Hanford City Council
January 31, 2023

City Council Meeting
Agenda
January 31, 2023
3:30 PM – Special Meeting
Council Chambers
400 N. Douty St.

Council Members will meet in-person in the Council
Chambers. The meeting will also be live streamed on the City’s website: http://livestream.hanford.city/

3:30 PM CALL TO ORDER SPECIAL SESSION:

ROLL CALL BY THE CITY CLERK:

PUBLIC COMMENT:

Comments from the public are limited to items listed on the agenda (GC 54954.3a). A maximum of three minutes is allowed for each speaker. Please begin your comments by stating your name and providing your city of residence.

GENERAL BUSINESS:

A. City Attorney: Approval of a settlement Agreement between Helena Agri-Enterprises, LLC and the City of Hanford.

ADJOURNMENT:

Materials related to an item on this Agenda submitted to the City Council after distribution of the agenda packet are available to public inspection in the City Clerk’s Office located at 319 N. Douty Street, Hanford, California 93230, during normal business hours. Such agendas are also available at the city’s website, www.cityofhanfordca.com subject to staff’s ability to post the agenda before the meeting.

If you need a disability-related modification or accommodation, including auxiliary aids or services, to participate in this meeting, please contact the City Clerk’s office, 559-585-2515, 319 N. Douty Street, Hanford, California 93230, at least 2 days prior to the meeting {28 CFR 35.102.35.104 ADA Title II}

AGENDA

STAFF REPORT
MEETING DATE: 1/31/2023 GENERAL BUSINESS a
SUBJECT: Approval of a settlement Agreement between Helena Agri-Enterprises, LLC and the City of Hanford.

RECOMMENDATION:

Recommendation: It is recommended that the Council, by motion, approve the attached settlement agreement.

Recommended Motion: I move that the Council: (i) approve the settlement agreement attached to the staff report as Exhibit “A”; (ii) authorize and direct the Mayor to execute the settlement agreement on the City’s behalf; and (iii) authorize and direct City staff to carry out the terms of the settlement agreement and take necessary internal financing measures once it is fully executed.

BACKGROUND:

On November 25, 2014, the City and Helena entered into a Memorandum of Understanding (MOU). The MOU was approved by the City Council by a 5-0 vote. The MOU generally contained provisions for the exchange of Helena’s current Lacey Boulevard property for property in the Kings Industrial Park. Further, the MOU contemplated the City paying Helena’s relocation costs to the Industrial Park. The MOU envisioned the parties negotiating and signing a further definitive agreement. During negotiation of definitive agreement terms in 2015, Helena identified its relocation costs as approximately $14.6 million dollars. The parties were unable to negotiate terms and the definitive agreement was never signed.

After a definitive agreement failed to be executed, in 2016 Helena and the City entered into a purchase and sale agreement for Helena’s purchase of the same Industrial Park property. After being in escrow for several months, Helena was ultimately unable to close and the City terminated escrow.

On April 11, 2017, Helena filed a lawsuit in Kings County Superior Court. On June 4, 2018, Helena filed an amended complaint to include breach of the 2016 Purchase Agreement, which included an attorney’s fees provision. Trial was set to begin on February 6, 2023. It was

anticipated that Helena would demand approximately $38 million dollars at trial, not including attorney’s fees, if it were successful at trial.

The City and Helena attended mediation on January 27, 2023. The parties were able to reach a tentative settlement, contingent upon approval by the City Council. The monetary terms of that settlement are as follows:
• The City will pay Helena $7.5 million dollars within thirty (30) days of executing the settlement agreement.
• Additionally, the City will pay Helena $5 million dollars over the course of four years. The payments will be a lump sum of $1.25 million dollars each of the four years. The annual payments will begin on March 1, 2024.

In consideration for the payments described above, Helena will dismiss its current lawsuit against the City with prejudice. The public benefit in approving such settlement is that the City will not be required to expend large amounts of time, effort, and money to take this case to trial, and the matter will be fully and finally resolved for a fixed dollar amount of $12.5 million dollars without risk of a jury award of $38 million dollars plus interest and Helena’s legal fees. The applicable interest rate is 10% per year under state law and could have started to accrue from the time that Helena claimed the City breached.

FISCAL IMPACT:

The City will pay $7.5 million dollars upon the parties’ signature of the Settlement Agreement, and the City will pay $1.25 million dollars each year for four years, starting on March 1, 2024.

Payments will come from General Fund monies. As of the last audited financial statements, the City’s General Fund unrestricted fund balance was approximately $11 million, with less than that of cash on hand.

The City will need to establish an internal note at a recommended term of up to 10 years for up to $7 million of the funding. There currently is $5.5 million of cash in the General Fund Reserve to pay without internal borrowing. Staff has identified the ability to take a loan from other funds with available cash that will allow the City to maintain payments in accordance with the agreement. Staff would recommend a 2.5% interest rate on these internal notes, which is comparable to conservative investment instruments available to the City as of January 2023. This loan may impact the City’s ability to fund major projects while the loan is outstanding. Should the General Fund have fund balance to pay back an internal loan faster than 10 years, Council authorizes staff to direct funding towards the payment before re-establishing the General Fund Reserve.

SETTLEMENT AGREEMENT AND MUTUAL RELEASE
THIS SETTLEMENT AGREEMENT AND MUTUAL RELEASE ("Agreement") is made and entered into by and between CITY OF HANFORD ("City of Hanford"), on the one hand, and Helena Agri-Enterprises, LLC, a Delaware Limited Liability Company, formerly known as Helena Chemical Company, a Delaware Corporation ("Helena"), on the other hand. These entities are collectively referred to as the "Parties" or individually as "Party ."

RECITALS
A. WHEREAS, there is now pending in the Superior Court of California for the County of Kings an action entitled Helena Agri-Enterprises, LLC v. City of Hanford, Case No. 17C0102 (the "Lawsuit"), with regard to the Parties' efforts to relocate Helena's facilities within the City of Hanford since at least 2014. The claims and defenses of the Parties in the Lawsuit are hereinafter referenced as the "Dispute." The Lawsuit was set for a trial to commence on February 6, 2023.

B. WHEREAS, Helena, one of the foremost agricultural and specialty formulators and distributors in the United States, has operated its retail fertilizer facility in the City of Hanford since 1972 generating substantial revenue for the City of Hanford and County of Kings, and providing jobs to residents in the Central Valley.

C. WHEREAS, the City of Hanford and Helena entered into a Memorandum of Understanding/Letter Agreement dated November 25, 2014 ("2014 MOU") relating to relocation of Helena to the Kings Industrial Park ("Industrial Park") located in Hanford, California.

D. WHEREAS, the City of Hanford and Helena entered into a Purchase and Sale Agreement effective December 28, 2016, for Helena's purchase of property owned by the City of Hanford in the Industrial Park ("2016 Contract").

E. WHEREAS, the Successor Agency to the Redevelopment Agency of the City of Hanford ("RDA") and Helena entered into a Purchase and Sale Agreement effective December 28, 2016, for Helena to purchase property owned by the RDA located in the Industrial Park ("2016 RDA Contract").

F. WHEREAS, in the Lawsuit, Helena asserts five (5) claims against the City of Hanford arising out of the above-referenced agreements: Breach of Contract (2014 MOU), Breach of Contract (2016 Agreement), Breach of Covenant of Good Faith and Fair Dealing (2014 MOU), Breach of Covenant of Good Faith and Fair Dealing (2016 Agreement), and Breach ofContract­ Promissory Estoppel (2014 MOU).

G. WHEREAS, on January 27, 2023, the Parties mediated the Dispute before the Honorable Justice Stephen J. Kane (Ret.) in Hanford, California. At the conclusion of the mediation, the Parties agreed to fully settle, release, compromise and forever discharge any and all claims between or among them, arising from or related to the facts and circumstances relating to the development of the Costco Shopping Center, negotiations over Helena relocating to the Industrial Park, the sale of the Industrial Park properties to Helena, and all facts and circumstances relating in any way to the claims and defenses asserted in the Lawsuit.

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NOW, THEREFORE, in consideration of the promises and covenants set forth below, the Parties agree as follows:

SETTLEME NT TERMS

1. Notice of Settlement of Entire Case and Dismissal of Lawsuit (a) Upon the full execution of this Agreement by the Parties, Helena will immediately file a "Notice of Settlement of Entire Case" with the Court, which requests that the Court vacate the February 3, 2023 "final trial readiness conference" and the February 6, 2023 trial date, and that the Court retain jurisdiction under Code of Civil Procedure section 664.6 to enforce terms of this Agreement, as referenced below. (b) Within five (5) business days after Helena's receipt of the City of Hanford's payment set forth in Section 2(a) below, Helena will file a request for dismissal of the entire Lawsuit, with prejudice, with each Party bearing its own attorneys' fees and costs.

2. Settlement Payment and Consideration
(a) For the consideration set forth in this Agreement, on or before February 28, 2023, the City of Hanford shall pay to Helena via wire transfer the initial sum of Seven Million Five Hundred Thousand and no/100 Dollars ($7,500,000.00). (Helena's wire instructions are attached hereto as Exhibit A.)
(b) In addition, for the consideration set forth in this Agreement, the City of Hanford shall make four ( 4) additional payments to Helena via wire transfer as follows: (1) on or before March 1, 2024, the City of Hanford shall pay to Helena the sum of One Million Two Hundred Fifty Thousand and no/100 Dollars ($1,250,000.00); (2) on or before March 1, 2025, the City of Hanford shall pay to Helena the sum of One Million Two Hundred Fifty Thousand and no/100 Dollars ($1,250,000.00); (3) on or before March 1, 2026, the City of Hanford shall pay to Helena the sum of One Million Two Hundred Fifty Thousand and no/100 Dollars ($1,250,000.00); and ( 4) on or before March 1, 2027, the City of Hanford shall pay to Helena the sum of One Million Two Hundred Fifty Thousand and no/100 Dollars ($1,250,000.00). (c) Accordingly, for the consideration set forth in this Agreement, the total payments made by the City of Hanford to Helena shall be Twelve Million Five Hundred Thousand and no/100 Dollars ($12,500,000.00), once all the payments have been made to Helena.

3. Mutual Release of Claims. For the consideration set forth in this Agreement, and effective upon the full execution of this Agreement by the Parties (but expressly not including the City of Hanford's agreed-upon payment obligations to Helena under Section 2(a), 2(b) and 2(c) of this Agreement, which remain due and owing until fully paid), the Parties, on behalf of themselves and their respective assigns, administrators, successors, legatees, representatives, contractors, elected officials, unelected officials, councils, committees, shareholders, members, managers, owners, officers, directors, boards, employees, attorneys, WEST\301614240.3 -2-

insurers, indemnitors, agents, parents, subsidiaries, divisions, operations, licensees, and affiliates, fully release each other, and each other's assigns, administrators, successors, legatees, representatives, contractors, elected officials, unelected officials, councils, committees, shareholders, members, managers, owners, officers, directors, boards, employees, attorneys, insurers, indemnitors, agents, parents, subsidiaries, divisions, operations, licensees, and affiliates, (the "Releasees"), from all claims, demands, fees, costs, monies, liens, interests, debts, causes of action, judgments, settlements and damages of any kind whatsoever, in law or in equity, whether known or unknown, suspected or unsuspected, from the beginning of time until the date of the execution of this Agreement and any and all claims alleged, or which could have been alleged, by any of the Parties regarding the 2014 MOU, the 2016 Contract, the 2016 RDA Contract, or in the Lawsuit, including, without limitation, the defenses set forth in the Lawsuit.

4. Waiyer of Unknown Claims. The Parties acknowledge that they may hereafter discover facts different from, or in addition to, what they know or believe to be true with respect to the matters herein released, and agree that the release provisions set forth herein shall be and remain in effect in all aspects as a complete and general release as to the matters released, notwithstanding any such different or additional facts. The Parties acknowledge that they have been informed of Section 1542 of the Civil Code of the State of California, and do hereby expressly waive and relinquish all rights and benefits which they may have under Section 1542, which reads as follows:

A general release does not extend to claims that the creditor or releasing party does not know or suspect to exist in his or her favor at the time of executing the release and that, if known by him or her, would have materially affected his or her settlement with the debtor or released party.

The Parties waive the provisions of Section 1542 of the California Civil Code or any similar statutes, laws, or principles of any jurisdiction which may apply to this Agreement.

5. Jurisdiction and Venue: Section 664.6 Enforcement. The validity, construction, interpretation and enforcement of this Agreement and its terms and provisions shall be governed by the laws of the State of California. The Parties agree and acknowledge that the Superior Court for the County of Kings, State of California ("Court") shall have jurisdiction over, and be the proper venue for, any disputes arising out of this Agreement. The Parties expressly agree, acknowledge and will jointly request via stipulation that the Court retain jurisdiction to enforce the terms and conditions set forth in this Agreement pursuant to Section 664.6 of California Code of Civil Procedure. (The stipulation is attached hereto as Exhibit B.)

6. Severability. Should any provision of this Agreement require interpretation or construction, the Parties agree that the presumption that a document or agreement is to be interpreted or construed more strictly against the Party who or which prepared such document or agreement, shall not apply. Should any provision of this Agreement be declared or determined to be illegal, invalid, or unenforceable, the validity of the remaining provisions shall not be affected.

7. No Admission of Liability. Res Judicata or Estoppel. This Agreement contains a release of disputed claims. It is understood by all Parties that this Agreement does not constitute an admission of liability, but is entered into solely as and for a compromise settlement of such disputed claims. The Parties also agree that nothing in this Agreement shall be used for any purpose other than the limited disclosure for remedy of any breach of the terms of this Agreement.

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8. No Other Claims. The Parties represent that no other suit, claim, or proceeding has been commenced against the other(s) regarding the any of the claims released herein. If any such suit, claim, or proceeding is discovered, the offending Party, at its sole expense, shall take whatever steps are necessary to resolve the same without any ramifications on the other Parties, and without any cost or action required on the part of the other Parties, to this Agreement.

9. Representations And Warranties. The Parties represent and warrant to each other that this Agreement is made by each of them in reliance upon the following:
(a) That the claims of the Parties and any causes of action or the proceeds thereof that are the subject of this Agreement have not previously been transferred, assigned, or quitclaimed to any person or entity not a party to this Agreement, and no other person or entity has or claims any interest therein or thereto. (b) Each Party to this Agreement is legally competent to execute this Agreement and accepts fully the responsibility therefor. All necessary approvals have been secured and all necessary findings have been made to effectuate this Agreement. (c) The representations, warranties, and covenants of the Parties shall remain in full force and effect and shall survive the payment of the settlement proceeds and the dismissals described herein.

10. Warrantv of Authority. Each person signing this Agreement on behalf of an entity warrants that he or she has authority to bind said entity by signing this Agreement.

11. Further Assurances and Covenant of Good Faith Cooperation. The Parties covenant to, upon the reasonable request by any Party, at any time and from time to time, cooperate reasonably with each other and to take all such further actions, including without limitation the execution and filing of additional instruments or documents, as may be reasonably necessary to carry out the intent, purposes and terms of this Agreement.

12. No Oral Modification; No Waiver. The Parties expressly understand, acknowledge and agree that this Agreement may be modified or rescinded only by a writing signed by each of the Parties hereto or their duly authorized agents. Moreover, the failure of a Party to this Agreement to exercise any right or remedy provided by the Agreement or by law shall not be a waiver of any obligation or right of the Parties, or of any similar default, nor shall it constitute a modification of this Agreement.

13. Fully Integrated Agreement. This Agreement constitutes the entire integratedagreement between the Parties and supersedes any and all other agreements, understandings, negotiations, or discussions, either oral or in writing, express or implied, between them. The Parties acknowledge that no representations, inducements, promises, agreements, or warranties, oral or otherwise, have been made by them, or anyone acting on their behalf, which are not embodied in this Agreement, and that they have not executed this Agreement in reliance on any such representation.

14. Attorneys' Fees and Costs Recoverable. If suit, claim, or proceeding is commenced by any Party hereto concerning this Agreement, or to recover damages for the breach of any of the terms or provisions hereunder, or to enforce any such term or provision or otherwise concerning WEST\301614240 .3 -4-

the rights, duties or obligations of any Party hereunder, the prevailing party in any such suit, claim, or proceeding, in addition to such other relief as may be granted, shall be entitled to any and all attorneys' fees and costs incurred in connection therewith, which shall be fixed in such suit, claim or proceeding, or in a separate claim brought for that purpose.

15. Counterparts. This Agreement may be executed in counterparts by one or more Parties hereto, including via facsimile or PDF counterparts, each of which will be deemed an original, and all of which shall constitute one and the same Agreement, which may be delivered via email and shall be binding and effective on all Parties.

16. Section Headings. The headings of Sections in this Agreement are provided for convenience only and will not affect its construction or interpretation.

17. Parties to Bear Their Own Costs. Except as identified in Section 14 above, each Party hereto will bear their own costs and attorneys' fees incurred in connection with the Lawsuit and the negotiation of this Agreement.

THE UNDERSIGNED HA VE READ THE FOREGOING SETTLEMENT AGREEMENT,

HA VE DISCUSSED THE CONTENTS WITH THEIR RESPECTIVE LEGAL COUNSEL

OR HA VE HAD THE OPPORTUNITY TO DISCUSS THE CONTENTS WITH THEIR

RESPECTIVE LEGAL COUNSEL, AND FULLY UNDERSTAND THE TERMS OF THE SETTLEMENT AGREEMENT, AND ASSENT TO ITS TERMS AND PROVISIONS.

DATED: January_, 2023
DATED: January_, 2023
WES1\3016 14240.3

CITY OF HANFORD
By: ___________ _ ___ __ _
Name: Travis Paden
Title: Ma yor

HELENA AGRI-ENTERPRISES, LLC
By:. ____ ____ _____ _ ___ _
Name: Steven E. Alexander
Title: Vice President
- 5 -

EXHIBIT A

HELENA AGRl·ENTERPRISES, LLC
225 Schilling Blvd., Suite 300
Collierville, Tennessee 38017
Telephone: 901-761-0050
January 30, 2023
RE: Helena Agri-Enterprises, LLC Banking Instructions
To Whom It May Concern:

Listed below are the banking instructions for Helena Agri-Enterprises, LLC main operating account. Please use this information to remit payment via wire or ACH for payments related to Rebates, Refunds, or any other payments not specific to a regular, invoiced order.

Bank Name:

ABA Routing Number:

Account Name:

Account Number:

Please contact me if you have any questions.

Best regards,
µ_s ~
Kaleb S. Reed
Senior Treasury Analyst, CTP
Helena Agri-Enterprises, LLC
reedk @helenaagri.com
(901)537-8615
BNY Mellon
043 000 261
Helena Agri-Enterprises, LLC
008 0987

EXHIBITB

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DLA PI PER LLP (US)

SAN FRANCISCO
MARKE. MCKEEN (SBN 130950)
mark.mckeen @dlapiper.com
EV A K. SCHUELLER (SNB 237886)
Evi.Schueller @us.dla piper.com

DLA PIPER LLP (US)
555 Mission Street, Suite 2400
San Francisco, California 94105-2933
Tel: 415.836.2500
Fax: 415.836.2501
Attorneys for Plaintiff
HELENA AGRI-ENTERPRISES, LLC, a Delaware
limited liability company, formerly known as

HELENA CHEMICAL COMP ANY,
a Delaware corporation

SUPERIOR COURT OF CALIFORNIA

IN AND FOR THE COUNTY OF KINGS
HELENA AGRI-ENTERPRISES, LLC, a
Delaware limited liability company, formerly
known as HELENA CHEMICAL
COMP ANY, a Delaware corporation,
Plaintiff,
vs.

CITY OF HANFORD, a municipal
corporation; and DOES 1-25
Defendants.

WEST\301623219 .2
CASE NO. l 7C0102
STIPULATION AND [PROPOSED] ORDER

RETAINING COURT'S JURISDICTION

PURSUANT TO CODE OF CIVIL
PROCEDURE SECTION 664.6 TO

ENFORCE TERMS OF PARTIES'

SETTLEMENT AGREEMENT
Trial: February 6, 2023
Judge: Hon. Melissa R. D'Morias
Dept.: 7
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STIPULATION AND [PROPOSED] ORDER
CASE NO. 17C0102

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DLA PIPER LLP (US)

SAN FRAN CISCO

STIPULATION AND ORDER
WHEREAS, on or about January 31, 2023, plaintiff Helena Agri-Enterprises , LLC and defendant City of Hanford (together, the "Parties") entered into a written settlement agreement that requires the payment of settlement amounts through March 1, 2027; WHEREAS, the settlement agreement provides that, pursuant to California Code of Civil Procedure section 664.6, the Court shall retain jurisdiction over this case and over the Parties to this case until final performance of the settlement agreement; WHEREAS, the Parties desire to dismiss this case with prejudice as provided in the settlement agreement, provided that the Court retains jurisdiction over this case and the Parties to this case pursuant to California Code of Civil Procedure section 664.6.

IT IS NOW THEREFORE HEREBY STIPULATED by and between the Parties, through their respective counsel of record, that the Court shall retain jurisdiction over this case and the Parties to this case until such time as all settlement amounts have been paid pursuant to the terms of the settlement agreement.

Dated: January 31, 2023
Dated: January 31, 2023
WES1i301623219 .2

DLA PIPER LLP (US)
By 1fuJ_ f . J'A%___
MARKE. MCKEEN
EVA K. SCHUELLER
Attorneys for Plaintiff
HELENA AGRI-ENTERPRISES, LLC, a
Delaware limited liability company, formerly
known as HELENA CHEMICAL COMP ANY,
a Delaware corporation

GRISWOLD, LASALLE, COBB, DOWD & GIN,
By vf/!l, ~ fl._,,
L.L.P. ~
MICHAEL R. JO~
Attorneys for Defendant

CITY OF HANFORD
-2-
STIPULATION AND [PROPOSED] ORDER
CASE NO. 17CO 102

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DLA PrPER LLP (US)

S AN FR ANCISCO
PURSUANT TO STIPULATION, IT IS SO ORDERED.

The Court will retain jurisdiction over this case and the Parties to this case pursuant to California Code of Civil Procedure section 664.6 until such time as all settlement amounts have been paid pursuant to the terms of the Parties' settlement agreement.

WEST\301623219.2
HONORABLE MELISSA R. D'MORIAS
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STIPULATION AND [PROPOSED] ORDER
CASE NO. 17C0102

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DLA PIPER LLP (US)

SAN FRANCISCO

PROOF OF SERVICE
I, the undersigned, declare as follows :

I am employed in the County of San Francisco, State of California. I am over the age of 18 and not a party to the within cause. My business address is DLA Piper LLP (US), 555 Mission Street, Suite 2400, San Francisco , California 94105-2933.

On January 31, 2023, I served a copy of the within document(s):

STIPULATION AND [PROPOSED] ORDER
D
(BY EMAIL) by transmitting via e-mail or electronic transmission the document(s) listed above to the person(s) at the e-mail address( es) set forth below.
(BY U.S. MAIL) by placing the document(s) listed above in a sealed envelope with postage thereon fully prepaid, the United States mail at San Francisco, California addressed as set forth below.

Mario U. Zamora ([email protected])
Michael Johnson ([email protected])
Megan N. Dodd ([email protected])
Griswold , LaSalle, Cobb, Dowd & Gin, LLP
111 E. Seventh Street
Hanford, CA 93230
Tel: (559) 584-6656
Attorneys for Defendant, City of Hanford
I declare under penalty of perjury under the laws of the State of California that the above is true and correct. Executed on January 31, 2023, at San Francisco, California. -4-
WEST\301623219.2
STIPULATION AND [PROPOSED] ORDER
CASE NO. 17C0102

6 7
Jan L. Kahn (SBN 55788)
Rissa A. Stuart (SBN 166459)
Matthew T. Amaro (SBN 277777)

KAHN, SOARES & CONWAY, LLP
219 North Douty Street
Hanford, CA 93230
Phone: (559 ) 584-3337
Fax: (559) 584-3348
Attomeys for Plaintiff
HELENA CHEMICAL COMPANY.
a Delaware Corporation ·
ED
APR t l 2017
(.
lD 8 SUPERIOR COURT OFTHE STATE OF CALIFORNIA
IN AN]) FOR THE COUNTY OF KINGS m
~
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HELENA CHEMICAL COMPANY, a
Delaware Corporation,
Plaintiff,
vs.

CITY OF HANFORD , a rnunicipal
corporation; JUSTIN MENDES; GARY
PANNETT; DAVID AYERS; RUSS CURRY;
FRANCISCO RAMlREZ; and DOES 1-25
De fen dant.

Case No. 17C0102
COMPLAINT FOR SPEClFIC

PERFORMANCE, DAMAGES, AND OTHER

EQUITABLE RELIEF FOR BREACH OF
CONTRACT; BREACH OF COVENANT OF
GOOD FAITH AND FAIR DEALING;

BREACH OF CONTRACT - PROMISSORY

ESTOPPEL
[Civil Code §§ 3300, 3333, 3384]
Unlimited civil case, amount demcmded exceeds
$25,000
Plaintiff , Helena Chemical Company , alleges:

I.

GENERAL ALLEGATIONS COMMON TO ALL CAUSES OF ACTION

1. Plaintiff , Helena Chemical Compan y is a Delaware Corporation , duly licensed to do busi.ness in the State of Califomia , and one of the nation 's forernost agricultural and specialty 25 formulators , and distdbutors , in the United States. Helena has opera ted its retail fertilizer facility 26 ("Facility ") in the City of Hanford since 1972.
27 2. Defendant, City of Hanford , (hereinafler referred to as '<Defendanf' or "City") is a 28 municipal corporation and general law city govemed by the laws of the State of California and is

COMPL AINT

I govemed by the City Council ("Council"), duly elected by voters residing within the jurisdiction of the 2 City (the City and the Council hereinafter referred to collectively herein as "Defendants "). 3 3. Defendants, JUSTIN MENDES ; GARY PANNETT; DAVID A YERS; RUSS CURRY; 4 FRANCISCO RAMIREZ are individuals who areor were at the times mentioned herein, each members 5 ofthe City Council for the City of Hanford, and are sued in said capacity . 6 4. Plaintiff is ignorant of the true names and capacity of defendants sued herein as Does 1 7 through 25 inclusive , and, therefore , sues these defendants by fictitious names . Plaintiff will amend this 8 complaint to allege the true names and capacities when ascertained. Plaintiff is informed and believes 9 and thereon alleges that each of these fictitiously named defendants is responsible in some manner for 10 the acts or omissions alleged in this complaint and Plaintifrs damages were proximately, legally, and 11 foreseeably caused by the acts or omissions of these Defendants. 12 5. Plaintiff is informed and believes and thereon alleges that at all times mentioned herein 13 each Defendant was the agent , servant, and employee of each of the remaining Defendants and was, in 14 doing the acts alleged herein , acting within the full scope of their agency and/or employment and acting 15 with the full knowledge or subsequent ratification of their principals or employers. 16 6. The instant action arises from a contractual dispute between Plaintiff , Helena Chemical 17 Company (hereinafter referred to as "Plaintiff' or "Helena"), and Defendant , City of Hanford , 18 conceming a written agreement entered into by the parties on November 25, 2014, a true and correct 19 copy of which is attached hereto and incorporated herein by this reference as Exhibit "A," (hereinafter 20 referred to as the "Agreement .") Pursuant to the Agreement, the City agreed to acquire Helena's real 21 property located at 8148 E. Lacey Blvd ., Hanford, Califomia (the "Lacey Property") in exchange for 22 an approximately 26.24-acre city-owned parcel located within the K.ings Industrial Park near Houston 23 and 11 th Avenues (the "Kings lndustrial Park Property"). As part of the Agreement, the City agreed 24 to move Helena ' s existing improvements on the Lacey Property to the Kings Industrial Park Property, 25 or, if it was ultimately not feasible to move the existing improvements , the City agreed to construct new 26 improvements at the Kings Industrial Park Property , at the City's sole cost and expense . The City 27 induced Helena to withdraw its pending efforts to expand its facilities at the Lacey Property , where the 28 City had already granted an expansion permit and municipal code amendment related thereto. Then, 2 COMPLAINT

1 after months of discussions culminating in a mutually-developed definitive written agreement, the 2 Hanford City Council decided not to perform the obligations to which the City is bound under the 3 Agreement. Moreover , the City initiated an aggressive plan of action to condemn substantia] portions 4 of the Lacey Property, reversed 1ts approval of critical authorizations for Helena 's expansion and 5 operations , and forced Helena to initiate the instant action to preserve its over-44-year presence in the 6 City of Hanford.
7 7. Legal descriptions of the real properties that are the subject of this acti.on are attached 8 hereto, and incorporated by this reference , as fo1lows:
9 10
] l 8.

Pr()J>er_ty , APN (s)
Lacey Property 014-251-041
Kings lndustrial Park Property 018-242-067; 018-242-077 1Exhibit
B
c
Venue is proper in the County of Kings (the "County ") because Defendant City has its 12 principal place ofbusiness located in this County ; the actions complained of herein occurred within this 13 County; and the real property that is the subject of the instant action is situated in this County. 14 9. Plaintiff has performed any and aH conditions prcccdcnt to filing th.is action and has 15 exhausted any and all administrative rcmedies. PJaintiffcomplied \Nith the requirements ofGovemment 16 Code §911.2 by presenting its claim, as provided under Government Code §915 , on July 6, 2016. 17 Plaintiffs claim was rejected by Defendant City on October 13, 2016. 18 10. Helena has operated the Facility in the City of Hanford since 1972, and has been highly 19 successful in its operations at that Facility. Since 2004 , Helena's business has doubled from just under 20 $15 million to over $30 million, gencrating substantial revenue for the City of Hanford and County of 21 Kings. Helena has numerous locations , in addition to its Hanford location , throughout the State of 22 Califomia , and provides jobs to hundreds of residents throughout the Central Va1ley. 23 24
26 27
28 11. F om1erly located on 11 th A venue in the City of Hanford , Helena mo ved its operations to its present location at the Lacey Property on East Lacey Boulevard , just west of Highway 43, in 2011.

The Lacey Property site was acquired from Souza Enterprises , lnc. , and has been used fora fertilizer business s]nce 1955. The Lacey Property site was, and remains , uniquely suited to accommodate Helena's business operations, given the size of the property , railway access, existing infrastrncture , expandability, and proximity to arterial roads outside the City of Hanford . 3 COMPLAINT

. '
1 12. Upon acquisition of the new site at the Lacey Property , Helena initiated efforts to 2 construct improvements to the site to accommodate its expanding operations , including a 24,650 square 3 foot warehouse for storage of its crop protection and production products , anda 630 square foot office 4 expansion.
5 13. Shortly after the expansions, m 2012, a Fresno-based developer, John Kashian 6 ("Kashian") submitted a proposal to the City for the development of a large, mixed-use development on 7 a 58-acre piece of farmland on East Lacey Boulevard on the northwest comer of Highway 198 and 8 Highway 43, consisting of 498,624 square feet of retail space, including two anchors and several major 9 stores and restaurants , as well as additional space for an apartment complex or more stores (the 1 O "Highway 43/198 Commercial Center Project"). The proposed development would also involve, as 11 is well-publicized , a new Costco Wholesale location . The site for the proposed Highway 43/198 12 Commercial Center Project is directly across the street from Helena's location on the Lacey Property . 13 Plaintiffs are informed and believe, and based on such information and belief allege, that Kashian began 14 to pressure City officials to remove Helena and/or restrict Helena's expansion based on the perceived J 5 incompatibility of Helena 's fertilizer operations with the commercial activities envisioned by the 16 Highway 43/198 Commercial Center Project.
17 14. In 2013, during the process by which Helena sought to obtain City approval for its 18 expansion plans, it is was brought to Helena 's attention that, despite the over 60-year history of use of 19 the si te for fertilizer business , and a number of perrnits issued by the County of Kings that had allowed 20 that type of business to operate there, the site had become a nonconforming use when the city annexed 21 the area in the 1980's, rezoning the area from an industrial zone toa service commercial zone . While, 22 Helena remains able to operate much of its existing business as a grandfathered use under the prior 23 zoning ordinance, further efforts at expansion would require modification of the current zoning 24 ordinance.
25 15. During a meeting between the City and Helena in March 2013 , City Manager Darrel Pyle, 26 noting that Helena provides one ofthe highest tax bases for the City , suggested a possible solution to the 27 zoning issue would be to relocate Helena to the Kings Industrial Park Property. 28 16. In April 2013, City Manager Darrel Pyle reported that the City Council directed the City 4 COMPLAINT

. .

I to work with Helena on a possible relocation plan to the Kings lndustrial Park, and stated that the City 2 was very supportive of discussions to provide Helena with an alternative site to facilitate its continued 3 growth and expansion. These discussions did not, however , ultimately culminate in a finalized plan for 4 Helena's relocation at that time.
5 17. The City instead turned to the issue of Helena' s existing efforts to expand its existing 6 operations at its present site. On November 18, 2014, the Hanford City Council approved a municipal 7 code amendment allowing expansion ofHelena's Facility on East Lacey Boulevard. The Council voted 8 3-2 to approve a municipal code amendment to allow "enclosed storage, blending and sale of bulk and .9 prepackaged dry and liquid fertilizer for retail use" in the city's light industrial zones. The council also 10 approved a permit that would allow Helena's existing operations at its current location to continue 11 without restriction , and to construct its planned 24,650-square-foot warehouse for its expanding 12 operations.
13 18. The developer of the Costco project, Kashian, voiced strong opposition to the Council's 14 approval of Helena's plans to expand its Facility. Following the November 18, 2014 vote, Kashian 15 ordered his engineering finn to stop work on the project, and commented publicly that allowing the 16 agricultural fertilizer retailer to expand would not be compatible with plans to build the 500,000-square- 17 foot Hanford Marketplace shopping center with stores and restaurants. Kashian told the City that 18 progress on the Costco project would remain halted until the City reconsidered its decision to allow 19 Helena to expand its operations at the Lacey Property, and build its new 24,650-square-foot warehouse. 20 19. To appease Kashian's cancerns, so that the proposed Highway 43/198 Commercial 21 Center Project would continue to move forward, the City sought to address Helena's operations at the 22 Lacey Property. The City and Helena again entered discussions concerning relocation of Helena's 23 Facility. These discussions centered on moving Helena from the Lacey Property to a new location at the 24 1, 100-acre city-owned Kings lndustrial Park near Houston and 11 th avenues. 25 20. The Hanford City Council held a special meeting on November 25, 2014 to negotiate an 26 agreement with Helena for its potential relocation. The special meeting culminated in a binding 27 contractual agreement with Helena, embodied in a memorandum of understanding executed the date of 28 the meeting on November 25, 2014 . The Agreement was executed, on behalf of Helena, by Steve 5 COMPLAINT

1 Alexander, Vice President for Helena's western business unit; and, on behalf of the City, by all members 2 of the Council, including Mayor Gary Pannett, Vice Mayor Russ Curry, and Council Members Jim Irwin, 3 Joleen James, Lou Martinez, and City Manager Darrel Pyle. Pursuant to the Agreement, the City agreed 4 to acquire from Helena the Lacey Property in exchange for the Kings Industrial Park Property. The City 5 also agreed to relocate Helena's existing improvements to the new si te and, if not feasible to move, then 6 to construct equivalent new improvements on the new si te at the City' s so le cost and expense. 7 8
9 10
11 12
13 14

21. The Agreement provided, in relevant part, that:

In exchanze for the Helena Provertv. Helena will receive approximately 26.24 acres of real property located in the Kings Industrial Park . . . ... the Citv will cause the relocation of Helena 's Existinz Imvrovements to the extent feasible . The Citv will construct new imvrovements (New Imvrovements) on the City Provertv that are fullv vermitted and eauivalent to the imvrovements that cannot be feasibly relocatedfrom the Helena Property to the City Property.

The Helena Prooertv will be the sole consideration that Helena will vrovide in exchange for the Citv Prover tv. the relocation of Existinz Imvrovements. the obtaining of the required permits, and the construction of the New Jmprovements.

22. The Agreement, which was approved by the City Council in open session and signed by 15 the Mayor, was intended to be binding. The Agreement, after setting forth its material terms and 16 conditions, states: "[i]t is understood and agreed that the terms of this memorandum of understanding, 17 while illustrative of the transactions contemplated by the parties, are binding .. . (italics added)." 18 Moreover, the City and Helena explicitly agreed to "reasonably cooperate with each other in an effort to 19 bring this matter to closure in a timely fashion ... [and to] ... work together to prepare all of the förmal 20 documents and obtain all governmental approvals necessary to accomplish the land exchange 21 contemplated in [the] memorandum of understanding."
22 23. To its detriment, and in reliance upon the Agreement with the City and the Council's 23 representation related thereto, Helena took the following actions: (i) withdrew from further City action, 24 its application, and förmal requests to secure necessary permits and approvals to expand its facilities (as 25 alleged in if l 7 herein-which had been previously approved by the City Council; (ii) ceased further 26 efforts to facilitate the necessary expansion; (iii) did not take advantage of its already approved building 27 permit, and (iv) agreed to move to the new site in the Kings Industrial Park. Helena took these actions 28 only because the City bound itself to perform as set forth in the Agreement. As a result of Helena's 6 COMPLAINT

1 actions in reliance on the Agreement, progress on the Highway 43/198 Commercial Center Project was 2 resumed. Immediately subsequent to securing the Agreement with Helena, the Council voted 5-0 to 3 deny approval of the second reading on Helena' s expansion plans. 4 24. Over the course of the next several months, Helena and the City conducted extensive 5 discussions in a collaborative effort to develop a definitive written agreement embodying the terms set 6 forth in the parties Agreement. The parties were successful in those efforts, and a definitive written 7 agreement (the "Definitive Agreement") was presented to the Council in closed session for execution 8 on or about July 7, 2015. Shortly after the conclusion ofthe meeting, City officials reported to Helena's 9 attomeys that the Council refused to execute the Definitive Agreement. Further, the Council determined 10 the City would not perform its obligations under the Agreement. 11 Il.
12 FIRST CAUSE OF ACTION
13 (Breach o[Contract: Damages Against Defendants)
14 25. Plaintiff incorporates herein by this reference the allegations in Paragraphs 1 through 24 15 above, as though the same were fully set forth herein. 16 26. On November 25, 2014, PlaintiffHelena and Defendant City entered into the Agreement, 17 pursuant to which the City agreed to (a) acquire the Lacey Property from Helena in exchange for the 18 Kings Industrial Park Property; and (b) to relocate Helena's existing improvements to the new site and, 19 if not feasible to move the existing improvements, then to construct equivalent new improvements at the 20 Kings Industrial Park Property at the City's sole cost and expense. The sole consideration to be provided 21 by Helena was the Lacey Property.
22 27. Plaintiff has performed all things necessary on its part to be performed under the 23 Agreement with the City, except for those things the performance of which has been excused by the 24 failure of the Defendants and each of them to perform as herein alleged . 25 28. To date, Defendants have failed and refused to execute the Definitive Agreement 26 prepared through the joint efforts of the parties, and has failed and refused to perform its obligations to 27 exchange the Kings Industrial Park Property for the Lacey Property, and to relocate Helena ' s existing 28 improvements to the new site and/or construct equivalent new improvements on the new site, and is in 7 COMPLAINT

I breach of the Agreement.
2 29. As a proximate result of Defendants, and each of their, breach ofthe Agreement, Plaintiff 3 has been damaged in the sum of an amount to be established according to proof at trial, hut in no event 4 less than $12,000,000.00.
5 III.
6 SECOND CAUSE OF ACTION
7 (Breach o[Contract: Specific Performance o[Contract Against De{endant City o[Hanforef) 8 30. Plaintiff incorporates herein by this reference the allegations in Paragraphs 1 through 29 9 above, as though the same were fully set forth herein. 10 31. Plaintiffs remedy in damages or in an action at law for this breach of Defendants' and 11 each of their duties under the Agreement is inadequate to protect Plaintifr s right to the Kings Industrial 12 Park Property, and for relocation of Helena's existing improvements to the new site. The Kings 13 Industrial Park Property is uniquely suited to Helena's purposes in continuing to operate and expand the 14 operations of its Hanford facilities. It isa well-settled principle in the courts ofthis State that, in general, 15 the legal remedy of damages is inadequate in all agreements for the sale or letting of land. (See e.g. 16 Wilkison v. Wiederkehr (2002) 101Cal.App.4th822, 830; Civil Code §3387.) 17 32. The consideration set forth in the Agreement, as alleged hereinabove, is adequate as to 18 the Defendant, and is fair and reasonable. Not only would the City receive Helena's property in an area 19 marked for substantial commercial development and expansion, hut the removal of Helena from the area 20 has proven essential to the continued progress of the Highway 43/198 Commercial Center Project, most 21 specifically the Costco Project.
22 33. Plaintiff has performed all conditions, covenants, and promises that it is required to 23 perform, in accordance with the terms ofthe Agreement, except that it has not yet executed the Definitive 24 Agreement, nor transferred title to the Lacey Property , because Defendant failed to execute the Definitive 25 Agreement and perform its obligations to transfer the Kings lndustrial Park Property and relocate 26 Helena' s improvements. Plaintiff remains ready, willing, and able to perform all remaining terms and 27 conditions of the Agreement that it is required to perform, and has offered, and continues to offer, to do 28 so.
8 COMPLAINT

1 34. Defendant has failed and refused , and continues to fail and refuse, to perform the 2 conditions of the Agreement on its part , in that Defendant has refused to execute the Definitive 3 Agreement , and perform its obligations to relocate Helena and its improvements to Kings Industrial Park, 4 in exchange for the Helena Property. Rather, the City, in promoting Costco , has used condemnation to 5 deprive Helena of its property and refuses to perf orm as per the Agreement. 6 ~
7 THIRD CAUSE OF ACTION
8 (Breach o[Covenant o(Good Faith and Fair DealingAgain st Defendants) 9 35. Plaintiff incorporates herein by this reference the allegations in Paragraphs 1 through 34 1 O above, as though the same were fully set forth herein . 11 36. In the discussions leading up to the execution of the Agreement, Defendants represented 12 to Plaintiff that Defendants were supportive of a plan to move Helena to the Kings lndustrial Park . This 13 was Defendants proposal. Less than one week before the Agreement was executed , the Highway 43/198 14 Commercial Center Project developer put the project on hold as a consequence of Helena having 15 successfully appealed and been granted approval for its expansion plans at the Lacey Property . It isa 16 well-publicized fäet that the Highway 431198 Commercial Center Project developer was not willing to 17 proceed with the project if Helena was allowed by Defendants to remain, operate, and expand at the 18 Lacey Property . It is for this reason that Defendants induced Helena to withdraw further efforts to 19 expand at the Lacey Property location by presenting the proposal to move Helena to the Kings Industrial 20 Park, and executing a binding written agreement to carry out the relocation . 21 37. Plaintiff was initially reticent to proceed with the Agreement, in light of the probable cost 22 issues related to relocation of Plaintiff , but after multiple discussions conceming estimates provided by 23 Plaintiff, Defendants provided assurances to Plaintiff that they would be able to perform their obligations 24 under the Agreement, and Plaintiff was, in reliance on those assurances , willing to proceed. 25 38. Plaintiff is informed and believes , and based on such information and belief alleges that, 26 at the time ofthe above-described discussions , Defendants knew, or should have known , that Defendants 27 were unwiUing to execute the Definitive Agreement , and Defendants were unwilling to perform what it 28 had promised. Defendants , and each of them , nevertheless continued to misrepresent their willingness 9 COMPLATNT

1 to relocate Helena according to the terms of the Agreement. 2 39. After Plaintiff Helena withdrew its previously approved application and förmal requests 3 from further City action to formally secure authorizations for its expansions plans , ceased further efforts 4 to facilitate its necessary expansion, did not take advantage of its already approved building permit , and 5 agreed to move to the new site in the Kings Industrial Park, and the Costco Project was proceeding 6 forward, Defendants , and each of them, simply refused to perform their obligations under the Agreement, 7 declining to execute the Definitive Agreement prepared through the joint efforts of the parties . The City 8 subsequently denied approvals of the second reading on Helena's expansion plans , and moved forward, 9 instead, on an aggressive plan of action to restrict and impede Helena 's existing operations at the Lacey 10 Property . Defendants , and each of them , by those actions, effectively made it impossible for Helena to 11 continue with its formerly approved plans for expansion, and has imposed substantial impediments 12 against Helena's continued use ofthe Lacey Property for its fertilizer business. In acting in the manner 13 described in this Paragraph, Defendant violated the implied covenant of good faith and fair dealing that 14 exists in the contract between Plaintiff and Defendants. 15 40. Plaintiff has performed all conditions, covenants, and promises required on Plaintiffs 16 part to be performed in accordance with the terms and conditions of the contract, and has expended 17 substantial sums in good faith participation and cooperation with the City in carrying out the terms of 18 their binding Agreement.
19 41. As a result of Defendants, and each of their, breach of the covenant of good faith and fair 20 dealing, Plaintiff has suff ered damages in an amount according to proof to be established at trial, but in 21 no event , less than the sum of$12,000,000 .00.
22 V.
23 FOURTH CAUSE OF ACTION
24 (Breach o[Conlract : Promissory Estoppe/ Against De(endants) 25 42. Plaintiff incorporates herein by this reference the allegations in Paragraphs 1 through 41 26 above, as though the same were fully set forth herein. 27 43. By way of its conduct described in Paragraphs 19 - 22, 24, 26, and 36 - 37, above, 28 Defendants promised, assured, and represented to Plaintiff that Defendants would perform the City's 10 COMPLAINT

obligations under its Agreement with Helena to acquire from Helena the Lacey Property in exchange for 2 the Kings lndustrial Park Property, and to relocate Helena's existing improvements to the new site and, 3 if not feasible to move, then to construct equivalent new improvements on the new site at the City's sole 4 cost and expense.
5 44. In so doing, Defendants knew or should have known that Plaintiff would be reasonably 6 induced to rely on Defendants' promise, assurances and representations by Defendants as described in 7 Paragraphs 19 - 22, 24, 26, and 36 - 37, above.
8 45. Plaintiff reasonably relied on the Defendants' promises, assurances or representations 9 described in Paragraphs 19-22, 24, 26, and 36 - 37, above, and was induced to take the actions described 10 in Paragraph 23 and 39 above, and to participate, at significant cost, in extensive discussions in a 11 collaborative effort to develop a definitive written agreement embodying the terms set forth in the 12 parties' Agreement, as alleged in Paragraph 24 above . 13 14

46. 47.

Defendants have not performed any part of its promises, assurances and representations.

As a proximate result of Defendants' failure to perform according to the promises, 15 assurances, and representations that it made to Plaintiff, Plaintiff has been damaged in the sum of an 16 amount to be established according to proof at trial. 17 48. Injustice can be avoided only by enforcing Defendants' promtses, assurance and 18 representations completely.
19 CONCLUSION
20 49. The Agreement clearly shows a "meeting of the minds" in the recitation of the most 21 important term to establish any contract, to wit: consideration . All that was left to be addressed in a 22 subsequent förmal writing was an outline of the procedures for the City's payrnent and timing of 23 construction. The obligations of City and Helena under the Agreement are clearly defined. The position 24 taken by the City Council with respect to its duties and obligations under the Agreement, simply put, is 25 a clear breach of contract, and Helena is entitled to the relief requested therefrom. 26 WHEREFORE, Plaintiff prays for judgement against Defendant as follows:
27 1. For compensatory damages, in an amount according to proofto be established at trial, but 28 in no event less than $12,000,000.00;
11 COMPLAINT

1 2. That Defendant be ordered to transfer the Kings lndustrial Park Property, and to relocate 2 Plaintiff's exiting improvements to the new si te at the Kings Industrial Park Property, and if not possible 3 to relocate the existing improvements, to build equivalent new improvements at the new site; 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 3.

4. For costs of suit incurred herein; and
For such other and further relief as the Court may deem proper.

DA TE: lp:il 11, 2017
F:\WORD\7\57050 .11\Complaint 4-11-17.docx

KAHN, SOARES & CONWAY, LLP
J)_
JANL.

RISSA A TUART
MA TTHEW T. AMARO
Attomeys for Plaintiff,

HELENA CHEMICAL COMPANY
12 COMPLAINT

1. INDEX
2 3 Description Location Page
4 Written Agreement Exhibit A 14
5 Lacey Property description Exhibit B 17
6 Kings Industrial Property description Exhibit C 19
7 8
9 10
11 12
13 14
15 16
17 18
19 20
21 22
23 24
25 26
27 28
13 COMPLAINT

EXHIBIT A
14

~;yHANFORD
CAUFORNIA . 93;J30 .

CITY OFflCES 3t9 NORTH DOUTY STREET
November 25, 2014
Mr. Steven E. Alexander. Vice President
HELENA ~HEJvfICAL COMPANY
7576 N. lngram Ave.

Fresno. CA 93711
R.e! g 148 E.. Lacey Blvd.

Dear Mr. Alexander:
:NA"«lR
OllftY~
111Q!~
~·~
I.
~
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The City of Hanford (City) wish.es to acquire Helena Chemical Company's real property located at 8148 E. Lacey Btvd., Hanford {Helena Property). In exchange forthe Helena Property, Helena will receive approximately 26.2.4 acres of real prQperty located in the Kings Industrial Park (Kings County AflNs 01 s..:242-067 and 077) (City Property).

1.be City acknowledges that the f!elena Property i~ jmproved (E~isdng Improvements).

Ås p~rt ofthe land excbange desciibed herein, the City wiU cause the relocatfon ofHelena's · Bxisting fmpttWem((nts tQ the extent f~ible. The City will construct new improvements (New Improvements) on the City Property that ar~ fully permitted and equivalent to the imptovements tltf!.t cailn<>t be feasibly relocated frQrti thc Helena Property to the City Property. The New lmprovements will comply with then current local, state or federal Jaws to obtain any and all necessary pennits to operate For example, Ule Helen~ Property currently has as part of its improvqnents tWQ concret.e domes, and the improvements that the City will cause to be consttueted on the City Property will include an equivalent tmtount of bulk dry fertUizet storage.

Relocation of jmpr,ovements and construction of the New Improvements will occur at no cost to He~~na; provided howev~r. ifHelena desires to expancl or upgrade beyond tbe scope ofthe Existing lmprovement!» Helena wiil do so at its so1e cosl Upon the relocation of Helena•s Existing lmprovements, to the extent feasible, ahd completion of tbc New Improvements. and contingent upon Helena receMng all necessary l<lcal. · state and federal pemtits. for Hele'1a to operl\te on the City Property, Helena will convey the Helena Property to the City or tbe City's assignee, and the City wiU cause title to thc City Property to be oonveyed to Helena. The Helena Property will be the solc consideration that Helena wiU provide in exchango for the City Property, the relocatlon of Existing fmptovenients, the obtaining ofthe requited pennits, and the construction ofthe New lmprovements.

ADMINISTRATION 559-585-2515 • PitRSONNEL. 559-585-252.0 t FACSIMIU:: 555>S85-259S 15

Since multiple issues must be addrcsscd in order to facilitate the land exchange, inch.iding, without )imitation, ~h party cooducling due diligence efforts with respeet to the other's property and preparation ofplans for Helena's facility thal y.till be constructed 0"1 the City Property with Hclena's approval, the City and Helena will rcasonably coopcrate with eac:ih other in an eflOrt to bring this matter to closure in a timely fashion. The City and Helena wm also worlc togcthcr to preparc all of the fonnal documents and obtain all govemmcntal approvals necc:Ssary to accomplish the land exchange colltemplated in this rnemonmdum ofunderstanding.

It is undcrstood and agreed that the terms ofthis memorandum Qfunderstandina, whi)e illustrativc of the transactions contemplatcd by the parties, arc binding and that thc transaction described herein shall be contingcnt upon the execution of a definitive agrcement that is agrccd upon in writing by the parties, and contingent upon receipt of all corporate approvals.

If the terms and conditiorts ofthis memorandum of understanding mcet with Helena's approval, please sign and date below.

Sincerely,

CITY OF HANFORD
By. . ~);(()
~~ '
Mayor
Enclosure
cc: Russ Cuny, Vice Mayor
Jim Irwln. Councilmcmber
Jolccn James, Councilrnember
Lou Martincz, Councilmembcr
Darrel Pylc, City Manager
Helena Chemlcal Company, a Delaware corporation, hereby agrees to the terms of this memorandum of understanding. ·

HELENA CHEMICAL COMPANY
By: A6. [~_
' STEVEN E.iEXANDER
Vice President
C:\UKlsYdlclo.OLCocnoc&l.tap\Shlrfcy Fllcs\My Docume1ts\R WGwpS l\DATA\AOREEMF.N\Cit) of HantanNfelma\l014.l l.l5 1-1 A,crlaMnt (R.vised 10 rdlect concct APN.doc
16

EXHIBITB
11 I

EXHIBITB
Lacey Property Legal Description

THE LAND REFERRED TO HEREIN IS SITUATED IN THE COUNTY OF KINGS, STATE OF CALIFORNIA , AND IS DESCRJBED AS FOLLOWS:

Parce I 2 of Parce I Map ( of a portion of the West 5 8 acres of the South half of the Southeast quarter of Section 29, Township 18 South, Range 22 East, Mount Diablo Base and Meridian, in the City of Hanford, County of Kings, State of California , according to the Official Plat thereof, lying South ofthe South line of the Southem Pacific Railway Co., right of way) as shown on map filed Book 6, Page 58 of Maps, in the office of the County Recorder of said County.

EXCEPTING THEREFROM a life estate in and to one-half of all oil, gas, minerals and mineral rights in and under said land as reserved in the Deed from Edith M. Starr to Thomas W. Wright and wife, dated December 1, 1955 and recorded January 13, 1956, InstrumentNo . 429, in Book 636, Page 88, Official Records.

APN: 014-251-041
18

EXHIBITC
19

EXHIBITC
Kings lndustrial Park Property Legal Description
PARCEL3
That portion of the Southwcst qum1er of Swtlon 13, Townshlp 19 Soulh, Range 21 Bast, Mount Dlablo Baao md Morldian, In tho CityofHanfbrd, County ofKJngs, StatoofCaHfomla, dosorlbod l!S folloWBi .

CorrunenoJng at 1hc Southo1Bt oomcsr of sald Southwciat q11art01· of Seotlon l3j.

Thcmoo, North Ol0 25'53°Bast, a!ong the EaatUna ofaald Southwcstquartcr, 1803.'.JS feet; ~rhcnoo, Norlh 89~53 'ssu West, parallel wJth lhB Norlh Uno of emd Southwoat quarter, so.o 1 tbot, mo1·0 or l~s, to tho Nw1boast oomel'of ParcolD ofParosl Map No. 11--101 KingB CountyReoorda; Thonoo, contlaulng North 89°S3'58n West. along sald North llne of Parcel D, 1862.00 feot, to tho Northwest comer of eaid Percal P. said poJnt 1110 boJng lho Nolihcast oomcr of Parool C of eald .

Parool Map No. 11 .. 1 O, and lho TRUB POJNr OP BBGINNJNO; Thcnco, oontlu.\llng North89°53'58" We.st, along tho North Jino of seld Puool C, 676.54 fcot, to 'tho Northweat oorncr of sald Paroel C and a polnt on th" Båst rlght of ~ Uno of 11 th A veoua; 'f.henon, Bouth 01°2812011 West, elongtho Westlinoofsald Pw:ool C and sald Bast rlghtcfway llnD, S'J.9.61 feet;
Thonco, Bouih 89°53'58'•Baat~ parallol wlth tboNorth Une ofaaidPftl'ool C, 676.54 fbo~ toa polnt on thc ll88t llno of B1lid Petcol C;
'.f:henco, Norlh 01°2812011 Best, fllo.ng ;udd Ba.st line, 529.61 feot, to thc TRUB POINT OF BBGINNINCJ.
l1awel 3 contalns B.22 aoros
[ continued on next page]
20

PARCEL4
That portion ofthe Soulhweat qumor ofSeolion 13 .. TowJUh.lp 19 So\tth, Rangc 21 Baal, Mount Diablo Baso and Mcridian1 in tho City of Henfont, Counly of!Gnga, State of Califomle, deaorlbsd as toJlows;
Commo.ncm8 .at tho Soutl1cut QOntet of sald Southwest quarter of Sootion 13; Th.cncc, North 01°26'53" &st, along tho Balt lineofsatd Southweat quarter11 l803.3S fcet; Thenoe, North s9ci53•ssu Wcat,parallel wlth tho Nortb llno ofsaidSouth~tquarter, SO.OJ feo~ moreorlesa, to tltDNorth~asl oomorof Pmo~I D of ParoolMap No. J 1~10, X<:lngs County~a; Thcnce, oontJnuing North 89°53' .58" Woat, along 1ald North Unc of Parccl D, 1862.00 feot, to 1hc NorthwMl oomer of sold Parccl D, sald polnt also belng tha NOitheast oomer of Paroel C of mdd Parocl Map No. 11~10;
1'h.enoe, oontJnulng North 89°53 '58" Wcst, aloug thc North Uno of said Parcol C1 676. 54 feet, to tha Nortbwest oomcr of sald l'arccl C blld a potnt on the Bast rlght of way Hne of t l th Avenuo; .

Thence, South 01°28 '20'' West, along tho Wast lina ot sald Paroel C and aald Bast rlght of way lin4S, 529,61 teet, lo theTllUB POINT OFBBGJNNING;
'Ihonoe. ooutlnulng South 01628'20° Woat, along tho Wesl Uno of 1ald Parool c .. and along tllCI W ast lina of sald Parocl D and aald Bast right of way lins, 497.67 teet, ta tbo beginnlng of a tangent onm, conoavoNo.rtheuterly, bavl.ng a radlua of 30.00 feet; · Thence, Southcasterly, alo.ng sald 30.00 foot radlus ourve, through a oentral angle of 91°15'25", an aro diatanco of 47,78 f'ect;
Thonco. South 89°47'05" Ebst, pttrallcl with tllc South lfnc of ziaid Soulbwost quamr of Swtlon 131 n dlstanoo of 645.84 fäet, to U10 lntorscoUon wlth tho Southerty prolongation of the Buat. Jlno of uld Parce] C;
Thm~ No11h 01°28'20" Bnst, along sald Southcrly prolqngation and said Bast Uno, 529.69 &ot; Thcnao, North 89°53158" Wea~ paf8llul wltb thc No111i Uno of aald Parce) C, a diatancc of 616,54 feet, to tho T.R.UB POlNT OP BBOINNINO.

Pa.rcel 4 oontaina 8.21 eorca
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21

•
PARCEL9
Thatportion oftheSouthwest querterofSection l~, Townshlp 19 Soufh.Raqge21 East1 Mount Diablo BMe and Meridim, in thc City of Hanford, County of Kings, Stele ofCalifomia, describcd esfollows;
Commencing at the Southwest comer of said Southwest quarter of Section 13; Thence, North 01°28'20" Bast, elongthe WeJt line ri sald Southwestquerter, 71.77 feet; Thence, at right engles, South88°31'40" Bast, 50.00 feet, toa point on theEast rlght ofway line of 1 Ith Ave.nue and the TRUB POJNT OF BEGJNNJNG;
Thence, North 01 °28
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1 ~ along said Bast right of way line, 572.14 feet, lo thc beginning of a tangmt curve, concave Southeasterly, having a radius of30.00 feet; Thence, NortheMterly, along said 30.00 foot radius curve, through a central angle of88°44'35u, an erc distance of 46.47 feet;
Thence, South 89°47
1 05., Bast, parallel wlth the South line of said Southwest quarter, 647 .16 feet Ttr.ncc, South 01 °28 '20" Wem., parallel with the W estline of said Southwest quarter, 6311 S fee~ toa point on lhc Norlhright of way line ofldaho Avenue; Thencc. South 89°47'051.1 EMt, along said North rlght of way lim; 645.84 feet, to the boginning of a tangent c\l'Ve, concaveNortheaslt2'ly, having a radiUJ of30.00 fect; Thence, Northwesterly, along said 30.00 föot radius curve, through a cmtral engle of91°1 S'lS", an aro distance of lf/.78 fee~ to the TRUBPOINT OF BBGINNING; Paroel 9 contains 9 .8 l acres
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MAY 1 7 2017
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I

PLAINTIFF HELENA AGRI-ENTERPRISES, LLC’S FIRST AMENDED COMPLAINT WEST\280604838.2
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MARK E. MCKEEN (SBN 130950)
JULIA BRIGHTON (SBN 280418)

DLA PIPER LLP (US)
555 Mission Street, Suite 2400
San Francisco, California 94105-2933
Tel: 415.836.2500
Fax: 415.836.2501
Attorneys for Plaintiff
HELENA AGRI-ENTERPRISES, LLC, a
Delaware limited liability company, formerly
known as HELENA CHEMICAL COMPANY,
a Delaware corporation

SUPERIOR COURT OF THE STATE OF CALIFORNIA

IN AND FOR THE COUNTY OF KINGS
HELENA AGRI-ENTERPRISES, LLC, a
Delaware limited liability company, formerly
known as HELENA CHEMICAL COMPANY,
a Delaware corporation,
Plaintiff,
vs.

CITY OF HANFORD, a municipal corporation;
JUSTIN MENDES; GARY PANNETT;
DAVID AYERS; RUSS CURRY;
FRANCISCO RAMIREZ; SUE SORENSON;
MARTIN DEVINE; DARREL PYLE; and
DOES 1-25
Defendants.

Case No. 17C0102

FIRST AMENDED COMPLAINT FOR
DAMAGES FOR BREACH OF CONTRACT;

BREACH OF COVENANT OF GOOD FAITH
AND FAIR DEALING; BREACH OF
CONTRACT – PROMISSORY ESTOPPEL
Unlimited civil case, amount demanded exceeds
$25,000
Michelle S. Martinez, Clerk of Court
County of Kings
6/4/2018 8:50 AM
FILED
Superior Court of the State of California

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Plaintiff, Helena Agri-Enterprises, LLC, alleges:

I.

GENERAL ALLEGATIONS COMMON TO ALL CAUSES OF ACTION

1. Plaintiff Helena Agri-Enterprises, LLC (“Plaintiff” or “Helena”) is a Delaware limited liability company, formerly known as Helena Chemical Company, a Delaware corporation, duly licensed to do business in the State of California, and one of the nation’s foremost agricultural and specialty formulators and distributors in the United States. Helena has operated its retail fertilizer facility (“Facility”) in the City of Hanford since 1972.

2. Defendant City of Hanford (“Defendant” or “City”) is a municipal corporation and general law city governed by the laws of the State of California and is governed by the City Council (“Council”), duly elected by voters residing within the jurisdiction of the City (hereinafter, the City and the Council are referred to collectively as “Defendants”).

3. Defendants Justin Mendes, Gary Pannett, David Ayers, Russ Curry, Francisco Ramirez, Sue Sorenson, Martin Devine, and Darrel Pyle are individuals who are or were at the times mentioned herein, each members or former members of the City Council for the City of Hanford, and are sued in said capacity.

4. Plaintiff is ignorant of the true names and capacities of defendants sued herein as Does 1 through 25 inclusive, and, therefore, sues these defendants by fictitious names. Plaintiff will further amend this First Amended Complaint to allege the true names and capacities when ascertained.

Plaintiff is informed and believes and thereon alleges that each of these fictitiously named defendants is responsible in some manner for the acts or omissions alleged in this complaint and Plaintiff’s damages were proximately, legally, and foreseeably caused by the acts or omissions of these Defendants.

5. Plaintiff is informed and believes and thereon alleges that at all times mentioned herein each Defendant was the agent, servant, and employee of each of the remaining Defendants and was, in doing the acts alleged herein, acting within the full scope of their agency and/or employment and acting with the full knowledge or subsequent ratification of their principals or employers.

6. This First Amended Complaint arises from two contractual disputes between Plaintiff

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Helena and Defendant City concerning (1) written agreements entered into by the parties dated November 25, 2014 (the “2014 Purchase Agreement”), and (2) written agreements entered into by the parties dated December 28, 2016 (the “2016 Purchase Agreement”).

7. Pursuant to the 2014 Purchase Agreement, the City agreed to acquire Helena’s real property located at 8148 E. Lacey Blvd., Hanford, California (the “Lacey Property”) in exchange for an approximately 26.24-acre City-owned parcel located within the Kings Industrial Park near Houston and 11th Avenues (the “Kings Industrial Park Property”). As part of the 2014 Purchase Agreement, the City agreed to move Helena’s existing improvements on the Lacey Property to the Kings Industrial Park Property, or, if it was ultimately not feasible to move the existing improvements, the City agreed to construct new improvements at the Kings Industrial Park Property, at the City’s sole cost and expense. The City induced Helena to withdraw its pending efforts to expand its facilities at the Lacey Property, where the City had already granted an expansion permit and municipal code amendment related thereto. Then, after months of discussions culminating in a mutually-developed definitive written agreement, the Hanford City Council decided not to perform the obligations to which the City is bound under the 2014 Purchase Agreement. Moreover, the City initiated an aggressive plan of action to condemn substantial portions of the Lacey Property, reversed its approval of critical authorizations for Helena’s expansion and operations, and forced Helena to initiate the original Complaint filed April 11, 2017 to recover damages caused by the City’s actions.

8. Pursuant to the 2016 Purchase Agreement, the City agreed to sell to Helena a 16.43 acre parcel located within the Kings Industrial Park near the intersection of Houston Avenue and 11 th Avenue (the “New Kings Industrial Park Property”), for the purchase price of $660,000.00. In a separate but related transaction, Helena was to acquire a 9.81 acre parcel held by the Successor Agency to the Community Redevelopment Agency of the City of Hanford for the purchase price of $392,400.00, with the closing of that transaction to occur simultaneously with, and contingent upon, the closing of the escrow for the New Kings Industrial Park Property. On or about August 2, 2017, the City improperly attempted to terminate or cancel the escrow regarding the 2016 Purchase Agreement.

Specifically, following the original close of escrow date of April 7, 2017, and during the months of April, May, June, and July 2017, Helena diligently and jointly worked with the City (and First

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American Title) in good faith to close escrow; and, on June 29, 2017, the City advised First American Title to prepare Amended/Supplemental Escrow Instructions whereby the closing date would be extended, with exercise of options, through October 30, 2017 in order to resolve “a few” final issues.

On July 18, 2017, the City Manager informed Helena that the City was “extending escrow to finalize rail operational stuff.” However, the very next day, July 19, 2017 at 10:19 p.m., and without warning, the City stated it was only willing to extend the closing deadline on the condition that Helena dismissed its pending lawsuit regarding the 2014 Purchase Agreement and agreed not to pursue litigation in the future with respect to said Agreement. When Helena was unwilling to waive the claims set forth in its existing Complaint (and as preserved in Section 9(e) of the Purchase Agreement), on August 2, 2017, the City delivered a letter to First American Title unilaterally instructing it to “cancel escrow and to refund Helena’s deposit.”

9. Venue is proper in the County of Kings (the “County”) because Defendant City has its principal place of business located in this County; the actions complained of herein occurred within this County; and the real property that is the subject of the First Amended Complaint is situated in this County.

10. Plaintiff Helena has performed any and all conditions precedent to filing this First Amended Complaint and has exhausted any and all administrative remedies. Regarding the 2014 Purchase Agreement, on July 6, 2016, Plaintiff complied with the requirements of Government Code section 911.2 by presenting its claim, as provided under Government Code section 915; on October 13, 2016, Plaintiff’s “first” claim was rejected by Defendant City. Regarding the 2016 Purchase Agreement, on November 13, 2017, Plaintiff complied with the requirements of Government Code section 911.2 by presenting its claim, as provided under Government Code section 915; on December 7, 2017, Plaintiff’s “second” claim was rejected by Defendant City.

11. Helena has operated the Facility in the City of Hanford since 1972, and has been highly successful in its operations at that Facility. Since 2004, Helena’s business has doubled from just under $15 million to over $30 million, generating substantial revenue for the City of Hanford and County of Kings. Helena has numerous locations, in addition to its Hanford location, throughout the State of California, and provides jobs to hundreds of residents throughout the Central Valley.

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12. Formerly located on 11th Avenue in the City of Hanford, Helena moved its operations to its present location at the Lacey Property on East Lacey Boulevard, just west of Highway 43, in 2011. The Lacey Property site was acquired from Souza Enterprises, Inc., and has been used for a fertilizer business since 1955. The Lacey Property site was, and remains, uniquely suited to accommodate Helena’s business operations, given the size of the property, railway access, existing infrastructure, expandability, and proximity to arterial roads outside the City of Hanford.

13. Regarding to its 2014 Purchase Agreement claim, upon acquisition of the new site at the Lacey Property, Helena initiated efforts to construct improvements to the site to accommodate its expanding operations, including a 24,650 square foot warehouse for storage of its crop protection and production products, and a 630 square foot office expansion.

14. Shortly after the expansions, in 2012, a Fresno-based developer, John Kashian (“Kashian”) submitted a proposal to the City for the development of a large, mixed-use development on a 58-acre piece of farmland on East Lacey Boulevard on the northwest corner of Highway 198 and Highway 43, consisting of 498,624 square feet of retail space, including two anchors and several major stores and restaurants, as well as additional space for an apartment complex or more stores (the “Highway 43/198 Commercial Center Project”). The proposed development would also involve, as was well-publicized, a new Costco Wholesale location. The site for the proposed Highway 43/198 Commercial Center Project was directly across the street from Helena’s location on the Lacey Property. Plaintiffs are informed and believe, and based on such information and belief allege, that Kashian pressured City officials to remove Helena and/or restrict Helena’s expansion based on the perceived incompatibility of Helena’s fertilizer operations with the commercial activities envisioned by the Highway 43/198 Commercial Center Project.

15. In 2013, during the process by which Helena sought to obtain City approval for its expansion plans, it is was brought to Helena’s attention that, despite the over 60-year history of use of the site for fertilizer business, and a number of permits issued by the County of Kings that had allowed that type of business to operate there, the site had become a nonconforming use when the City annexed the area in the 1980s, rezoning the area from an industrial zone to a service commercial zone. While Helena remains able to operate much of its existing business as a grandfathered use under the prior

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zoning ordinance, further efforts at expansion would require modification of the current zoning ordinance.

16. During a meeting between the City and Helena in March 2013, City Manager Darrel Pyle, noting that Helena provides one of the highest tax bases for the City, suggested a possible solution to the zoning issue would be to relocate Helena to the Kings Industrial Park Property.

17. In April 2013, City Manager Darrel Pyle reported that the City Council directed the City to work with Helena on a possible relocation plan to the Kings Industrial Park, and stated that the City was very supportive of discussions to provide Helena with an alternative site to facilitate its continued growth and expansion. These discussions did not, however, ultimately culminate in a finalized plan for Helena’s relocation at that time.

18. The City instead turned to the issue of Helena’s efforts to expand its existing operations at its present site. On November 18, 2014, the Hanford City Council approved a municipal code amendment allowing expansion of Helena’s Facility on East Lacey Boulevard. The Council voted 3-2 to approve a municipal code amendment to allow “enclosed storage, blending and sale of bulk and prepackaged dry and liquid fertilizer for retail use” in the City’s light industrial zones. The Council also approved a permit that would allow Helena’s existing operations at its current location to continue without restriction, and to construct its planned 24,650-square-foot warehouse for its expanding operations.

19. The developer of the Costco project, Kashian, voiced strong opposition to the Council’s approval of Helena’s plans to expand its Facility. Following the November 18, 2014 vote, Kashian ordered his engineering firm to stop work on the project, and commented publicly that allowing the agricultural fertilizer retailer to expand would not be compatible with plans to build the 500,000- square-foot Hanford Marketplace shopping center with stores and restaurants. Kashian told the City that progress on the Costco project would remain halted until the City reconsidered its decision to allow Helena to expand its operations at the Lacey Property, and build its new 24,650-square-foot warehouse.

20. To appease Kashian’s concerns, so that the proposed Highway 43/198 Commercial Center Project would continue to move forward, the City sought to address Helena’s operations at the

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Lacey Property. The City and Helena again entered discussions concerning relocation of Helena’s Facility. These discussions centered on moving Helena from the Lacey Property to a new location at the 1,100-acre City-owned Kings Industrial Park near Houston and 11th Avenues.

21. The Hanford City Council held a special meeting on November 25, 2014 to negotiate an agreement with Helena for its potential relocation. The special meeting culminated in a binding contractual agreement with Helena, embodied in a memorandum of understanding executed the date of the meeting on November 25, 2014. The 2014 Purchase Agreement was executed, on behalf of Helena, by Steve Alexander, Vice President for Helena’s western business unit; and, on behalf of the City, by all members of the Council, including Mayor Gary Pannett, Vice Mayor Russ Curry, and Council Members Jim Irwin, Joleen James, Lou Martinez, and City Manager Darrel Pyle. Pursuant to the 2014 Purchase Agreement, the City agreed to acquire from Helena the Lacey Property in exchange for the Kings Industrial Park Property. The City also agreed to relocate Helena’s existing improvements to the new site and, if not feasible to move, then to construct equivalent new improvements on the new site at the City’s sole cost and expense.

22. The 2014 Purchase Agreement provided, in relevant part, that:

In exchange for the Helena Property, Helena will receive approximately 26.24 acres of real property located in the Kings Industrial Park . . . . . . the City will cause the relocation of Helena’s Existing Improvements to the extent feasible. The City will construct new improvements (New Improvements) on the City Property that are fully permitted and equivalent to the improvements that cannot be feasibly relocated from the Helena Property to the City Property.

The Helena Property will be the sole consideration that Helena will provide in exchange for the City Property, the relocation of Existing Improvements, the obtaining of the required permits, and the construction of the New Improvements.

23. The 2014 Purchase Agreement, which was approved by the City Council in open session and signed by the Mayor, was intended to be binding. The 2014 Purchase Agreement, after setting forth its material terms and conditions, states: “[i]t is understood and agreed that the terms of this memorandum of understanding, while illustrative of the transactions contemplated by the parties, are binding . . . (italics added).” Moreover, the City and Helena explicitly agreed to “reasonably cooperate with each other in an effort to bring this matter to closure in a timely fashion . . . [and to] . . . work together to prepare all of the formal documents and obtain all governmental approvals necessary

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to accomplish the land exchange contemplated in [the] memorandum of understanding.”

24. To its detriment, and in reliance upon the 2014 Purchase Agreement with the City and the Council’s representation related thereto, Plaintiff Helena took the following actions: (i) withdrew from further City action, its application, and formal requests to secure necessary permits and approvals to expand its facilities (which had been previously approved by the City Council); (ii) ceased further efforts to facilitate the necessary expansion; (iii) did not take advantage of its already approved building permit, and (iv) agreed to move to the new site in the Kings Industrial Park. Helena took these actions only because the City bound itself to perform as set forth in the 2014 Purchase Agreement. As a result of Helena’s actions in reliance on the 2014 Purchase Agreement, progress on the Highway 43/198 Commercial Center Project was resumed. Immediately subsequent to securing the Agreement with Helena, the Council voted 5-0 to deny approval of the second reading on Helena’s expansion plans.

25. Over the course of the next several months, Helena and the City conducted extensive discussions in a collaborative effort to develop a definitive written agreement embodying the terms set forth in the parties’ 2014 Purchase Agreement. The parties were successful in those efforts, and a definitive written agreement (the “Definitive Agreement”) was presented to the Council in closed session for execution on or about July 7, 2015. Shortly after the conclusion of the meeting, City officials reported to Helena’s attorneys that the Council refused to execute the Definitive Agreement.

Further, the Council determined the City would not perform its obligations under the 2014 Purchase Agreement.

26. Regarding its 2016 Purchase Agreement claim, it arises from written “Purchase and Sale Agreements” of real property between Helena and the City dated December 28, 2016, and Escrows 4839327 and 5243097 with First American Title Company related to the 2016 Purchase Agreement. This claim was previously referenced in the “Litigation Hold Notice to the City of Hanford” dated October 26, 2017 from Helena’s counsel to the City’s counsel, as delivered via e-mail and UPS Overnight Mail.

27. Pursuant to the 2016 Purchase Agreement, the City agreed to sell to Helena a 16.43 acre parcel located within the Kings Industrial Park near the intersection of Houston Avenue and 11 th

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Avenue (as noted, the “New Kings Industrial Park Property”), for the purchase price of $660,000.00.

In a separate but related transaction, Helena was to acquire a 9.81 acre parcel held by the Successor Agency to the Community Redevelopment Agency of the City of Hanford for the purchase price of $392,400.00, with the closing of that transaction to occur simultaneously with, and contingent upon, the closing of the escrow for the New Kings Industrial Park Property. Further, Section 9(e) of the 2016 Purchase Agreement, titled “No Release of Prior Claims,” expressly stated: “Nothing in this Agreement, or the performance of the parties pursuant to this Agreement, shall release or act as a release to any claims or claims Buyer may have against the Seller which arose prior to closing.”

28. By way of background regarding Section 9(e) of the 2016 Purchase Agreement, as detailed above, (a) on July 6, 2016, i.e., months prior to the execution of the Purchase Agreement, Helena submitted a government claim against the City arising out of a contractual dispute between Helena and City concerning the 2014 Purchase Agreement, and (b) on April 11, 2017, Helena filed a Complaint in Kings County Superior Court, case no. 17C0102, against the City for specific performance, breach of contract, breach of the covenant of good faith and fair dealing, and breach of contract – promissory estoppel arising out of the 2014 Agreement (the “Complaint”). At that time, none of the City defendants named in the Complaint were formally served, given that Helena’s counsel and the City’s counsel had previously engaged in discussions and negotiations relating to the claims asserted in the Complaint, and Helena opted to forestall service of the Complaint to allow those discussions and negotiations to further develop.

29. Regarding the 2016 Purchase Agreement, on or about August 2, 2017 the City improperly attempted to terminate or cancel the escrow regarding said Agreement. Specifically, following the original close of escrow date of April 7, 2017, and during the months of April, May, June, and July 2017, Helena diligently and jointly worked with the City (and First American Title) in good faith to close escrow; and, on June 29, 2017, the City advised First American Title to prepare Amended/Supplemental Escrow Instructions whereby the closing date would be extended, with exercise of options, through October 30, 2017 in order to resolve “a few” final issues. On July 18, 2017, the City Manager informed Helena that the City was “extending escrow to finalize rail operational stuff.” However, the very next day, July 19, 2017 at 10:19 p.m., and without warning, the

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City’s counsel advised Helena via email as follows:
“The City Council met in closed session to consider Helena’s request to extend escrow.

The Council recognized that Helena offered no new consideration for the requested extension. After discussion, the Council determined that the City is willing to extend the closing deadline in consideration for Helena’s dismissal of the pending lawsuit and Helena’s agreement that it not pursue litigation in the future with respect to the November 25, 2014 letter or Helena’s relocation to the Industrial Park . . . The proposed terms are justified because the current railroad improvement issue is not [sic] fault of the City, and, therefore, the City is under no legal obligation to amend the executed Purchase Agreement to extend escrow.” (Emphasis added.)

30. When Helena was unwilling to waive the claims set forth in its existing Complaint (and as preserved in Section 9(e) of the 2016 Purchase Agreement), on August 2, 2017, the City delivered a letter to First American Title unilaterally instructing it to “cancel escrow and to refund Helena’s deposit.” In response, on August 2, 2017, Helena delivered a letter to First American Title stating that the City “is not entitled to terminate this Escrow” and seeking confirmation that “FirstAm is not terminating or cancelling this Escrow.” As of the date of this First Amended Complaint, on information and belief, the escrow has not been terminated or cancelled, but the City sold the Property to a third party (Tessenderlo Kerley, Inc.) on or about April 2018.

31. After Defendant City canceled the escrow on the 2016 Purchase Agreement, Plaintiff Helena has diligently pursued the purchase and acquisition of alternative and/or replacement property in Hanford, California or proximate to Hanford, California, but to date has been unable to acquire such property. As of the date of this First Amended Complaint, Helena continues to search for such alternative and/or replacement property as a direct result and consequence of the City’s breaches of the 2014 Purchase Agreement and 2016 Purchase Agreement, as detailed herein.

II.

FIRST CAUSE OF ACTION
(Breach of Contract – 2014 Purchase Agreement – Damages Against Defendants)

32. Plaintiff Helena incorporates herein by this reference the allegations in Paragraphs 1

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through 31 above, as though the same were fully set forth herein.

33. On November 25, 2014, Plaintiff Helena and Defendant City entered into the 2014 Purchase Agreement, pursuant to which the City agreed to (a) acquire the Lacey Property from Helena in exchange for the Kings Industrial Park Property; and (b) to relocate Helena’s existing improvements to the new site and, if not feasible to move the existing improvements, then to construct equivalent new improvements at the Kings Industrial Park Property at the City’s sole cost and expense. The sole consideration to be provided by Helena was the Lacey Property.

34. Plaintiff Helena has performed all things necessary on its part to be performed under the Agreement with the City, except for those things the performance of which has been excused by the failure of the Defendants and each of them to perform as herein alleged.

35. To date, Defendants have failed and refused to execute the Definitive Agreement prepared through the joint efforts of the parties, and has failed and refused to perform its obligations to exchange the Kings Industrial Park Property for the Lacey Property, and to relocate Helena’s existing improvements to the new site and/or construct equivalent new improvements on the new site, and is in breach of the 2014 Purchase Agreement.

36. As a proximate result of Defendants’ breach of the 2014 Purchase Agreement, and other wrongful conduct, Helena has been damaged in an amount to be established according to proof at trial, including, but not limited to, the substantial fees and costs incurred in good faith participation and cooperation with the City in carrying out the terms of the parties’ 2014 Purchase Agreement; all fees and costs associated with Helena being required to relocate its business facilities and all other damages resulting therefrom, including loss of Helena’s operations and profits; additional damages to be suffered as a result of injury to Helena’s continuing business operations, due to its inability to expand, loss of property, and related changed conditions of operations; and any and all other damages incurred by Helena arising out of, and/or related to, the City’s failure to perform under the 2014 Purchase Agreement, and applicable law, in an amount according to proof, but in no event less than $15,000,000.00 (in total) due to Defendants’ conduct and actions as alleged in this First Amended Complaint.

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III.

SECOND CAUSE OF ACTION
(Breach of Contract – 2016 Purchase Agreement – Damages Against Defendants)

37. Plaintiff Helena incorporates herein by this reference the allegations in Paragraphs 1 through 36 above, as though the same were fully set forth herein.

38. On or about December 28, 2016, Plaintiff Helena and Defendant City entered into written “Purchase and Sale Agreements” of real property, and opened Escrows 4839327 and 5243097 with First American Title Company related to the 2016 Purchase Agreement. Pursuant to the 2016 Purchase Agreement, the City agreed to sell to Helena a 16.43 acre parcel located within the Kings Industrial Park near the intersection of Houston Avenue and 11th Avenue (the “New Kings Industrial Park Property”), for the purchase price of $660,000.00. In a separate but related transaction, Helena was to acquire a 9.81 acre parcel held by the Successor Agency to the Community Redevelopment Agency of the City of Hanford for the purchase price of $392,400.00, with the closing of that transaction to occur simultaneously with, and contingent upon, the closing of the escrow for the New Kings Industrial Park Property.

39. Plaintiff Helena has performed all things necessary on its part to be performed under the 2016 Purchase Agreement with the City, except for those things the performance of which has been excused by the failure of the Defendants and each of them to perform as herein alleged.

40. To date, Defendants have failed and refused to perform their contractual obligations under the 2016 Purchase Agreement, and under applicable law, and is in breach of the 2016 Purchase Agreement.

41. As a proximate result of Defendants’ breach of the 2016 Purchase Agreement, and other wrongful conduct, Helena has been damaged in an amount to be established according to proof at trial, including, but not limited to, the substantial fees and costs incurred in good faith participation and cooperation with the City in carrying out the terms of the parties’ 2016 Purchase Agreement; all fees and costs associated with Helena being required to relocate its business facilities and all other damages resulting therefrom, including loss of Helena’s operations and profits; additional damages to be suffered as a result of injury to Helena’s continuing business operations, due to its inability to expand,

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loss of property, and related changed conditions of operations; and any and all other damages incurred by Helena arising out of, and/or related to, the City’s failure to perform under the 2016 Purchase Agreement, and applicable law, in an amount according to proof, but in no event less than $15,000,000.00 (in total) due to Defendants’ conduct and actions as alleged in this First Amended Complaint.

IV.

THIRD CAUSE OF ACTION
(Breach of Covenant of Good Faith and Fair Dealing – 2014 Purchase Agreement – Against Defendants)

42. Plaintiff Helena incorporates herein by this reference the allegations in Paragraphs 1 through 41 above, as though the same were fully set forth herein.

43. In the discussions leading up to the execution of the 2014 Purchase Agreement, Defendants represented to Plaintiff that Defendants were supportive of a plan to move Helena to the Kings Industrial Park. This was Defendants’ proposal. Less than one week before the Agreement was executed, the Highway 43/198 Commercial Center Project developer put the project on hold as a consequence of Helena having successfully appealed and been granted approval for its expansion plans at the Lacey Property. It is a well-publicized fact that the Highway 43/198 Commercial Center Project developer was not willing to proceed with the project if Helena was allowed by Defendants to remain, operate, and expand at the Lacey Property. It is for this reason that Defendants induced Helena to withdraw further efforts to expand at the Lacey Property location by presenting the proposal to move Helena to the Kings Industrial Park, and executing a binding written agreement to carry out the relocation.

44. Plaintiff Helena was initially reticent to proceed with the 2014 Purchase Agreement, in light of the probable cost issues related to relocation of Plaintiff, but after multiple discussions concerning estimates provided by Plaintiff, Defendants provided assurances to Plaintiff that they would be able to perform their obligations under said Agreement, and Plaintiff was, in reliance on those assurances, willing to proceed.

45. Plaintiff is informed and believes, and based on such information and belief alleges that,

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at the time of the above-described discussions, Defendants knew, or should have known, that Defendants were unwilling to execute the Definitive Agreement, and Defendants were unwilling to perform what they had promised. Defendants, and each of them, nevertheless continued to misrepresent their willingness to relocate Helena according to the terms of the 2014 Purchase Agreement.

46. After Plaintiff Helena withdrew its previously approved application and formal requests from further City action to formally secure authorizations for its expansion plans, ceased further efforts to facilitate its necessary expansion, did not take advantage of its already approved building permit, and agreed to move to the new site in the Kings Industrial Park, and the Costco Project was proceeding forward, Defendants, and each of them, simply refused to perform their obligations under the Agreement, declining to execute the Definitive Agreement prepared through the joint efforts of the parties. The City subsequently denied approvals of the second reading on Helena’s expansion plans, and moved forward, instead, on an aggressive plan of action to restrict and impede Helena’s existing operations at the Lacey Property. Defendants, and each of them, by those actions, effectively made it impossible for Helena to continue with its formerly approved plans for expansion, and has imposed substantial impediments against Helena’s continued use of the Lacey Property for its fertilizer business. In acting in the manner described in this Paragraph, Defendants violated the implied covenant of good faith and fair dealing that exists in the contract between Plaintiff and Defendants.

47. Plaintiff has performed all conditions, covenants, and promises required on Plaintiff’s part to be performed in accordance with the terms and conditions of the 2014 Purchase Agreement, and has expended substantial sums in good faith participation and cooperation with the City in carrying out the terms of said Agreement.

48. As a proximate result of Defendants’ breach of the covenant of good faith and fair dealing under the 2014 Purchase Agreement, and other wrongful conduct, Helena has been damaged in an amount to be established according to proof at trial, including, but not limited to, the substantial fees and costs incurred in good faith participation and cooperation with the City in carrying out the terms of the parties’ 2014 Purchase Agreement; all fees and costs associated with Helena being required to relocate its business facilities and all other damages resulting therefrom, including loss of Helena’s

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operations and profits; additional damages to be suffered as a result of injury to Helena’s continuing business operations, due to its inability to expand, loss of property, and related changed conditions of operations; and any and all other damages incurred by Helena arising out of, and/or related to, the City’s failure to perform under the 2014 Purchase Agreement, and applicable law, in an amount according to proof, but in no event less than $15,000,000.00 (in total) due to Defendants’ conduct and actions as alleged in this First Amended Complaint
V.

FOURTH CAUSE OF ACTION
(Breach of Covenant of Good Faith and Fair Dealing – 2016 Purchase Agreement – Against Defendants)

49. Plaintiff Helena incorporates herein by this reference the allegations in Paragraphs 1 through 48 above, as though the same were fully set forth herein.

50. Helena has expended substantial sums in good faith participation and cooperation with the City in carrying out the terms of the 2016 Purchase Agreement. Specifically, following the original close of escrow date of April 7, 2017, and during the months of April, May, June, and July 2017, Helena diligently and jointly worked with the City (and First American Title) in good faith to close escrow; and, on June 29, 2017, the City advised First American Title to prepare Amended/Supplemental Escrow Instructions whereby the closing date would be extended, with exercise of options, through October 30, 2017 in order to resolve “a few” final issues. On July 18, 2017, the City Manager informed Helena that the City was “extending escrow to finalize rail operational stuff.” However, the next day, July 19, 2017 at 10:19 p.m., and without warning, the City advised Helena that it would only extend the escrow closing in exchange for Helena’s dismissal and release of Helena’s pending lawsuit filed April 11, 2017, as described above. When Helena was unwilling to waive the claims set forth in its existing Complaint (and as preserved in Section 9(e) of the 2016 Purchase Agreement), on August 2, 2017, the City delivered a letter to First American Title unilaterally instructing it to “cancel escrow and to refund Helena’s deposit.”

51. Plaintiff has performed all conditions, covenants, and promises required on Plaintiff’s part to be performed in accordance with the terms and conditions of the 2016 Purchase Agreement, and

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has expended substantial sums in good faith participation and cooperation with the City in carrying out the terms of said Agreement, as referenced above.

52. As a proximate result of Defendants’ breach of the covenant of good faith and fair dealing under the 2016 Purchase Agreement, and other wrongful conduct, Helena has been damaged in an amount to be established according to proof at trial, including, but not limited to, the substantial fees and costs incurred in good faith participation and cooperation with the City in carrying out the terms of the parties’ 2016 Purchase Agreement; all fees and costs associated with Helena being required to relocate its business facilities and all other damages resulting therefrom, including loss of Helena’s operations and profits; additional damages to be suffered as a result of injury to Helena’s continuing business operations, due to its inability to expand, loss of property, and related changed conditions of operations; and any and all other damages incurred by Helena arising out of, and/or related to, the City’s failure to perform under the 2016 Purchase Agreement, and applicable law, in an amount according to proof, but in no event less than $15,000,000.00 (in total) due to Defendants’ conduct and actions as alleged in this First Amended Complaint
VI.

FIFTH CAUSE OF ACTION
(Breach of Contract – Promissory Estoppel – 2014 Purchase Agreement – Against Defendants)

53. Plaintiff Helena incorporates herein by this reference the allegations in Paragraphs 1 through 52 above, as though the same were fully set forth herein

54. By way of the conduct described above, specifically Paragraphs 20-23, and 25, Defendants promised, assured, and represented to Plaintiff Helena that Defendants would perform the City’s obligations under its 2014 Purchase Agreement with Helena to acquire from Helena the Lacey Property in exchange for the Kings Industrial Park Property, and to relocate Helena’s existing improvements to the new site and, if not feasible to move, then to construct equivalent new improvements on the new site at the City’s sole cost and expense.

55. In so doing, Defendants knew or should have known that Plaintiff Helena would be reasonably induced to rely on Defendants’ promises, assurances and representations as described in Paragraphs 20-23, and 25, above.

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56. Plaintiff Helena reasonably relied on the Defendants’ promises, assurances or representations described above, and was induced to take the actions described in Paragraph 24 above, and to participate, at significant cost, in extensive discussions in a collaborative effort to develop a definitive written agreement embodying the terms set forth in the parties’ 2014 Purchase Agreement, as alleged in Paragraph 25 above.

57. Defendants failed to perform on their promises, assurances and representations made to Plaintiff regarding the 2014 Purchase Agreement.

58. As a proximate result of Defendants’ failure to perform according to the promises, assurances, and representations made to Plaintiff, Plaintiff has been damaged and injustice can be avoided only by enforcing Defendants’ promises, assurance and representations completely.

59. As a proximate result of Defendants’ breach of the 2014 Purchase Agreement, and other wrongful conduct, Helena has been damaged in an amount to be established according to proof at trial, including, but not limited to, the substantial fees and costs incurred in good faith participation and cooperation with the City in carrying out the terms of the parties’ 2014 Purchase Agreement; all fees and costs associated with Helena being required to relocate its business facilities and all other damages resulting therefrom, including loss of Helena’s operations and profits; additional damages to be suffered as a result of injury to Helena’s continuing business operations, due to its inability to expand, loss of property, and related changed conditions of operations; and any and all other damages incurred by Helena arising out of, and/or related to, the City’s failure to perform under the 2014 Purchase Agreement, and applicable law, in an amount according to proof, but in no event less than $15,000,000.00 (in total) due to Defendants’ conduct and actions as alleged in this First Amended Complaint.

WHEREFORE, Plaintiff Helena prays for judgement against Defendants as follows:

1. For compensatory damages, in an amount according to proof to be established at trial, but in no event less than $15,000,000.00;

2. For its attorneys’ fees and costs, as the prevailing party;

3. For its costs of suit incurred herein; and

1 MARK E. MCKEEN (SBN 130950)
JULIA BRIGHTON (SBN 280418)
2 DLA PIPER LLP (US)
555 Mission Street, Suite 2400
3 San Francisco, California 94105-2933
Tel: 415.836.2500
4 Fax: 415.836.2501
5 Attorneys for Plaintiff
HELENA AGR1-ENTERPRISES, LLC, a
6 Delaware limited liability company, formerly
known as HELENA CHEMICAL COMPANY,
7 a Delaware corporation
8 9
10 SUPERIOR COURT OF THE STATE OF CALIFORNIA

IN AND FOR THE COUNTY OF KINGS
11 HELENA AGRI-ENTERPRISES, LLC, a
12 Delaware limited liability company. formerly
known as HELENA CHEMICAL COMPANY,
13 a Delaware corporation,
14 Plaintiff,
15 vs.
16 Case No. l7CO 1 02

SECOND AMENDED COMPLAINT FOR
DAMAGES FOR BREACH OF CONTRACT;

BREACH OF COVENANT OF GOOD FAITH
AND FAIR DEALING; BREACH OF

CONTRACT- PROMISSORY ESTOPPEL
CITY OF HANFORD, a municipal corporation; Unlimited civil case, amount demanded exceeds 17 and DOES 1-25, $25,000
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28 Defendants.

PLAINTIFF HELENA AGRI- ENTERPRISES, LLC'S SECOND AMENDED COMPLAINT WEST\283256900.1

1 Plaintiff, Helena Agri-Enterprises, LLC, alleges:
2 L
3 GENERAL ALLEGATIONS
4 1. Plaintiff Helena Agri-Enterprises, LLC ("Plaintiff" or ~'Helena") is a Delaware limited 5 liability company, formerly known as Helena Chemical Company, a Delaware corporation, duly 6 licensed to do business in the State of California, and one of the nation's foremost agricultural and 7 specialty formulators and distributors in the United States. Helena has operated its retail fertilizer 8 facility ("Facility") in the City of Hanford since 1972. 9 2. Defendant City of Hanford ("Defendant", "Defendant City" or "City") is a municipal I 0 corporation and general law city governed by the laws of the State of California and is governed by the 11 City Council (''Council"), duly elected by voters residing within the jurisdiction of the City. 12 3. Plaintiff is ignorant of the true names and capacities of defendants sued herein as Does 13 1 through 25 inclusive, and, therefore, sues these defendants by fictitious names. Plaintiff will further 14 amend this Second Amended Complaint to allege the true names and capacities when ascertained. 15 Plaintiff is informed and believes and thereon alleges that each of these fictitiously named defendants I 6 is responsible in some manner for the acts or omissions alleged in this complaint and Plaintiffs 17 damages were proximately, legally, and foreseeably caused by the acts or omissions of these 18 defendants.
19 4. Plaintiff is informed and believes and thereon alleges that at all times mentioned herein 20 each defendant was the agent, servant, and employee of each of the remaining Defendants and was, in 21 doing the acts alleged herein, acting within the full scope of their agency and/or employment and 22 acting with the full knowledge or subsequent ratification of their principals or employers. 23 5. This Second Amended Complaint arises from two contractual disputes between Plaintiff 24 Helena and Defendant City concerning (1) written agreements entered into by the parties dated 25 November 25, 2014 (the "2014 Purchase Agreement"), and (2) written agreements entered into by the 26 parties dated December 28, 2016 (the "2016 Purchase Agreement"). 27 6. Pursuant to the 2014 Purchase Agreement, the City agreed to acquire Helena's real 28 property located at 8148 E. Lacey Blvd., Hanford, California (the "Lacey Property") in exchange for 1 PLAINTIFF HELENA AGRI-ENTERPRISES, LLC' S SECOND AMENDED COMP LAINT

1 an approximately 26.24-acre City-owned parcel located within the Kings Industrial Park near Houston 2 and 11th Avenues (the "Kings Industrial Park Property"). As part of the 2014 Purchase Agreement, 3 the City agreed to move Helena's existing improvements on the Lacey Property to the Kings Industrial 4 Park Property, or, if it was ultimately not feasible to move the existing improvements, the City agreed 5 to construct new improvements at the Kings Industrial Park Property, at the City's sole cost and 6 expense. The City induced Helena to withdraw its pending efforts to expand its facilities at the Lacey 7 Property, where the City had already granted an expansion permit and municipal code amendment 8 related thereto. Then, after months of discussions culminating in a mutually-developed definitive 9 written agreement, the Hanford City Council decided not to perform the obligations to which the City 10 is bound under the 2014 Purchase Agreement. Moreover, the City initiated an aggressive plan of 11 action to condemn substantial portions of the Lacey Property, reversed its approval of critical 12 authorizations for Helena's expansion and operations, and forced Helena to initiate the original 13 Complaint filed April 11, 2017 to recover damages caused by the City's actions. 14 7. Pursuant to the 2016 Purchase Agreement, the City agreed to sell to Helena a 16.43 acre 15 parcel located within the Kings Industrial Park near the intersection of Houston A venue and lllh 16 Avenue (the "New Kings Industrial Park Property"), for the purchase price of $660,000.00. In a 17 separate but related transaction, Helena was to acquire a 9.81 acre parcel held by the Successor Agency 18 to the Community Redevelopment Agency of the City of Hanford for the purchase price of 19 $392,400.00, with the closing of that transaction to occur simultaneously with, and contingent upon, 20 the closing of the escrow for the New Kings Industrial Park Property. On or about August 2, 2017, the 21 City improperly attempted to terminate or cancel the escrow regarding the 2016 Purchase Agreement 22 Specifically, following the original close of escrow date of April 7, 2017, and during the months of 23 April, May, June, and July 2017, Helena diligently and jointly worked with the City (and First 24 American Title) in good faith to close escrow; and, on June 29, 2017, the City advised First American 25 Title to prepare Amended/Supplemental Escrow Instructions whereby the closing date would be 26 extended, with exercise of options, through October 30, 2017 in order to resolve "a few" final issues. 27 On July 18, 2017, the City Manager informed Helena that the City was "extending escrow to fmalize 28 rail operational stuff." However, the very next day, July 19~ 2017 at 10:19 p.m., and without warning, 2 PLAINTIFF HELENA AGRI-ENTERPRISES, LLC'S SECOND AMEND ED COMPLAINT

the City stated it was only willing to extend the closing deadline on the condition that Helena dismiss 2 its pending lawsuit regarding the 2014 Purchase Agreement and agree not to pursue litigation in the 3 future with respect to said Agreement. When Helena was unwilling to waive the claims set forth in its 4 existing Complaint (and as preserved in Section 9(e) of the Purchase Agreement), on August 2, 2017, 5 the City delivered a letter to First American Title unilaterally instructing it to "cancel escrow and to 6 refund Helena's deposit.''
7 8. Venue is proper in the County of Kings {the "County") because Defendant City has its 8 principal place of business located in this County; the actions complained of herein occurred within 9 this County; and the real property that is the subject of the Second Amended Complaint is situated in 10 this County.
11 9. Plaintiff Helena has pel'formed any and all conditions precedent to filing this Second 12 Amended Complaint and has exhausted any and all administrative remedies. Regarding the 2014 13 Purchase Agreement, on July 6, 2016, Plaintiff complied with the requirements of Government Code 14 section 911.2 by presenting its claim, as provided under Government Code section 915; on October 13, 15 2016, Plaintiff's "first', claim was rejected by Defendant City. Regarding the 2016 Purchase 16 Agreement, on November 13, 2017, Plaintiff complied with the requirements of Government Code 17 section 911.2 by presenting its claim, as provided under Government Code section 915; on December 18 7, 2017, Plaintiff's "second" claim was rejected by Defendant City. 19 10. Helena has operated the Facility in the City of Hanford since 1972, and has been highly 20 successful in its operations at that Facility. Since 2004, Helena 's business has doubled from just under 21 $15 million to over $30 million, generating substantial revenue for the City of Hanford and County of 22 Kings . Helena has numerous locations, in addition to its Hanford location, throughout the State of 23 California, and provides jobs to hundreds of residents throughout the Central. Valley. 24 11. Formerly located on 11th Avenue in the City of Hanford, Helena moved its operations 25 to its present location at the Lacey Property on East Lacey Boulevard, just west of Highway 43, in 26 2011. The Lacey Property site was acquired from Souza Enterprises, Inc., and has been used for a 27 fertilizer business since 1955. The Lacey Property site was, and remains, uniquely suited to 28 accommodate Helena's business operations, given the size of the property, railway access, existing 3 PLAINTIFF HELENA AGRI-ENTERPRISES, LLC'S SECOND AMENDED COMPLAINT

1 infrastructure, expandability, and proximity to arterial roads outside the City of Hanford. 2 12. Regarding to its 2014 Purchase Agreement claim, upon acquisition of the new site at the 3 Lacey Property, Helena initiated efforts to construct improvements to the site to accommodate its 4 expanding operations, including a 24,650 square foot warehouse for storage of its crop protection and 5 production products, and a 630 square foot office expansion. 6 13. Shortly after the expansions, in 2012, a Fresno-based developer, John Kashlan 7 ("Kashian") submitted a proposal to the City for the development of a large, mixed-use development 8 on a 58-acre piece of farmland on East Lacey Boulevard on the northwest corner of Highway 198 and 9 Highway 43, consisting of 498,624 square feet of retail space, including two anchors and several major 10 stores and restaurants, as well as additional space for an apartment complex or more stores (the 11 "Highway 43/198 Commercial Center Project"). The proposed development would also involve, as 12 was well~publicized, a new Costco Wholesale location. The site for the proposed Highway 43/198 13 Commercial Center Project was directly across the street from Helena's location on the Lacey 14 Property. Plaintiffs are informed and believe, and based on such information and belief allege, that 15 Kashian pressured City officials to remove Helena and/or restrict Helena's expansion based on the 16 perceived incompatibility of Helena's fertilizer operations with the commercial activities envisioned 17 by the Highway 43/198 Commercial Center Project.
18 14. In 2013, during the process by which Helena sought to obtain City approval for its 19 expansion plans, it was brought to Helena's attention that, despite the over 60-year history ofuse of the 20 site for fertilizer business, and a number of permits issued by the County of Kings that had allowed 21 that type of business to operate there, the site had become a nonconforming use when the City annexed 22 the area in the 1980s, rezoning the area from an industrial zone to a service commercial zone. While 23 Helena remains able to operate much of its existing business as a grandfathered use Wlder the prior 24 zoning ordinance, further efforts at expansion would require modification of the current zoning 25 ordinance.
26 15. During a meeting between the City and Helena in March 2013, City Manager Darrel 27 Pyle, noting that Helena provides one of the highest tax bases for the City, suggested a possible 28 solution to the zoning issue would be to relocate Helena to the Kings Industrial Park Property. 4 PLAINTIFF HELENA AGRI-ENTERPRISES, LLC'S SECOND AMENDED COMPLAINT

I 16. In April 2013, City Manager Darrel Pyle reported that the City Council directed the 2 City to work with Helena on a possible relocation plan to the Kings Industrial Park, and stated that the 3 City was very supportive of discussions to provide Helena with an alternative site to facilitate its 4 continued growth and expansion. These discussions did not. however, ultimately culminate in a 5 finalized plan for Helena's relocation at that time.
6 17. The City instead turned to the issue of Helena's efforts to expand its existing operations 7 at its present site. On November 18, 2014, the Council approved a municipal code amendment 8 allowing expansion of Helena's Facility on East Lacey Boulevard. The Council voted 3-2 to approve 9 a municipal code amendment to allow "enclosed storage, blending and sale of bulk and prepackaged 10 dry and liquid fertilizer for retail use" in the City's light industrial zones. The Council also approved a 11 permit that would allow Helena's existing operations at its current location to continue without 12 restriction, and to construct its planned 24,650-square-foot warehouse for its expanding operations. 13 18. The developer of the Costco project, Kashian, voiced strong opposition to the Council's 14 approval of Helena's plans to expand its Facility. Following the November 18, 2014 vote, Kashian 15 ordered his engineering firm to stop work on the project, and commented publicly that allowing the 16 agricultural fertilizer retailer to expand would not be compatible with plans to build the 500,000- 17 square- foot Hanford Marketplace shopping center with stores and restaurants. Kashian told the City 18 that progress on the Costco project would remain halted until the City reconsidered its decision to 19 allow Helena to expand its operations at the Lacey Property, and build its new 24,650-square-foot 20 warehouse.
21 19. To appease Kashian's concerns, so that the proposed Highway 43/198 Commercial 22 Center Project would continue to move forward, the City sought to address Helena's operations at the 23 Lacey Property. The City and Helena again entered discussions concerning relocation of Hdena's 24 Facility. These discussions centered on moving Helena from the Lacey Property to a new location at 25 the 1,100-acre City-owned Kings Industrial Park near Houston and 11th Avenues. 26 20. The Hanford City Council held a special meeting on November 25, 2014 to negotiate an 27 agreement with Helena for its potential relocation. The special meeting culminated in a binding 28 contractual agreement with Helena, embodied in a memorandum of understanding executed the date of 5 PLAINTIFF HELENA AGRI-ENTERPRISES, LLC'S SECOND AMENDED COMPLAIN T

the meeting on November 25, 2014. The 2014 Purchase Agreement was executed, on behalf of 2 Helena, by Steve Alexander, Vice President for Helena's western business unit; and. on behalf of the 3 City, by all members of the Council, including Mayor Gary Pannett, Vice Mayor Russ Curry, and 4 Council Members Jim frwin, Joleen James, Lou Martinez, and City Manager Darrel Pyle . Pursuant to 5 the 20 14 Purchase Agreement, the City agreed to acquire from Helena the Lacey Property in exchange 6 for the Kings fndustrial Park Property. The City also agreed to relocate Helena's existing 7 improvements to the new site and, if not feasible to move, then to construct equivalent new 8 improvements on the new site at the City's sole cost and expense. 9 10
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21. The 2014 Purchase Agreement provided, in relevant part, that:

In exchange for the Helena Provertv . Helena will receive approximately 26.24 acres of real property located in the Kings Industrial Park . .. ... the Citv will cause the relocation of Helena's Existinf! Imvrovements to the extent feasible. The Citv will construct new imvrovements (New Imvrovements) on the City Provertv that are fU//v vermitted and eauivalent to the imvrovements that cannot be feasibly relocated from the Helena Property to the City Property.

The Helena Provertv will he the sole consideration that Helena will vrovide in exchanf!e for the Citv Provertv . the relocation of Existinf! Imvrovements , the obtaining ofthe required permits, and the construction ofthe New Improvements .

22. The 2014 Purchase Agreement, which was approved by the Council in open session and 17 signed by the Mayor , was intended to be binding . The 2014 Purchase Agreement, after setting forth its 18 material terms and conditions, states : "(i]t is understood and agreed that the terms ofthis memorandum 19 of understanding, while illustrative of the transactions contemplat ed by the parties, are binding ... 20 (italics added).'' Moreover, the City and Helena explicitly agreed to "reasonably cooperate with each 2 1 other in an effort to bring this matter to closure in a timely fashion ... [and to] . . . work together to 22 prepare all of the formal documents and obtain all governmental approvals necessary to accomplish the 23 land exchange contemplated in [the] memorandum ofunderstanding." 24 23. To its detriment, and in reliance upon the 2014 Purchase Agreement with the City and 25 the Council's representation related thereto, Plaintiff Helena took the following actions : (i) withdrew 26 from further City action, its application , and formal requests to secure necessary permits and approvals 27 to expand its facilities (which had been previously approved by the Council); (ii) ceased further efforts 28 to facilitate the necessary expansion; (iii) did not take advantage of its already approved building 6 PLAINTI FF HELENA AGRI-ENTERPRISES , LLC'S SECOND AMENDED COMPLAINT

permit, and (iv) agreed to move to the new site in the Kings Industrial Park. Helena took these actions 2 only because the City bound itself to perform as set forth in the 2014 Purchase Agreement. As a result 3 of Helena's actions in reliance on the 2014 Purchase Agreement, progress on the Highway 43/198 4 Commercial Center Project was resumed . Inunediately subsequent to securing the Agreement with 5 Helena, the Cm.mcil voted 5-0 to deny approval of the second reading on Helena's expansion plans. 6 24. Over the course of the next several months, Helena and the City, conducted extensive 7 discussions in a collaborative effort to develop a definitive written agreement embodying the terms set 8 forth in the parties' 2014 Purchase Agreement. The parties were successful in those efforts, and a 9 definitive written agreement (the "Definitive Agreement") was presented to the Council in closed 10 session for execution on or about July 7, 2015. Shortly after the conclusion of the meeting, City 11 officials reported to Helena's attorneys that the Council refused to execute the Definitive Agreement. 12 Further, the Council determined the City would not perform its obligations under the 2014 Purchase 13 Agreement.
14 25. Regarding its 2016 Purchase Agreement claim, it arises from written "Purchase and 15 Sale Agreements" of real property between Helena and the City dated December 28, 2016, and 16 Escrows 4839327 and 5243097 with First American Title Company related to the 2016 Purchase 17 Agreement. This claim was previously referenced in the "Litigation Hold Notice to the City of 18 Hanford" dated October 26,2017 from Helena's counsel to the City' S counsel, as delivered via e-mail 19 and UPS Overnight Mail.
20 26. Pursuant to the 2016 Purchase Agreement, the City agreed to sell to Helena a 16.43 acre 21 parcel located within the Kings Industrial Park near the intersection of Houston Avenue and 111h 22 Avenue (as noted, the ''New Kings Industrial Park Property"), for the purchase price of $660,000.00. 23 In a separate but related transaction, Helena was to acquire a 9 .81 acre pared held by the Successor 24 Agency to the Community Redevelopment Agency of the City of Hanford for the purchase price of 25 $392,400 .00, with the closing of that transaction to occur simultaneously with, and contingent upon, 26 the closing of the escrow for the New Kings Industrial Park Property. Further, Section 9(e) of the 2016 27 Purchase Agreement, titled "No Release of Prior Claims,'' expressly stated: "Nothing in this 28 Agreement, or the performance of the parties pursuant to this Agreement, shall release or act as a 7 PLAINTIF F HELENA AGRI-ENTERPRISES, LLC'S SECOND AMENDED COMPLAINT

1 release to any claims or claims Buyer may have against the Seller which arose prior to closing." 2 27. By way of background regarding Section 9(e) of the 2016 Purchase Agreement, as 3 detailed above, (a) on July 6, 2016, i.e., months prior to the execution of the Purchase Agreement, 4 Helena submitted a government claim against the City arising out of a contractual dispute between 5 Helena and City concerning the 2014 Purchase Agreement, and {b) on Aprilll, 2017, Helena filed a 6 Complaint in Kings County Superior Court, case no. 17C0102, against the City for specific 7 performance, breach of contract, breach of the covenant of good faith and fair dealing, and breach of 8 contract- promissory estoppel arising out of the 2014 Agreement (the "Complaint"). At that time, 9 none of the City defendants named in the Complaint were formally served, given that Helena's counsel 10 and the City's counsel had previously engaged in discussions and negotiations relating to the claims 11 asserted in the Complaint, and Helena opted to forestall service of the Complaint to allow those 12 discussions and negotiations to further develop.
13 28. Regarding the 2016 Purchase Agreement, on or about August 2, 2017 the City 14 improperly attempted to terminate or cancel the escrow regarding said Agreement. Specifically, 15 following the original close of escrow date of April 7, 2017, and during the months of April, May, 16 June, and July 2017, Helena diligently and jointly worked with the City (and First American Title) in 17 good faith to close escrow; and, on June 29, 2017, the City advised First American Title to prepare 18 Amended/Supplemental Escrow Instructions whereby the closing date would be extended, with 19 exercise of options, through October 30, 2017 in order to resolve "a few" final issues. On July 18, 20 2017, the City Manager informed Helena that the City was "extending escrow to finalize rail 21 operational stuff.,. However, the very next day, July 19, 2017 at 10: 19 p.m., and without warning, the 22 City' s counsel advised Helena via email as follows:
23 "The City Council met in closed session to consider Helena 's request to extend escrow. 24 The Council recognized that Helena offered no new consideration for the requested 25 extension. After discussion, the Council determined that the City is willing to extend 26 the closing deadline in consideration for Helena's dismissal of the pending lawsuit 27 and Helena's agreement that it not pursue litigation in the future with respect to the 28 November 25, 2014 letter or Helena's relocation to the Industrial Park ... The 8 PLAINTIFF HELENA AG RI-ENTERPRJSES, LLC'S SECOND AMEN DED COMPLAINT

1 proposed terms are justified because the current railroad improvement issue is not [sic} 2 fault of the City, and, therefore, the City is under no legal obligation to amend the 3 executed Purchase Agreement to extend escrow." (Emphasis added.) 4 29. When Helena was unwilling to waive the claims set forth in its existing Complaint (and 5 as preserved in Section 9(e) of the 2016 Pw·chase Agreement), on August 2, 2017, the City delivered a 6 letter to First American Title unilaterally instructing it to "cancel escrow and to refund Helena's 7 deposit." In response, on August 2, 2017, Helena delivered a letter to First American Title stating that 8 the City "is not entitled to terminate this Escrow"' and seeking confirmation that "FirstAm is not 9 terminating or cancelling this Escrow." As of the date of this Second Amended Complaint, on 1 0 information and belief, the escrow has not been terminated or cancelled, but the City sold the Property 11 to a third party (Tessenderlo Kerley, Inc.) on or about April 2018. 12 30. After Defendant City canceled the escrow on the 2016 Purchase Agreement, Plaintiff 13 Helena has diligently pursued the purchase and acquisition of alternative and/or replacement property 14 in Hanford, California or proximate to Hanford, Califomia, but to date has been unable to acquire such 15 property. As of the date of this Second Amended Complaint, Helena continues to pursue the purchase 16 and acquisition for such alternative and/or replacement property as a direct result and consequence of 17 the City's breaches ofthe 2014 Purchase Agreement and 2016 Purchase Agreement, as detailed herein. 18 II.
19 FIRST CAUSE OF ACTION
20 (Breach o(Contract- 2014 Purchase Agreement)
21 31. Plaintiff Helena incorporates herein by this reference the allegations in Paragraphs 1 22 through 24 above, as though the same were fully set forth herein. 23 32. On November 25, 2014, Plaintiff Helena and Defendant City entered into the 2014 24 Purchase Agreement, pursuant to which the City agreed to (a) acquire the Lacey Property from Helena 25 in exchange for the Kings Industrial Park Property; and (b) to relocate Helena's existing improvements 26 to the new site and, if not feasible to move the existing improvements, then to construct equivalent new 27 improvements at the Kings Industrial Park Property at the City's sole cost and expense. The sole 28 consideration to be provided by Helena was the Lacey Property. 9 PLAINTIFF HELENA AGRI-ENTERPRIS ES, LLC'S SECOND AMENDED COMPLAINT

I 33. Plaintiff Helena has performed all things necessary on its part to be performed under the 2 Agreement with the City, except for those things the performance of which has been excused by the 3 failure ofDefendant City as herein alleged.
4 34. To date, Defendant City has failed and refused to execute the Definitive Agreement 5 prepared through the joint efforts of the parties, and has failed and refused to perform its obligations to 6 exchange the Kings Industrial Park Property for the Lacey Property, and to relocate Helena's existing 7 improvements to the new site and/or construct equivalent new improvements on the new site, and is in 8 breach of the 20 14 Purchase Agreement.
9 35. As a proximate result of Defendant City's breach of the 2014 Purchase Agreement, and 1 0 other wrongful conduct, Helena has been damaged in an amount to be established according to proof at 11 trial, including, but not limited to, the substantial fees and costs incurred in good faith participation and 12 cooperation with the City in carrying out the terms of the parties• 2014 Purchase Agreement; all fees 13 and costs associated with Helena being required to relocate its business facilities and all other damages 14 resulting therefrom, including loss of Helena's operations and profits; additional damages to be 15 suffered as a result of injury to Helena's continuing business operations, due to its inability to expand, 16 loss of property, and related changed conditions of operations; and any and all other damages incurred 17 by Helena arising out of, and/or related to, the City' s failure to perform under the 2014 Purchase 18 Agreement, and applicable law, in an amount according to proof, but in no event less than 19 $15,000,000.00 (in total) due to Defendant City's conduct and actions as alleged in this Second 20 Amended Complaint.
21 III.
22 SECOND CAUSE OF ACTION
23 (Breach o(Conlract- 2016 Purchase Agreement)
24 36. Plain tiff Helena incorporates herein by this reference the allegations in Paragraphs 1 25 through 30 above, as thou gh the same were fully set forth herein. 26 37. On or about December 28, 2016, Plaintiff Helena and Defendant City entered into 27 written "Purchase and Sale Agreem ents" of real property, and opened Escrows 4839327 and 5243097 28 with First American Title Company related to the 2016 Purchase Agreement. Pursuant to the 2016 10 PLAINTIFF HELENA AGRI-ENTERPR1SES, LLC'S SECOND AMENDED COMPLAINT

1 Purchase Agreement, the City agreed to sell to Helena a 16.43 acre parcel located within the Kings 2 Industrial Park near the intersection of Houston Avenue and 11th Avenue (the "New Kings Industrial 3 Park Property"), for the purchase price of $660,000 .00. In a separate but related transaction, Helena 4 was to acquire a 9.81 acre parcel held by the Successor Agency to the Community Redevelopment 5 Agency of the City of Hanford for the purchase price of $392,400.00, with the closing of that 6 transaction to occur simultaneously with, and contingent upon, the closing of the escrow for the New 7 Kings Industrial Park Property .
8 38. Plaintiff Helena has performed all things necessary on its part to be performed under the 9 2016 Purchase Agreement with the City, except for those things the performance of which has been 10 excused by the failure of Defendant City as herein alleged. 11 39. To date, Defendant City has failed and refused to perform their contractual obligations 12 under the 2016 Purchase Agreement, and under applicable law, and is in breach ofthe 2016 Purchase 13 Agreement.
14 40. As a proximate result of Defendant City's breach of the 2016 Purchase Agreement, and 15 other wrongful conduct, Helena has been damaged in an amount to be established according to proof at 16 trial, including, but not limited to, the substantial fees and costs incurred in good faith participation and 17 cooperation with the City in carrying out the terms of the parties' 2016 Purchase Agreement; all fees 18 and costs associated with Helena being required to relocate its business facilities and all other damages 19 resulting therefrom, including loss of Helena's operations and profits; additional damages to be 20 suffered as a result of injury to Helena's continuing business operations, due to its inability to expand, 21 loss of property, and related changed conditions of operations; and any and all other damages incurred 22 by Helena arising out of, and/or related to, the City's failure to perform under the 2016 Purchase 23 Agreement, and applicable law, in an ainount according to proof, but in no event less than 24 $15,000,000.00 (in total) due to Defendant Citis conduct and actions as alleged in this Second 25 Amended Complaint.
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PLAINTIFF HELENA AGRI-ENTERPRISES, LLC'S SECOND AMENDED COMPLAINT

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4 IV.

THIRD CAUSE OF ACTION
(Breach o[Covenant o[Good Faith and Fair Dealing- 2014 Purchase Agreement)

41. Plaintiff Helena incorporates herein by this reference the allegations in Paragraphs 1 5 through 24 above, as though the same were fully set forth herein. 6 7
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19 42. After Plaintiff Helena withdrew its previously approved application and formal requests from further City action to formally secure authorizations for its expansion plans, ceased further efforts to facilitate its necessary expansion, did not take advantage of its already approved building permit, and agreed to move to the new site in the Kings Industrial Park, and the Costco Project was proceeding forward, Defendant City refused to perform its obligations under the 2014 Purchase Agreement, declining to execute the Definitive Agreement prepared through the joint efforts of the parties. The City subsequently denied approvals of the second reading on Helena's expansion plans, and moved forward, instead, on an aggressive plan of action to restrict and impede Helena's existing operations at the Lacey Property. Defendant City, by those actions, effectively made it impossible for Helena to continue with its formerly approved plans for expansion, and has imposed substantial impediments against Helena's continued use of the Lacey Property for its fertilizer business. In acting in the manner described herein, Defendant City violated the implied covenant of good faith and fair dealing that exists in the contract between Plaintiff and Defendant City.

43. Plaintiff has performed all conditions, covenants, and promises required on Plaintiff's 20 part to be performed in accordance with the terms and conditions ofthe 2014 Purchase Agreement, and 21 has expended substantial sums in good faith participation and cooperation with the City in carrying out 22 the terms of said Agreement.
23 44. As a proximate result of Defendant City's breach of the covenant of good faith and fair 24 dealing under the 2014 Purchase Agreement, and other wrongful conduct, Helena has been damaged in 25 an amount to be established according to proof at trial, including, but not limited to, the substantial fees 26 and costs incurred in good faith participation and cooperation with the City in carrying out the terms of 27 the parties' 2014 Purchase Agreement; all fees and costs associated with Helena being required to 28 relocate its business facilities and all other damages resulting therefrom, including loss of Helena's 12 PLAINTIFF HELENA AGRJ-ENTERPRJSES, LLC'S SECOND AMENDED COMPLAIN T

1 operations and profits; additional damages to be suffered as a result of injury to Helena's continuing 2 business operations. due to its inability to expand, loss of property, and related changed conditions of 3 operations; and any and all other damages incurred by Helena arising out of, and/or related to, the 4 City's failure to perform under the 2014 Purchase Agreement, and applicable law, in an amount 5 according to proof, but in no event less than $15,000,000.00 (in total) due to Defendant City's conduct 6 and actions as alleged in this Second Amended Complaint 7 ~
8 FOURTH CAUSE OF ACTION
9 (Breach of Covenant o[Good Faith and Fair Dealing- 2016 Purchase Agreement) 10 45. Plaintiff Helena incorporates herein by this reference the allegations in Paragraphs 1 11 through 30 above, as though the same were fully set forth herein. 12 46. Helena has expended substantial sums in good faith participation and cooperation with 13 the City in carrying out the terms of the 2016 Purchase Agreement. Specifically, following the original 14 close of escrow date of April 7, 2017, and during the months of April, May, June, and July 2017, 15 Helena diligently and jointly worked with the City (and First American Title) in good faith to close 16 escrow; and, on June 29, 2017, the City advised First American Title to prepare 17 Amended/Supplemental Escrow Instructions whereby the closing date would be e~tended, with 18 exercise of options, through October 30, 2017 in order to resolve "a few" final issues. On July 18, 19 20 17, the City Manager informed Helena that the City was "extending escrow to finalize rail 20 operational stuff." However, the next day, July 19, 2017 at 10:19 p.m., and without warning, the City 21 advised Helena that it would only extend the escrow closing in exchange for Helena's dismissal and 22 release of Helena's pending lawsuit flied April 11, 2017, as described above. When Helena was 23 unwilling to waive the claims set forth in its existing Complaint (and as preserved in Section 9(e) of 24 the 2016 Purchase Agreement), on August 2, 2017, the City delivered a letter to First American Title 25 unilaterally instructing it to "cancel escrow and to refund Helena's deposit.' ' 26 47. Plain tiff has perform ed all conditions, covenants, and prom ises required on P~aintiff's 27 part to be performed in accordance with the terms and conditions of the 2016 Purchase Agreement, and 28 has expended substantial sums in good faith participation and cooperation with the City in carrying out 13 PLAINTIFF HELENA AGRJ~ ENTERPRISES, LLC' S SECO ND AMENDED COMPLAINT

the terms of said Agreement, as referenced above.
2 48. As a proximate result of Defendant City's breach of the covenant of good faith and fair 3 dealing under the 2016 Purchase Agreement, and other wrongful conduct, Helena has been damaged in 4 an amount to be established according to proof at trial, including, but not limited to, the substantial fees 5 and costs incurred in good faith participation and cooperation with the City in carrying out the terms of 6 the parties' 2016 Purchase Agreement; all fees and costs associated with Helena being required to 7 relocate its business facilities and all other damages resulting therefrom, including loss of Helena's 8 operations and profits; additional damages to be suffered as a result of injury to Helena's continuing 9 business operations, due to its inability to expand, loss of property, and related changed conditions of 10 operations; and any and all other damages incurred by Helena arising out of, and/or related to, the 11 City's failure to perform under the 2016 Purchase Agreement, and applicable law, in an amount 12 according to proof, but in no event less than $15,000,000.00 (in total) due to Defendant City's conduct 13 and actions as alleged in this Second Amended Complaint 14 VI.
15 FIFTH CAUSE OF ACTION
16 (Breach of Contract- Promissory Estoppel- 2014 Purchase Agreement) 17 49. Plaintiff Helena incorporates herein by this reference the allegations in Paragraphs I 18 through 24 above, as though the same were fully set forth herein 19 50. By way of the conduct described above, specifically Paragraphs 19-22, and 24, 20 Defendant City promised, assured, and represented to Plaintiff Helena that Defendant City would 21 perform the City's obligations under its 2014 Purchase Agreement with Helena to acquire from Helena 22 the Lacey Property in exchange for the Kings Industrial Park Property, and to relocate Helena's 23 existing improvements to the new site and, if not feasible to move, then to construct equivaient new 24 improvements on the new site at the City's sole cost and expense . 25 51. In so doing, Defendant City knew or should have known that Plaintiff Helena would be 26 reasonably induced to rely on Defendant City's promises, assurances and representations as described 27 in Paragraphs 19-22, and 24, above.
28 52. Plaintiff Helena reasonably relied on Defendant City's promises, assurances or 14 PLAINTIFF HELENA AGRI-ENTERP RISES, LLC'S SECOND AMENDED COMPLAINT

1 representations described above, and was induced to take the actions described in Paragraph 23 above, 2 and to participate, at significant cost, in extensive discussions in a collaborative effort to develop a 3 definitive written agreement embodying the terms set forth in the parties' 2014 Purchase Agreement, 4 as alleged in Paragraph 24 above.
5 53. Defendant City failed to perform on their promises~ assurances and representations 6 made to Plaintiff regarding the 2014 Purchase Agreement. 7 54. As a proximate result of Defendant City~s failure to perform according to the promises, 8 assurances, and representations made to Plaintiff, Plaintiff has been damaged and injustice can be 9 avoided only by enforcing Defendant City's promises, assurance and representations completely. 10 55. As a proximate result of Defendant City's breach ofthe 2014 Purchase Agreement, and 11 other wrongful conduct, Helena has been damaged in an amount to be established according to proof at 12 trial, including, but not limited to, the substantial fees and costs incurred in good faith participation and 13 cooperation with the City in carrying out the terms of the partie s' 2014 Purchase Agreement; all fees 14 and costs associated with Helena being required to relocate its business facilities and all other damages 15 resulting therefrom, including loss of Helena's operations and profits; additional damages to be 16 suffered as a result of injury to Helena's continuing business operation s, due to its inability to expand, 17 loss of property, and related changed conditions of operations; and any and all other damages incurred 18 by Helena arising out of, and/or related to, the City's failure to perform under the 2014 Purchase 19 Agreement, and applicable law, in an amount according to proof, but in no event less than 20 $15,000 ,000.00 (in total) due to Defendant City's conduct and actions as alleged in this Second 21 Amended Complaint.
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15 PLAINTIFF HELENA AGRl-ENTERPRISES, LLC'S SECOND AMENDED COMPLAINT

1 WHEREFORE, Plaintiff Helena prays for judgment against Defendant City as follows:
2 1. For compensatory damages , in an amount according to proof to be established at trial, 3 but in no event less than $15,000,000.00;
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2. 3.

4. For its attorneys' fees and costs, as the prevailing party; For its costs of suit incurred herein~ and
For such other and further reliefas the Court may deem proper.

Dated: October 8, 2018
8 DLA PIPER LLP (US)
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/ .'-·:1- I > . /')y ']/
//v.f~;~J:... <:. , //t.._f(£&,..___
By __ ~~----~=------------------MARK E. MCKEEN

JULIA BRIGHTON
Attorneys for Plaintiff
HELENA AGRI-ENTERPRISES, LLC, a
Delaware limited liability company, formerly
known as HELENA CHEMICAL COMPANY,
a Delaware corporation
16 PLAINTIFF HBLENA AGRI-ENTERPRISES, LLC'S SECOND AMENDED COMPLAINT

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PROOF OF SERVICE
I am employed in the County of San Francisc'Q, State of California. I am over the age of 18 and not a party to the within cause. My business address is DLA Piper LLP (US)~ 555 Mission Street, Suite 2400, San Francisco, California 941 05~2933.

On October 8, 2018, I served a copy ofth~ within document(s):

SECOND AMENDED COMPLAINT FOR DAMAGES FOR BREACH OF
CONTRACT; BREACI{ OF COVENANT OF GOOD FAITH AND FAIR
DEALING; BREACH OF CONTRACT- PROMISSORY ESTOPPEL
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by transmitting via electrontc mail the document(s} listed above to the e-mail addresses set forth below on this date before 5·00 p.m.
by placmg the document(s) listed above in a sealed envelope with postage thereon fully prepaid, the United States mail at San Francisco, California addressed as set forth below. by pl .. cmg the document(s) listed above m a sealed Delivery Service envelope and affixing a pre-pa1d air bill, and causing the envelope to be delivered to a Delivery Service agent for next da) delivery.
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by having First Legal Network personally deliver the document(s) listed above to the person(s) at the address(es) set forth below.

Robert M. Dowd, Esq.

Mario Zamora, Esq.

Jaskaran S. Gill, Esq.

Griswold, Lasalle, COBB, DOWD & GIN, L.L.P.
111 East Seventh Street
Hanford, California 93230
Tel: (559) 584-6656
I declare under penalty ofpetjury under the laws ofthe State ofCalifomia that the above is true and correct. Executed on October 8, 2018, at San Francisco, California.

Travidf' Jensen
' WEST\278g1702~1