financing, hedging, and asset management opportunities that could be undertaken by
a prospective counterparty in connection with a Transaction involving the Renewable Energy Land; and
(i) assist the City in negotiating transactional contracts with any prospective counterparty.
BARCIAYS
CAPITAL
Page 2 of 6
3. For purposes of this Agreement a "Transaction" shall mean, with respect to the Renewable Energy Land, any transaction or series or
combination of related transactions, other than in the ordinary course of business, whereby, directly or indirectly, a material interest
(including any economic interests) in, or a material portion of the assets of, such Renewable Energy Land is sold to, acquired by or
otherwise transferred to a counterparty or counterparties for cash or any other consideration, including, without limitation, by means of a
sale or exchange of assets or capital stock, other securities or ownership interests, a merger or consolidation, a leveraged buy-out, a
minority investment, the formatign of a joint venture or partnership, a derivative or hedging transaction or any similar transaction.
4. As compensation for the services rendered by Barclays Capital hereunder, the City agrees as follows:
(a) . If, during the term of Barclays Capital's engagement hereunder or at any time during a period of 12 months following the
effective date of termination of Barclays Capital's engagement hereunder, an agreement to effect a Transaction with respect to the
Renewable Energy Land is entered into or a Transaction with respect to the Renewable Energy Land is consummated, the City
shall pay Barclays Capital an advisory fee with respect to such Transaction as set out in the table below (subject to a minimum
advisory fee of not less than $3.0 million).
Gross sale price up to $3,220 per acre � $225 per acre
Plus for every additional dollar per acre in excess of gross consideration of 2% of such additional gross consideration
$3,220 per acre per acre in excess of $3,220 per acre
The advisory fee shall be payable in cash as follows: 100% upon closing of a Transaction with respect to the Renewable
Energy Land.
(b) If discussions regarding a Transaction are terminated or a Transaction does not occur for any reason whatsoever and the City
and/or any of its affiliates is paid a break-up, termination or similar fee by the prospective counterparty or any other person in
connection therewith during the term of Barclays Capital's engagement hereunder or in connection with a Transaction for which a
fee would otherwise have been payable pursuant to subparagraph 4(a) above, the City shall pay Barclays Capital, promptly upon
receipt thereof, a fee equal to the lesser of (i) 50% of such break-up, termination or similar fees or (ii) the amount that would
otherwise have been payable by the City to Barclays Capital if such Transaction had been consummated in accordance with its
terms.
(c) Any amounts actually paid by the City pursuant to subparagraph 4(a) shall be creditable once against any fees that subsequently
become payable pursuant to subparagraph 4(b).
5. After considering both the potential conflicts inherent in providing acquisition financing or related services while concurrently providing
sell -side financial advisory services, as well as the potential benefits associated with Barclays Capital providing such acquisition financing
or related services, the City consents to and agrees that, to the extent any prospective counterparty to a Transaction requires or is
contemplating any financing in order to consummate such Transaction (including, without limitation, any interim or permanent senior or
subordinated debt financing or the sale or placement of any debt or equity securities) or related capital planning and/or risk
management services (including, without limitation, execution of interest rate, foreign exchange, credit and commodities hedging or equity
derivative transactions), Barclays Capital, through itself and one or more of its affiliates, may offer to such counterparty, and participate
in such acquisition financing or related services in respect of such Transaction.
6. The City shall reimburse Barclays Capital, promptly upon request, for any reasonable expenses incurred, however Barclays will require
City approval for any significant professional and legal fees and disbursements.
7. The City shall:
(a) furnish to Barclays Capital the names of all parties with which the City has had discussions or contacts prior to or during the
term of Barclays Capital's engagement hereunder concerning a Transaction; and
(b) make available to Barclays Capital all information concerning the business, assets, liabilities, operations, financial condition and
prospects of the Renewable Energy Land or the City which Barclays Capital reasonably requests in connection with the
performance of its obligations hereunder. The City shall promptly advise Barclays Capital regarding any material developments or
matters relating to the City, the Renewable Energy Land or which may otherwise affect the Transaction which occur during the
term of Barclays Capital's •engagement hereunder.
PARCIAYS
CAPITAL
Page 3 of 6
(c) All such information provided by or on behalf of the City shall be complete andaccurate and not misleading in all material
respects, and Barclays Capital shall be entitled to rely upon the accuracy and completeness of all such information without
independent verification.
8. The parties acknowledge that the City may refuse to discuss or negotiate any Transaction with any party for any reason whatsoever
and may terminate negotiations with any party at any time.
9. The City agrees that in any press release announcing a transaction contemplated by this Agreement, the City will include in such
press release a reference to Barclays Capital's role as financial advisor to the City with respect to such transaction. The City agrees
that Barclays Capital has the right following the earlier of such public announcement by the City or the closing of a Transaction to
place a press release in financial and other publications at its own expense describing its services to the City hereunder; provided,
that Barclays Capital will submit a copy of any such press release to the City for its prior approval, which approval shall not be
unreasonably withheld or delayed.
10. Except as required by applicable law or legal process, any written or oral advice to be provided by Barclays Capital under this
Agreement is exclusively for the information of the City, and such advice and the terms of this Agreement shall not be disclosed
publicly or made available to third parties without the prior approval of Barclays Capital, other than to the City Council and the City's
employees, consultants and advisors who have a need to know and have been informed by the City of the confidential nature of such
advice and accordingly such advice shall not be relied upon by any person or entity other than the City. Notwithstanding the
foregoing, Barclays Capital acknowledges that the agenda and proceedings of the City Council are public and of public record, as are
any agreements entered into by the City; provided, that the City shall use reasonable efforts, consistent with its obligations under law,
to maintain as confidential any information provided by Barclays Capital pursuant to its engagement hereunder. The City acknowledges
that (i) Barclays Capital is not providing any advice on tax, legal, regulatory or accounting matters and that it will seek the advice of
its own professional advisors for such matters and make an independent decision regarding any transaction contemplated herein based
upon such advice and (ii) the determination of the proper application of United Slates generally accepted accounting principles or other
accounting, tax or regulatory treatment to an actual transaction is the sole responsibility of the City.
11. In consideration for the services to be provided by Barclays Capital hereunder, the City hereby agrees to indemnify and hold harmless
each of Barclays Capital, its affiliates and their respective directors, officers, employees, advisors and other representatives (each, an
"Indemnified Party") against any and all losses, claims, damages, expenses and liabilities, joint or several (collectively, "Liabilities"), to
which an Indemnified Party may become liable, arising out of or otherwise relating to this Agreement (collectively, the "Indemnity
Coverage"), unless a court of competent jurisdiction determines in a final, non -appealable judgment that the Liabilities directly resulted
from the gross negligence or willful misconduct of such Indemnified Party. The City further agrees to reimburse each Indemnified Party
promptly upon request for all out-of-pocket expenses (including reasonable attorneys' fees and expenses) as they are incurred in
connection with the investigation of, preparation for the defense of or providing evidence in, any action, claim, suit, proceeding or
investigation, whether pending or threatened (each and collectively, an "Action"), arising out of or otherwise relating to the Indemnity
Coverage. The City also agrees that no Indemnified Party shall have any liability of any nature to the City or any other person
asserting any Action on behalf of or in right of the City, whether arising out of or otherwise relating to the Indemnity Coverage,
unless a court of competent jurisdiction determines in a final, non -appealable judgment that such Liabilities resulted directly from the
gross negligence or willful misconduct of such Indemnified Party.
Promptly after receipt by an Indemnified Party of service of any complaint or actual notice of the commencement of any Action with
respect to which indemnification is being sought hereunder, such Indemnified Party will notify the City in writing of such complaint or
of the commencement of such Action, but failure to so notify the City will relieve the City from the obligation to indemnify such
Indemnified Party only if and only to the extent the City suffers actual prejudice as a result thereof, and will not in any event relieve
the City from any other obligation or liability that the City may have to any Indemnified Party otherwise than in accordance with the
provisions hereof. If the City so elects, the City will assume the defense of such Action, in which case, the Indemnified Party shall
not be entitled to reimbursement for any costs it incurs for defense (other than reasonable costs of investigation, assisting the City in
its defense and providing evidence in or preparing to serve or serving as a witness) in connection therewith; provided, however, that if
the Indemnified Party reasonably determines that having common counsel would present such counsel with a conflict of interest or if
the defendants in or targets of any such Action include both an Indemnified Party and the City and such Indemnified Party reasonably
concludes that there may be legal defenses available to it or other Indemnified Parties that are different from or in addition to those
available to the City, or if the City fails to assume the defense of such Action or to employ counsel reasonably satisfactory to such
Indemnified Party in a timely manner, then such Indemnified Party may employ separate counsel to represent or defend it in any such
Action and the City will pay the reasonable and customary fees and disbursements of such counsel; provided, however, that the City
will not be required to pay the fees and disbursements of more than one separate counsel (in addition to local counsel) for such
Indemnified Parties in any jurisdiction in any single action or proceeding. In any Action the defense of which the City assumes, the
Indemnified Party will have the right to participate in such litigation and to retain its own counsel at such Indemnified Party's own
expense.
BARCLAYS
CAPITAL
Page 4 of 6
If for any reason the foregoing indemnity or reimbursement is unavailable or insufficient, the City shall contribute to amounts paid or
payable by Barclays Capital and each other Indemnified Party in respect of such Liabilities in such proportion as is appropriate to
reflect the relative benefits and relative faults of the City, on the one hand, and Barclays Capital, on the other hand, along with any
other equitable considerations, in connection with the matters to which such Liabilities relate.
The City agrees that the indemnification, reimbursement and contribution commitments set forth in this paragraph 11 shall apply whether
or not any Indemnified Party is a formal party to any such Action and the rights of the Indemnified Parties referred to in this
paragraph 11 shall be in addition to any other rights that any Indemnified Party may otherwise have against the City. The City
agrees that, without Barclays Capital's prior written consent, it will not agree to any settlement of, compromise or consent to the entry
of any judgment in or other termination of any Action (each and collectively, a "Settlement") in respect of which indemnification could
be sought hereunder unless (i) such Settlement includes an unconditional release of each Indemnified Party from any liabilities arising
out of such Action and does not include any findings of fact or admissions of culpability as to the Indemnified Party and (ii) the
parties agree that the terms of such Settlement shall remain confidential, to the extent permitted by law.
Additionally, the parties agree that in any legal proceeding between the parties related to the terms of this Agreement, including with
respect to any disputes, breaches or enforcement of the terms contained herein, the losing party as determined by a court of
competent jurisdiction or any arbitral authority shall reimburse the prevailing party for any legal and other expenses reasonably incurred
by the prevailing party in connection with such legal proceeding.
12. Nothing in this Agreement, expressed or implied, is intended to confer or does confer on any person or entity other than the parties
hereto or their respective successors and assigns, and to the extent expressly set forth herein, the Indemnified Parties, any rights or
remedies under or by reason of this Agreement or as a result of the services to be rendered by Barclays Capital. hereunder. The
City acknowledges that Barclays Capital has been retained hereunder solely as a financial advisor of the City with respect to any
Transaction and is engaged hereunder as an independent contractor. The City further acknowledges that Barclays Capital is not acting
as an agent of the City or in a fiduciary capacity (whether contractual or extra -contractual) with respect to the City or its stakeholders,
employees, creditors or any other third party and agrees that it shall not make, and hereby waives, any claim based on an assertion
of any such fiduciary capacity. The City agrees that Barclays Capital is not assuming any duties or obligations other than those
expressly set forth in this Agreement.
13. The City acknowledges and agrees that:
(a) Barclays Capital is a full service securities firm engaged in a wide range of businesses and from time to time, in the ordinary
course of its business, Barclays Capital or its affiliates will hold long or short positions and trade or otherwise effect transactions
for their own account or the account of their customers in debt or equity securities or loans (or any derivatives lhereol) of the
companies which may be the subject of the transactions contemplated by this Agreement. Such trading is conducted, of course,
with strict informational barriers in place to protect the confidentiality of client information and in strict compliance with applicable
securities laws. During the course of Barclays Capital engagement with the City, Barclays Capital or its affiliates may have in
their possession material, non-public information regarding other companies that could potentially be relevant to the City or the
transactions contemplated herein but which cannot be shared due to an obligation of confidence to such other companies.
(b) Barclays Capital's research analysts and research departments are independent from Barclays Capital's investment banking division
and are subject to certain regulations and internal policies. Barclays Capital's research analysts may hold and make statements
or investment recommendations and/or publish research reports with respect to the transactions contemplated herein or any
counterparty thereto that differ from or are inconsistent with the views or advice communicated by Barclays Capital's investment
banking division.
(c) Barclays Capital may arrange for all or any of the services to be performed by it hereunder to be performed by any of its
respective direct or indirect holding companies and/or any direct or indirect subsidiaries of Barclays Capital or such holding
companies.
14. The City and Barclays Capital each represent to the other that there is no other person or entity that is entitled to a finder's fee,
brokerage commission or other payment in connection with the transactions contemplated by this Agreement as a result of any
agreement or understanding with it, except for the City's obligation, under certain conditions, to share a portion of its proceeds from
any sale of the Renewable Energy Land with ReNu Resources, a previous owner of the Renewable Energy Land.
15. The term of Barclays Capital's engagement hereunder shall extend from the dale hereof until terminated as set forth below. Subject
to the provisions of paragraphs 3 through 6, 7(c), 8, 10 through 14, 16 and 18, which shall survive any termination of this
Agreement, either party may terminate Barclays Capital's engagement hereunder at any time by giving the other party at least 10 days'
prior written notice.
BARCLAYS
CAPITAL
Page 5 of 6
16. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provisions
of this Agreement, which shall remain in full force and effect. This Agreement may be executed in counterparts, each such
counterpart shall be deemed an original and all such counterparts shall together constitute one instrument.
17. This Agreement contains the entire understanding of the parties hereto relating to the matters set forth herein and supersedes all prior
drafts, correspondences or communications with respect hereto. Upon the effectiveness of this Agreement, this Agreement shall
supersede and replace the prior engagement letter agreement dated as of March 6, 2009 between the City and Barclays Capital ("the
Prior Agreement") except for Sections 7(c), 8, 10 through 14, 16 through 18 which survive termination of the Prior Agreement.
Specifically, and without limitation, Barclays shall be entitled to no further compensation under the Prior Agreement. This Agreement
may not be amended or modified except in writing signed by each of the parties and shall be governed by and construed and
enforced in accordance with the laws of the State of New York. The City and Barclays Capital hereby irrevocably and unconditionally
consent to submit to the exclusive jurisdiction of the courts of the State of New York and of the United Stales District Courts located
in the County of New York for any lawsuits, actions or other proceedings arising out of or relating to this Agreement and agree not
to commence any such lawsuit, action or other proceeding except in such courts. The City further agrees that service of any
process, summons, notice or document by mail to the City's address set forth above shall be effective service of process for any
lawsuit, action or other proceeding brought against the City in any such court. The City and Barclays Capital hereby irrevocably and
unconditionally waive any objection to the laying of venue of any lawsuit, action or other proceeding arising out of or relating to this
Agreement in the courts of the State of New York or the United States District Courts located in the County of New York, and
hereby further irrevocably and unconditionally waive and agree not to plead or claim in any such court that any such lawsuit, action
or other proceeding brought in any such court has been brought in an inconvenient forum. Any right to trial by jury with respect to
any lawsuit, claim or other proceeding arising out of or relating to this Agreement or the services to be rendered by Barclays Capital
hereunder is expressly and irrevocably waived.
18. The City represents and warrants, based upon the advice of the Office of the City Attorney of the City of Vernon, that this
Agreement has been duly and validly authorized, executed and delivered by the City and, assuming due authorization and execution
hereof by Barclays Capital, constitutes a valid, legal and binding obligation of the City enforceable against it in accordance with its
terms. The obligations of the City contained herein, as the context may require, shall be binding upon the City's Council, Council
members, administrators, managers and other officials (collectively, the "City Officials') in each of their official capacities as
representatives of the City. Without independent verification, Barclays Capital shall be entitled to rely on the statements and actions of
the City Administrator as may be reasonable under the circumstances in performing its services hereunder.
[The rest of this page has intentionally been left blank.]
BARCLAYS
CAPITAL
Page 6 of 6
If the foregoing correctly sets forth the understanding and agreement between Barclays Capital and the City, please so indicate in the space
provided for that purpose below, whereupon this letter shall constitute a binding agreement as of the dale first written above.
AGREED:
CITY OF VERNON
Title: City Administrator
ATTEST:
By:
Name: Willard am gush .
Title: City Clerk
APPROVED AS TO FORM:
r-
By:
Na e: Laurence S . Wiener
Title: City Attorney
BARCLAYS CAPITAL INC.
By:
Name: John Lange
Title: Managing Director,
Head of Global Power and Utilities
RECEIVED
MAY 2 0 2010
STAFF REPORT CITY CLERK'S OFFICE
CITY ADMINISTRATION OFFICE
DATE: May 20, 2010
TO: Honorable Mayor and City Coun ,\0 `
��
FROM: Donal O'Callaghan, City Administrator
RE: Barclays Capital
Letter Agreement (Tehachapi Renewable Energy Land)
The attached is a new Agreement between Barclays Capital and the City of Vernon for
the purposes of providing financial advisory services with respect to the sale of the
remaining Tehachapi wind land. This new agreement is specifically for the Tehachapi
wind land transaction and supersedes the previous Barclays Capital Letter Agreement.
No other potential projects are included in this new agreement nor are there any
quarterly fees associated with this new agreement. Fees are paid on closing for this
transaction only and are based on a transaction fee for the total remaining land and an
additional percentage consideration for any dollars gained above the sale price per acre
set by the first phase of the Tehachapi wind land transaction, that is the dollars per acre
received for the Red Rock Project.
Recommendation
It is recommended that City Council approve the attached Letter Agreement with
Barclays Capital at the May 24, 2010 City Council meeting.
DO: rmt
Page 1 of 1
Juarez, Debbie
From: Enomoto, Kristen
Sent: Wednesday, December 08, 2010 4:55 PM
To: Juarez, Debbie
Cc: Yamaguchi, Willard
Subject: Termination of Vernon/Barclay's Contract Dated May 20, 2010
Attachments: Notice of Termination of Vernon-Barclay's Agreement Dated 05-20-10 - Effective 12-18-10.pdf
Debbie,
Fyi for the file. I'm coming by with the original for you to please mail out tomorrow. The cc group has
already been taken care of.
Thanks.
Kristen
From: Enomoto, Kristen
Sent: Wednesday, December 08, 2010 4:30 PM
To: 'John D. Lange'
Cc: CityCouncil; 'DAVID. ROGERS@lw.com'; Underwood, Craig; Whitworth, Mark
Subject: Termination of Vernon/Barclay's Contract Dated May 20, 2010
Mr. Lange,
Please see attached letter. The original will be mailed to you.
Kristen Enomoto
City of Vernon
4305 Santa Fe Avenue
Vernon, CA 90058
Phone: 323-583-8811 Ext. 398
E-mail: kenomoto@ci.vernon.ca.us
12/8/2010
4305 Santa Fe Avenue, Vernon, California 90053
Telephone (323) 583-8811
December 8, 2010
John D. Lange, Managing Director
Head of Global Power & Utilities
Barclays Capital
Investment Banking
745 Seventh Avenue
New York, NY 10019
Dear John:
The purpose of this letter is to give Barclays Capital 10 (ten) days notice from today's date to
terminate the engagement of Barclays Capital under the Letter Agreement for Financial Advisory
Services Regarding the Sale of the Tehachapi Renewable Energy Land (the "Agreement"), dated
May 20, 2016, pursuant to Paragraph 15 of the Agreement.
The City believes the current results of the market interest and offers for this asset are not
commensurate with the value of the property.
Thank you for your attention to this matter.
Sincerely,
Mark C. Whit orth
City Administrator
cc: Vernon City Council
David Rogers, Latham & Watkins LLP
Craig Underwood, BLX Group LLC
Fr,cfusivefy TndustriaC
1 rUr�-�� Page 1 of 1
Juarez, Debbie
From:
Avendano, Veronica on behalf of Montgomery, Mike
Sent:
Monday, August 22, 2011 11:19 AM
To:
'Underwood, Craig'
Cc:
Ie.fresch@comcast. net'
Subject:
Barclays Capital Letter
Attachments: Barclays Capital Letter (Cancellation & Release of COV from Provisions).pdf
All,
Attached please find the letter that will be mailed out to Barclays Capital.
Thank you.
Mike Montgomery
Veronica Avendano
Administrative Assistant
City of Vernon
4305 Santa Fe Avenue
Vernon, CA 90058
(323) 583-8811 Ext. 266
8/22/2011
z R `r4 a
u
.a
x
9x d k #
4305 Santa Fe Avenue, Vernon,; California 90058
Telephone (323) 581S811
August 22, 2011
Mr, John Lange
Managing Director
Head of Global Power, and Utilities
Barclays Capital
745 Seventh Street
New York, NY 10019
Re: Cancellation and Release of the City of Vernon from Provisions of the Letter
Agreement ("the Agreement") with Barclays Capital, dated May20, 2010
Dear Mr, Lange,
I am the Interim City Attorney of the City of Vernon, California. The purpose of this letter is to
confirm the telephone conversation you had concerning,the Agreement, with Craig Underwood
of BLX, Financial Advisor to the City, during the week of August 15 201 1.
This letter confirms Barclays consent to CANCEL, effective as of the date of this letter,
Provision 4 of the Agreement, concerning compensation for services rendered by Barclays
Capital under the Agreement, specifically concerning compensation due Barclays during a period
of '12 months following the effective date of termination of Barclays Capital's engagement under
the Agreement:
Please execute below your, acknowledgement that this letter accurately reflects your
understanding concerning the cancellation of Provision 4 of the Agreement, and return a copy,
Thank you for your consideration and assistance to the City.
Very truly yours, Agreed and Accepted;
Michael . Montgornery ��
Interim City Attorne�� John Lange, ManagingDirector
Global Power
cc; Craig Underwood Barclays Capital.
cfusivefy Industrigf
BARCLAYS
CAPITAL
Page 2 of 6
3. For purposes of this Agreement a "Transaction" shall mean, with respect to the Renewable Energy Land, any transaction or series or
combination of related transactions, other than in the ordinary course of business, whereby, directly or indirectly, a material Interest
(including any economic interests) in, or a material portion of the assets of, such Renewable Energy Land Is sold to, acquired by or
otherwise transferred to a counterparly or countorparlies for cash or any other consideration, Including, without limitation, by means of a
sale or exchange of assets or capital stock, other securities or ownership Interests, a merger or consolidation, a leveraged buy-out, a
minority Investment, the formation of a joint venture or partnership, a dedvalive or hedging transaction or any similar transaction.
4. As compensation for the services rendered by Barclays Capital hereunder, the City agrees as follows:
(a) . If, during the term of Barclays Capital's engagement hereunder or at any time during a period of 12 months following the
effective data of termination of Barclays Capital's engagement hereunder, an agreement to effect a Transaction with respect to the
Renewable Energy Land is entered into or a Transaction with respect to the Renewable Energy Land is consummated, the City
shall pay Barclays Capital an advisory fee with respect to such Transaction as set out in the table below (subject to a minimum
advisory fee of not less than $3.0 million).
Gross sale price up to $3,220 per acre - N $225 per acre
Plus for every additional dollar per acre In excess of gross consideration of 2% of such additional gross consideration
$3,220 per acre 1 per acre in excess of $3,220 per acre
The advisory fee shall be payable .In cash as follows: 100% upon closing of a Transaction with respect to the Renewable
Energy Land.
(b) If discussions regarding a Transaction are terminated or a Transaction does not occurfor any reason whatsoever and the City
and/or any of Its affiliates Is 'paid a break-up, termination or similar fee by the prospective counterparly or any other person in
connection therewith during the term of Barclays Capital's engagement hereunder or in connection with a Transaction for which a
fee would otherwise have been payable pursuant to subparagraph 4(a) above, the City shall pay Barclays Capital, promptly upon
receipt thereof, a tee equal to the lesser of (1) so% of such break-up, lerminallon or similar fees or (11) the amount that would
otherwise have Noon payable by the City to Barclays Capital if such Transaction had been consummated in accordance with its
terms.
(c) Any amounts actually paid by the City pursuant to subparagraph 4(a) shall be creditable once against any fees that subsequently
become payable pursuant to subparagraph 4(b).
S. After considering both the potential conflicts inherent In providing acquisition financing or related services while concurrently providing
sell -side financial advisory services, as well as the potential benefits associated with Barclays Capital providing such acquisition financing
or related services, the City consents to and agrees that, to the extent any prospective counlerparty, to a Transaction requires or Is
contemplating any financing In. order to consummate such Transaction (including, without limitation, any interim or permanent senior or
subordinated debt financing or the sale or placement of any debt or equity securities) or related capital planning and/or dsk
monagemenl services (Including, without limitation, execution of interest rate, foreign exchange, credit and commodities hedging or equity
derivative transactions), Barclays Capital, through Itself and one or more of its affiliates, may offer to such counterparty and participate
in such acquisition financing or related services in respect of such Transaction.
6. The City shall reimburse Barclays Capital; promptly upon request, for any reasonable expenses incurred, however Barclays will require
City approval for any significant professional and legal fees and disbursements.
7. The City shall:
(a) furnish to Barclays Capital the names of all parties with which the City has had discussions or contacts prior to or during the
term of Barclays Capital's engagement hereunder concerning a Transaction; and
(b) make available to Barclays Capital all information concerning the business, assets, liabilities, operations, financial condition and
prospects of lho Renewable Energy Land or the City which Barclays Capital reasonably requests In connection with the
performance of its obligations hereunder. The City shall promptly advise Barclays Capital regarding any material developments or
matters relating to the City, the Renewable Energy Land or which may otherwise affect the Transaction which occur during the
term of Barclays Capital's -engagement hereunder.