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Resolution No. 8597
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16' 17 18 19 20 21 22 23 24 25 26 27 28 RESOLUTION NO. 8597 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF VERNON APPROVING AND AUTHORIZING THE EXECUTION OF STANDARD OFFER, AGREEMENT AND ESCROW INSTRUCTIONS FOR PURCHASE OF REAL ESTATE BY AND BETWEEN THE CITY OF VERNON AND SAINT-GOBAIN CONTAINERS, INC. FOR PROPERTY LOCATED AT 4855 E. 52ND PLACE WHEREAS, the City of Vernon desires to purchase certain real property in the City, commonly known as 4855 E. 52nd Place (the "Property") owned by Saint-Gobain Containers, inc. ("Saint-Gobain") for future development; and WHEREAS, the Saint-Gobain has agreed to sell the Property to the City on negotiated terms, which the City has determined to be fair and reasonable; and WHEREAS, on November 17, 2004, the Finance Committee considered the recommendation of Bruce V. Malkenhorst, Director of Finance, dated November 10, 2004, that the Property be purchased and the necessary documents executed to implement the purchase. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF VERNON AS FOLLOWS: SECTION 1: The City Council of the City of Vernon hereby finds and determines that the recitals contained hereinabove are true and correct. SECTION 2: The City Council of the City of Vernon hereby approves the Standard Offer, Agreement and Escrow Instructions for Purchase of Real Estate with Saint-Gobain, a copy of which is attached hereto as Exhibit A and incorporated by reference. SECTION 3: The City Council of the City of Vernon hereby 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 authorizes the Mayor and the City Clerk to execute said Agreement for, and on behalf of, the City of Vernon. SECTION 4: The City Council of the City of Vernon hereby authorizes the City Administrator, or his designee, to execute any and all documents as shall be required to complete the acquisition of the Property and to accomplish the close of escrow consistent with the terms of said Agreement approved herein. SECTION 5: The City Clerk of the City of Vernon shall certify to the passage of this resolution, and thereupon and thereafter the same shall be in full force and effect. APPROVED AND ADOPTED this 17th day of November, 2004. ATTEST: BRUCE V. MALKENHORST, City Clerk LEONIS C. MALBIJRG, Wayor - 2 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 STATE OF CALIFORNIA ) ) ss COUNTY OF LOS ANGELES ) I, BRUCE V. MALKENHORST, City Clerk of the City of Vernon, do hereby certify that the foregoing Resolution, being Resolution No. 8597, was duly adopted by the City Council of the City of Vernon at a regular meeting of the City Council duly.held on Wednesday, November 17, 2004, and thereafter was -duly signed by the Mayor of the City of Vernon. (SEAL) LJL\V VL:! V • L'LL1L L\L'J LY 11V 1\r.Jt, V1 L.y \..i c11n - 3 - EXHIBIT 0 AIR COMMERCIAL REAL ESTATE ASSOCIATION STANDARD OFFER, AGREEMENT AND ESCROW INSTRUCTIONS FOR PURCHASE OF REAL ESTATE (Non -Residential) November 3, 2004 1. Buyer (Date for Reference Purposes) 1.1 The City of Vernon (Buyer) hereby offers to purchase the real property, hereinafter described, from the owner thereof ('Seller (collectively,. the 'Parties' or individually, a 'Party') through an escrow ("Escrow) to close on December 22, 2004 ('Expected Closing Date), but not later than December 27, 2004 (the 'Outside Closing Date*) to be held by North American Title Company (Attn: Tina De Bow) ("Escrow Hoiden whose address is 520 North Brand Blvd., Glendale, California 91203, Phone No. 818- 551-5370, Facsimile No. 818-240-9884 upon the terms and conditions set forth in this agreement ('Agreement'). Buyer shall have no right to assign Buyers rights hereunder. 1.2 The term 'Date of Agreement as used herein shall be the date when by execution and delivery (as defined in paragraph 20.2) of this document or a subsequent counteroffer thereto, Buyer. and Seller have reached agreement in writing whereby Seller agrees to sell, and Buyer agrees to purchase, the Property upon terms accepted by both Parties. 2. Property 2.1 The real property ('Property') that is the subject of this offer consists of approximately 10.6 acres of industrial land and the improvements located thereon located in the City of Vernon, County of Los Angeles, State of California, and is commonly known by the street address of 4855 E. 52n0 Place, Vernon, California 90040, legally described as: to be described in escrow (APN: 6314-022-008, 6314-019-009, 6314-020-011, 6314-020-003). 2.2 if the legal description of the Properly is not complete or is inaccurate, this Agreement shall not be invalid and the legal description shall be completed or corrected to meet the requirements of North American Title Company (Attn: Victor Greene) ("Title Company'), which shah issue the title policy hereinafter described. 2.3 The Property includes, at no additional cost to Buyer, the permanent improvements thereon, including those items which pursuant to applicable law are a part of the Property, as well as the following items, if any, owned by Seller and at present located on the Property: electrical distribution systems (power panel, buss ducting, conduits, disconnects, lighting fixtures); telephone distribution systems (lines, jacks and connections only); space heaters; heating, ventilating, air conditioning equipment ('HVAC7; air lines; fire sprinkler systems; security and fire detection systems; carpets; window coverings; wall coverings jcollectively, the 'Improvements) 2.4 The fire sprinkler monitor is owned by Seller and included in the Purchase Price. 2.5 Except as provided in Paragraph 2.3, the Purchase Price does not include Sellers personal p property, furniture and furnishings (including, without limitation, the Glass Equipment and the Oxygen Plan Equipment (as such terms are defined in the Addendum Paragraph 21.6), and all other Seller's equipment which is used in connection with its glass packaging and other business operations), all of which shall be removed by Seller prior to Closing. See Addendum Paragraph 21.6. 3. Purchase Price 3.1 The purchase price ( Purchase Price') to be paid by Buyer to Seller for the Property shah be $11,000,000.00; payable as follows: Total Purchase Price: $11,000,000.00 $11.000.000:00 4. Deposits 4.1 Buyer shall deliver to Escrow Holier a check in the sum of $250,000 when both Parties have executed this Agreement and the executed Agreement has been delivered to. Escrow Holder. When cashed!, the check shah be deposited into the Escrow's trust account to be applied toward the Purchase Price of the Property at the Closing. 4.2 Escrow Holder shall deposit the funds deposited with it by Buyer pursuant to paragraphs 4.1 (the 'Deposit), in a State or Federally chartered bank in an interest -bearing account whose term is appropriate and consistent with the timing requirements of this transaction. The interest therefrom shall accrue to the benefit of Buyer, who hereby acknowledges that there may be penalties or interest forfeitures if the applicable instrument is redeemed prior to its specified maturity. Buyers Federal Tax identification Number is 95.60000808. NOTE: Such interest bearing account cannot be opened until Buyers Federal Tax Identification number is provided. 5. Real Estate Brokers: None. 5.1 Buyer and Seiler each represent and warrant to the other that helsheld has had no dealings with any person, firm, broker or finder in connection with the negotiation of this Agreement and/or the consummation of the purchase and sale contemplated herein, and no broker or other person, firm or entity, other than said Brokers islare entitled to any commission or finders fee in connection with this transaction as the result of any dealings or ads of such Party. Buyer and Seller do each hereby agree to indemnify, defend, protect and hold the other harmless from and against any costs, expenses or liability for compensation, commission or charges which may be claimed by any broker, finder or other similar party by reason of any dealings or act of the indemnifying Party. 6. Escrow and Closing 6.1 Upon acceptance hereof by Seller, this Agreement, including any counteroffers incorporated herein by the Parties, shall constitute not only the agreement of purchase and sale between Buyer and Seller, but also instructions to Escrow Holder for the consummation of the Agreement through the Escrow. Escrow Holder shall not prepare any further escrow instructions restating or amending the Agreement unless specifically so instructed by the Parties or a Broker herein. Subject to the reasonable approval of the Parties, Escrow Holder may, however, include its standard general escrow provisions. 6.2 As soon as practical after the receipt of this Agreement and any relevant counteroffers, Escrow Holder shall ascertain the Date of Agreement as defined in paragraphs 1.2 and 17.2 and advise the Parties and Brokers, in writing, of the date ascertained. Escrow Holder is hereby authorized and instructed to conduct the Escrow in accordance with this Agreement, applicable law and custom and practice of the community in which Escrow Holder is located, including any reporting requirements of the Internal Revenue Initials PAGE 1 Initials Code. In the event of a conflict between the law of the state where the Property is located and the law of the state where the Escrow Holder is located, the law of the state where the Property is located shall prevail. 6.3 Subject to satisfaction of the contingencies herein described, Escrow Holder shall dose this escrow (the "Closingl by recording a grant deed and the other documents required to be recorded, and by disbursing the funds and documents in accordance with this Agreement. 6.4 Buyer and Seller shall each pay one-half of the Escrow Holder s charges and Seiler shall pay the usual recording fees and any required documentary transfer taxes. Seller shall pay, the premium for a standard coverage owners or joint protection policy of title insurance. Buyer shall pay for any charges for ALTA extended coverage, and for any title endorsements that Buyer may request 6.5 Escrow Holder shall verify that all of Buyers contingencies have been satisfied or waived prior to Closing. The matters contained in paragraphs 7.1 subparagraphs (b), (c), (A (e), (g), O, (k), and (6, 7.4, 7.5, 10,11, 12,14,17 and 18 are, however, matters of agreement between the Parties only and are not instructions to Escrow Holder. 6.6 If this transaction is terminated for iron-satisfadion and non waiver of a Buyers Contingency, as defined in paragraph 9.2, then neither of the Parties shall thereafter have any liability to the other under this Agreement, except to the extent of a breach of any affirmative covenant or warranty in this Agreement In the event of such termination, Buyer shall be promptly refunded all funds deposited by Buyer with Escrow Holder, less only Title Company and Escrow Holder cancellation fees and costs, all of which shall be Buyers obligation. 6.7 The Closing shall occur on the Expected Closing Date, or as soon thereafter as the Escrow is in condition for Closing; provided, however, that if the Closing does riot occur by the Expected Closing Date and said Date is not extended by mutual instructions of the Parties, a Party not then in default under this Agreement may notify the other Party and Escrow Holder, in writing that, unless the Closing occurs within 5 business days following said notice, the Escrow shall be deemed terminated without further notice or instructions. 6.8 Except as otherwise provided herein, the termination of Escrow shall not relieve or release either Party from any obligation to pay Escrow Holders fees and costs or constitute a waiver, release or discharge of any breach or default that has occurred in the performance of the obligations, agreements, covenants or warranties contained therein. 7. Contingencies to Closing 7.1 The Closing of this transaction is contingent upon the satisfaction or waiver of the following contingencies. IF BUYER FAILS TO NOTIFY ESCROW HOLDER, IN WRITING, OF THE APPROVAL OF ANY OF SAID CONTINGENCIES WITHIN THE TIME SPECIFIED THEREIN, IT SHALL BE CONCLUSIVELY PRESUMED THAT BUYER HAS DISAPPROVED SUCH ITEM, MATTER OR DOCUMENT. Buyers conditional approval shall constitute disapproval, unless provision is made by the Seller within the time specified therefor by the Buyer in such conditional approval or by this Agreement, whichever is later, for the satisfaction of the condition imposed by the Buyer. Escrow Holder shall promptly provide all parties with copies of any written disapproval or conditional approval which it receives. With regard to the contingencies set forth in this Paragraph 7.1. the time periods set forth in Paragraph 21.4 of the Addendum shallcontrol. Further details as to Buryees Contingencies (including the time periods for approving such Contingencies) are set forth in Paragraphs 21.4 and 21.5 of the Addendum and shall control over any terms set forth in this pre-printed Agreement. (a) Disclosure. Seller shall make all disclosures required by law. Seller shall provide Buyer with a completed AIR Commercial Real Estate Association ('AIR*) Property Information Sheet as modified, in substantially the form set forth in Exhibit "A" ('Property Information Sheet") and the AIR "Sellers Mandatory Disclosure Statement" as modified, in substantially the form set forth in Exhibit "B" concerning the Property, duly executed by or on behalf of Seller within 10 days following the Date of Agreement. Buyer shall approve or disapprove the matters disclosed. (b) Physical Inspection. Buyer shall satisfy itself with regard to the physical aspects and size of the Property. (c) Hazardous Substance Conditions Report. Buyer shalt satisfy itself with regard to the environmental aspects of the Property. Seller recommends that Buyer obtain a Hazardous Substance Conditions Report concerning the Property and relevant adjoining properties. Any such report shall be paid for by Buyer. A `Hazardous Substance" for purposes of this Agreement is defined as any substance whose nature and/or quantity of existence, use, manufacture, disposal or effect, render it subject to Federal, state or local regulation, investigation, remediation or removal as potentially injurious to public health or welfare. A "Hazardous Substance Condition' for purposes of this Agreement is defined as the existence on, under or relevantly adjacent to the Property of a Hazardous Substance that would require remediation and/or removal under applicable Federal, state or local law. (d) Soil Inspection. Buyer shall satisfy itself with regard to the condition of the soils on the Property. Seller recommends that Buyer obtain a soli test report. Any such report shall be paid for by Buyer. Seller shall provide Buyer copies of any soils report that Seller may have within 10 days of the Date of AgreemenL (a) Govemmental Approvals. Buyer shall satisfy itself with regard to approvals and permits from governmental agencies or departments which have or may have jurisdiction over the Property and which Buyer deems necessary or desirable in connection with its intended use of the Property, including, but not limited to, permits and approvals required with respect to zoning, planning, building and safety, fire, police, handicapped and Americans with Disabilities Act requirements, transportation and environmental matters. (4 Conditions of Title. Escrow Holder shall cause a current preliminary title report ("Title ReporV) concerning the Property issued by the Title Company, as well as legible copies of all documents referred to in the Title Report. ('Underlying Documentsl to be delivered to Buyer within 5 days following the Date of Agreement. Buyer shall satisfy itself with regard to the condition of title. The disapproval of Buyer of any monetary encumbrance, which by the terms of this Agreement is not to remain against the Property after the Closing, shall not be considered a failure of this contingency, as Seger shall have the obligation, at Sellers expense, to satisfy and remove such disapproved monetary encumbrance at or before the Closing. (g) Survey. Buyer shall satisfy itself with regard to any ALTA tide supplement based upon a survey prepared to American Land Title Association CALTA) standards for an owners policy by a licensed surveyor, showing the legal description and boundary lines of the Property, any easements of record, and any improvements, poles, structures and things located within 10 feet of either side of the Property boundary Ones. Any such survey shall be prepared at Buyers direction and expense. If Buyer has obtained a survey and approved the ALTA title supplement, Buyer may elect within the period allowed for Buyers approval of a survey to have an ALTA extended coverage owners form of title policy, in which event Buyer shall pay any additional premium attributable thereto. (h) Other Agreements. Seger shall within 10 days of the Date of Agreement provide Buyer with legible copies of all other agreements ('Other Agreemerrtsl known to Seller that will affect the Property after Closing. Buyer shag satisfy itself with regard to such agreements. - () Personal Property. In the event that any personal property is included in the Purchase Price, Buyer shall satisfy itself with regard to the title condition of the such personal property. Seiler recommends that Buyer obtain a UCC-1 report. Any such report shall be paid for by Buyer. Seller shall provide Buyer copies of any Dens or encumbrances affecting, such personal property that it is aware of within 14 days of the Date of Agreement O Destruction, Damage or Loss. There shall not have -occurred prior to the Closing, a destruction of, or damage or loss to, the Property or any portion thereof (other than the structures thereon), from any cause whatsoever, which would cost more than $10,000.00 to repair or cure. If the cost of repair or cure is $10,000.00 or less, Seller shall repair or cure the loss prior to the Closing. Buyer shag have the option, within 10 days after receipt of written notice of a loss costing more than $10,000.00 to repair or cure, to either terminate this transaction or to purchase the Property notwithstanding such loss, but without deduction or offset against the Initials PAGE 2 Initials Purchase Price. If the cost to repair or cure is more than $10,000.00, and Buyer does not elect to terminate this transaction, Buyer shah be entitled to any insurance proceeds applicable to such loss. Unless otherwise notified in writing, Escrow Holder shall assume no such destruction, damage or loss has occurred prior to Closing. (k) Material Change. Buyer shah have 10 days following receipt of written notice of a Material Change within which to satisfy itself with regard to such change. 'Material Change' shall mean a change in the status of the use, occupancy, tenants, or condition of the Property (other than a change in the physical condition of any structures thereon) that occurs after the date of this offer and prior to the Closing. Unless otherwise notified in writing, Escrow Holier shall assume that no Material Change has occurred prior to the Closing. (n Seller Performance. The delivery of all documents and the due performance by Seller of each and every undertaking and agreement to be performed by Seller under this Agreement. (m) Warranties. Each representation and warranty of Seiler herein be true and correct as of the Closing. Escrow Holder shah assume that this condition has been satisfied unless notified tathe contrary in writing by any Party prior to the Closing. (n) Closure Certificate. Seller shall have obtained a Certificate of Closure from the City of Vernon. Buyer agrees that it will not impose any conditions on the issuance of such Certificate of Closure other than It would impose in connection with other transactions in which the buyer was not acquiring the subject property. 7.2 All of the contingencies specified in sub -paragraphs (a) through (p) of paragraph 7.1 are for the benefit of, and may be waived by, Buyer, and may be elsewhere herein referred to as `Buyer's Contingencies." Buyer's Contingencies are further described in Paragraph 21 of the Addendum and shall be in addition to those set forth in subparagraphs (a) through (n) of paragraph 7.1 of the Pre -Printed Form. 7.3 If any Buyer's Contingency or any other matter subject to Buyers approval is not approved (with silence constituting disapproval) as provided for herein in a timely mariner {"Disapproved Iteml, Seiler shall have the right but not the obligation within 10 days following the receipt of notice of Buyer's disapproval or deemed disapproval to elect to cure such Disapproved Item prior .to the Expected Closing Date ("Seller's Election'). Seller's falltue to give to Buyer within such period, written notice of Sellers commitment to cure such Disapproved Item on or before the Expected Closing Date shall be conclusively presumed to be Sellers Election riot to cure such Disapproved Item. If Seller elects, either by written notice or failure to give written notice, not to cure a Disapproved Item, Buyer shah have the election, within 10 days after Sellers Election to either accept title to the Property subject to such Disapproved Item, or to terminate this transaction. Buyers failure to notify Seller in writing of Buyers election to accept title to the Property subject to the Disapproved Item without deduction or offset shall constitute Buyers election to terminate this transaction. Unless expressly provided otherwise herein, Sellers right to cure shall not apply to the remediation of Hazardous. Substance Conditions. Unless the Parties mutually instruct otherwise, if the time periods for the satisfaction of contingencies or for Sellers and Buyers said Elections would expire on a date after the Expected Closing Date; the Expected Closing Date shah be deemed extended for 3 business days following the expiration of. (a) the applicable contingency period(s), (b) the period within which the Seiler may elect to cure the Disapproved Item, or (c) if Seller elects not to cure, the period within which Buyer may elect to proceed with this transaction, whichever is later. 7.4 Buyer understands and agrees that unth such time as all Buyers Contingencies have been satisfied or waived, Seller andfor its agents may solicit, entertain and/or accept back-up offers to purchase the Property. 7.5 The Parties acknowledge that extensive local, state and Federal legislation establish broad liability upon owners and/or users of real property for the investigation and remediation of Hazardous Substances. The determination of the existence of a Hazardous Substance Condition and the evaluation of the impact of such a condition are highly technical. The Parties acknowledge that they have been advised to consult their own technical and legal experts with respect to the possible presence of Hazardous Substances on the Property or adjoining properties. The Parties hereby assume all responsibility for the impact of such Hazardous Substances upon their respective interests herein. 8. Documents Required at or before Closing: 8.1 Prior to the Closing date Escrow Holder shah obtain an updated Title Report concerning the Property from the Title Company and provide copies thereof to each of the Parties. 8.2 Seller shall deliver to Escrow Holder in time for delivery to Buyer at the Closing: (a) Grant deed, duly executed and in recordable form, conveying fee title to the Property'to Buyer. (b) Other Agreements together with duly executed assignments thereof by Seller and Buyer. (c) An affidavit executed by Seller to the effort that Seiler is not a 'foreign person' within the meaning of Internal Revenue Code Section 1445 or successor statutes. If Seller does not provide such affidavit in form reasonably satisfactory to the Escrow Holder at least 3 business days prior tathe Closing, Escrow Holder shall at the Closing deduct from Sellers proceeds and remit to Internal Revenue Service such sum as is required by applicable Federal law with respect to purchases from foreign sellers. (d) If the Property is located in California. an affidavit executed by. Seller to the effect that Seller is not a'nonreshdenC within the meaning of California Revenue and Tax Code Section 18662 or successor statutes. if Seller does not provide such affidavit in form reasonably satisfactory to Escrow Holder at least 3 business days prior to the Closing, Escrow Holder shah at the Closing deduct from Sellers proceeds and remit to the Franchise Tax Board such sum as is required by such statute. (a) If applicable, a bill of sale, duly executed, conveying title to any included personal property to Buyer. (f) If the Seller is a corporation, a duly executed corporate resolution authorizing the execution of this Agreement and the sale of the Property. 8.3 Buyer shall deliver to Seller through escrow: (a) The rash portion of the Purchase Price and such additional sums as are required of Buyer under this Agreement shah be deposited by Buyer with Escrow Holder, by federal funds wire transfer, or any other method acceptable to Escrow Holder as immediately collectable funds, no later than 2:00 P.M. on the business day prior to the Expected Closing Date. Agreements. (b) Assumptions duly executed by Buyer of the obligations of Seller that accrue after Closing under any Other (c) If the Buyer is a corporation, a duly executed corporate resolution authorizing the execution of this Agreement and the purchase of the Property. 8.4 At Closing, Escrow Holder shah cause to be issued to Buyer a standard coverage (or ALTA extended, if elected pursuant to 7.1(g)) owners form policy of tide insurance effective as of the Closing, issued by the Title Company in the full amount of the Purchase Price, insuring title to the Property vested In Buyer, subject only to the exceptions approved by Buyer. IMPORTANT: IN A PURCHASE OR EXCHANGE OF REAL PROPERTY, IT MAY BE ADVISABLE TO OBTAIN TITLE INSURANCE IN CONNECTION WITH THE CLOSE OF ESCROW SINCE THERE MAY BE PRIOR RECORDED LIENS AND ENCUMBRANCES WHICH AFFECT YOUR INTEREST IN THE PROPERTY BEING ACQUIRED. A NEW POLICY OF TITLE INSURANCE SHOULD BE OBTAINED IN ORDER TO ENSURE YOUR INTEREST IN THE PROPERTY THAT YOU ARE ACQUIRING. 9. Proration and Adjustments. 9.1 Taxes. Applicable real property taxes and special assessment bonds shah be prorated through Escrow as of the date of the Closing, based upon the latest tax bill available. The Parties agree to prorate as of the Closing any taxes assessed against the Property by supplemental bill levied by reason of events occurring prior to the Closing. Payment of the prorated amount shall be made promptly in cash upon receipt of a copy of any such supplemental bill. Initials PAGE 3 Initials 9.2 Insurance. WARNING: Any insurance which Seller may have maintained will terminate on the Closing. Buyer is advised to obtain appropriate insurance to cover the Property. 9.3 Post Closing Matters. Any item to be prorated that is not determined or determinable at the Closing shall be promptly adjusted by the Parties by appropriate cash payment outside of the Escrow when the amount due is determined. See Paragraph 21.1 of Addendum. 10. Representation and Warranties of Seller and Disclaimers. 10.1 Selers warranties and representations shag survive the Closing (but no action for breach thereof may be brought after a date which is 30 months after the Closing) and shall not be merged into the Grant Deed, and are true, material and relied upon by Buyer in all respects. Seller hereby makes the following warranties and representations to Buyer. (a) Authority of Seger. Seller is the owner of the Property and/or has the full right, power and authority to enter into this Agreement and the documents required hereby to be executed by Seller, and to sell, convey and transfer the Property to Buyer as provided herein, and to perform Seller's obligations hereunder. (b) Corporate Actions. AN requisite corporate action has been taken by Seller in connection with the entering into this Agreement and the documents required hereby to be executed by Seller, and the consummation of the transactions contemplated hereby. (c) Signature Authority. The individuals executing this Agreement and the documents required hereby to be executed by Seiler on behalf of Seller have the legal power, right and actual authority to bind Seller to the terms and conditions hereof and thereof. (d) Binding Obligations. This Agreement and all documents required hereby to be executed by Seller are and will be valid, legally binding obligations of and enforceable against Seller in accordance with their terms, subject only to applicable bankruptcy, insolvency, reorganization, moratorium laws or similar laws or equitable principles affecting or limiting the rights of contracting parties generally. (a) Accuracy of Representations. No representation, warranty or statement of Seller in this Agreement or in any document furnished or to be fumished to Buyer pursuant hereto contains or will contain any untrue statement of a material fact, or omits or will omit to state a material fact necessary to make the statements or facts contained therein not misleading. Except to the extent set forth in writing from Seller, Seller's representations and warranties made in this Paragraph will be continuing and will be true and correct as of the Closing with the same force and effect as if remade by Seller at that time. (f) Maintenance During Escrow and Equipment Condition At Closing. Except as otherwise provided in paragraph 9.1(m) hereof, Seller shall maintain the Property until the Closing in its present condition, ordinary wear and tear and damage due to casualty excepted. (g) Hazardous Substences✓Storage Tanks. Seller has no knowledge, except as otherwise disclosed to Buyer in writing, of the existence or prior existence (during the time period that Seller owned the Property) on the Properly of any Hazardous Substance, nor of the existence or prior existence (during the time period that Seger owned the Property) of any above or below ground storage tank. (h) Compliance. Seger has no knowledge of any aspect or condition of the Property (excluding any structures thereon) which violates applicable laws, rules, regulations, codes or covenants, conditions or restrictions, or that there is any unfulfilled order or directive of any applicable governmental agency requiring any investigation or remediation be performed on the Property (other than any structures thereon). @ Changes in Agreements. Prior to the Closing, Seger will not violate or modify any Other Agreement, or create any new leases or Other Ag(eements affecting the Property, without Buyers written approval, which approval will not be unreasonably withheld. Property. () Possessory Rights. Seller has no knowledge that anyone will, at the Closing, have any right to possession of the (k) Mechanics' Liens. There are no unsatisfied mechanic's or materialman's lien rights concerning the Property. p) Actions, Suits or Proceedings. Seller has no knowledge of any actions, suits or proceedings pending or threatened before any commission, board, bureau, agency, arbitrator, court or tribunal that would affect the Property or the right to occupy or utilize same. (m) Notice of Changes. Seller will promptly notify Buyer and Brokers in writing of any Material Change (see paragraph 9.1(n)) affecting the Property that becomes known to Seger prior to the Closing. (n) No Seller Bankruptcy Proceedings. Seger is not the subject of a bankruptcy, insolvency or probate proceeding. (o) Personal Property. Seger has no knowledge that anyone will, at the Closing, have any right to possession of any personal property included in the Purchase Price nor knowledge of any liens or encumbrances affecting such personal property, except as disclosed by this Agreement or otherwise in writing to Buyer. 10.2 Buyer hereby acknowledges that, except as otherwise stated in this Agreement, Buyer is purchasing the Property in its existing condition and will, by the time caged for herein, make or have waived all inspections of the Property Buyer believes are necessary to protect its own interest in, and its contemplated use of, the Property. The Parties acknowledge that, except as otherwise stated in this Agreement, no representations, inducements, promises, agreements, assurances, oral or written, concerning the Property, or any aspect of the occupational safety and health laws, Hazardous Substance laws, or any other act, ordinance or law, have been made by either Party, or relied upon by either Party hereto. 10.3 In the event that Buyer (independently or by Seger disclosure) learns that a Seller representation or warranty might be untrue prior to the Closing, and Buyer elects to purchase the Property anyway then, and in that event, Buyer waives any right that it may have to bring an action or proceeding against Seller regarding said representation or warranty. 10.4 Any environmental reports, soils reports, surveys, and other similar documents which were prepared by third party consultants and provided to Buyer by Seller or Sellers representatives (collectively, the "Sellers Third Party Reports"), have been delivered as an accommodation to Buyer and without any representation or warranty as to the sufficiency, accuracy, completeness, and/or validity of said documents, all of which Buyer refies on at its own risk. Seller believes said documents to be accurate, but Buyer is advised to retain appropriate consultants to review said documents and investigate the Property. If the transaction fails to close, other than as a result of Sellers default, all of the Seller's Third Party Reports shall be delivered to Seller at no cost to Setter. 10.5 Disdaimer of Representations or Warranties by Seller. (a) Buyer acknowledges to Seller that as of the Closing it will have conducted any and all inspections, investigations, tests, analyses, reviews and studies that Buyer may have desired and will have evaluated the Property (including, without limitation, the physical nature and environmental condition of the Property), to the full and complete satisfaction of Buyer and that Buyer will acquire the Property solely on the basis of the foregoing and the title insurance protection afforded by the title insurance policy, and not on the basis of any information provided or any representations, warranties or covenants made by Seller, or any person acting on Sellers behalf, other than the express representations, warranties and covenants of Seger set forth in this Agreement. (b) EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, BUYER ACKNOWLEDGES AND AGREES THAT THE SALE OF THE PROPERTY HEREUNDER IS AND WILL BE MADE ON AN "AS -IS, WHERE -IS' BASIS AND WITH ALL FAULTS AS OF THE DATE OF THE CLOSE OF ESCROW, WITHOUT ANY REPRESENTATIONS OR WARRANTIES AS TO THE PHYSICAL CONDITION OR ENVIRONMENTAL CONDITION OF THE PROPERTY, OR ANY OTHER REPRESENTATIONS OR WARRANTIES. Initials PAGE 4 Initials EXCEPT TO THE .EXTENT EXPRESSLY SET FORTH IN THIS AGREEMENT, SELLER HAS NOT MADE, DOES NOT MAKE, AND SPECIFICALLY NEGATES AND DISCLAIMS ANY REPRESENTATIONS, WARRANTIES, COVENANTS OR OBLIGATIONS OF ANY KIND OR CHARACTER WHATSOEVER, WHETHER EXPRESS OR IMPLIED, ORAL OR WRITTEN, PAST, PRESENT, FUTURE OR OTHERWISE, OF, AS, TO, CONCERNING OR WITH RESPECT TO, THE PROPERTY, OR THE MERCHANTABILITY OR FITNESS OF THE PROPERTY FOR ANY PARTICULAR PURPOSE. (c) Buyer further acknowledges that certain information and materials provided or to be provided by Seiler or any person acting on Seller's behalf with respect to the Property may have been obtained from third parties (the 'Third Party Reports'), and that Seller has not made any independent investigation or verification of information and materials set forth in the Third Party Reports, and that Seller therefore disclaims any representations or warranties as to the accuracy or the completenessof information and materials set forth in the Third Party Reports. Seller will not be liable for any negligent misrepresentation set forth in a Third Party Reports that is not the result of a misrepresentation by the Seller or its agents or employees to the consultant preparing the Third Party Reports. (d) As used in this Agreement, the phrase "Sellers knowledge' (or similar phrase) means the actual, present knowledge of Jeffrey A. Forgang whose title is vice president, environmental, health & safety, without any duty of inquiry or investigation. Seger represents and warrants to Buyer that Jeffrey A. Forgang is the person employed by Seller who is most knowledgeable about the condition of the Property and best able to make the representations and warranties set froth herein. 11. Possession. Possession of the Property shall be given to Buyer at the Closing free and dear of any claims of possession by any third parties. 12. Buyer's Entry. At any time during the Escrow period, Buyer, and its agents and representatives, shag have the right at reasonable times upon reasonable advance notice to Seller, to enter upon the Property for the purpose of making inspections and tests specified in this Agreement. No destructive or physically invasive testing shag be conducted, however, without Sellers prior approval which shall not be unreasonably withheld. Following any such entry or work, unless otherwise directed in writing by Seller, Buyer shag return the Property to the condition it was in prior to such entry or work, including the recompaction or removal of any disrupted soil or material as Seller may reasonably direct. All such inspections and tests and any other work conducted or materials furnished with respect to the Property by or for Buyer shall be paid for by Buyer as and when due and Buyer shag indemnify defend, protect and hold harmless Seller and the Property of and from any and all claims, liabilities, losses, expenses (including reasonable attorney's fees),damages, including those for injury to person or property, arising out of or relating to any such work or materials or the acts or omissions of Buyer, its agents or employees in connection therewith. If Seiler sloes not provide its consent to entry onto the Property within 24 hours of request; or consent to invasive testing within 2 business days of request, the Contingency Period (as defined in Paragraph 21.4 of the Addendum) and the date of Closing shall each be extended by the number of days of delay in approving the entry or the testing. See Paragraph 21.1 of Addendum. 13. Further Documents and Assurances. The Parties shall each, diligently and in good faith, undertake all actions and procedures reasonably required to place the Escrow in condition for Closing as and when required by this Agreement. The Parties agree to provide all further information, and to execute and deliver all further documents, reasonably required by Escrow Holder or the Tile Company, 14. Attorneys' Fees. ' If any Party brings an action or proceeding (Including arbitration) involving the Property whether founded in tort, contract or equity, or to declare rights hereunder, the Prevailing Party (as hereafter defined) in any such proceeding, action, or appeal thereon, shall be entitled to reasonable attorneys' fees. Such fees may be awarded, in the same suit or recovered in a separate suit, whether or not such action or proceeding is pursued to decision or judgment The term, 'Prevailing Party' shall include, without limitation, a Party who substantially obtains or defeats the relief sought, as the case may be, whether by .compromise, settlement, judgment, or the abandonment by the other Party of its claim or defense. The attorneys' fees award shag not be computed in accordance with any court fee schedule, but shag be such as to fully reimburse all attorneys' fees reasonably incurred. 15. Prior Agreements/Amendments. 15.1 This Agreement supersedes any and all prior agreements between Seller and Buyer regarding the Property. 15.2 Amendments to this Agreement are effective only if made in writing and executed by Buyer and Seiler. 16. Notices. 16.1 Whenever any Party or Escrow Holder herein shag desire to give or serve any notice, demand, request, approval, disapproval or other communication, each such communication shag be in writing and shag be delivered personally, by messenger or by mail, postage prepaid, to the address set forth in this Agreement or by facsimile transmission. 16.2 Service of any such communication shag be deemed made on the date of actual receipt if personally delivered. Any such communication sent by regular mail shall be deemed given 48 hours after the same is mailed. Communications sent by United States Express Mail or overnight courier that guarantee next day delivery shag be deemed delivered 24 hours after delivery of the same to the Postal Service or courier. Communications transmitted by facsimile transmission shag be deemed delivered upon telephonic confirmation of receipt (confirmation report from fax machine is sufficient), provided a copy is also delivered via delivery or mail. If such communication is received on a Saturday, Sunday or legal holiday, or after 5:00 p.m. (PT) it shall be deemed received on the next business day. 16.3 Any Party hereto may from time to time, by notice in writing, designate a different address to which, or a different person or additional persons to whom, all communications are thereafter to be made. 17. Duration of Offer. 17.1 if this offer is not accepted by Seller on or before 5:00 P.M. according to the timestandard applicable to the City of Vernon, California on a date which is 5 days after the date first above written, it shall be deemed automatically revoked. 17.2 The acceptance of this offer, or of any subsequent counter offer hereto, that creates an agreement between the Parties as described in paragraph 1.2, shall be deemed made upon delivery to the other Party herein of a TIuly executed writing unconditionally accepting the last outstanding offer or counteroffer. 18. Damages For Default 18.1 Default by Seller. IF ESCROW DOES NOT CLOSE DUE TO THE DEFAULT OR FAILURE TO PERFORM OF SELLER, BUYER MAY ELECT EITHER TO: (A) ENFORCE SPECIFIC PERFORMANCE OF THIS AGREEMENT AGAINST SELLER AND MAKE A CLAIM FOR ALL LOSSES, COSTS, AND DAMAGES (INCLUDING, WITHOUT LIMITATION, LOSSES ARISING OUT OF THE LOSS OF USE OF THE PROPERTY, THE COSTS OF OBTAINING THE USE OF ALTERNATIVE PROPERTY, AND ANY DIMINUTION OF THE VALUE OF THE PROPERTY, AND OTHER CONSEQUENTIAL DAMAGES, AS WELL AS REASONABLE ATTORNEYS' FEES AND COSTS); OR (B) TERMINATE THIS PURCHASE AGREEMENT AND ESCROW BY WRITTEN NOTICE DELIVERED TO SELLER IN WHICH EVENT THE DEPOSIT SHALL BE RETURNED TO BUYER AND SELLER MAY MAKE A CLAIM Initials PAGE 5 Initials FOR ALL DAMAGES AS DESCRIBED IN CLAUSE A ABOVE. FOLLOWING THE RESOLUTION OF ANY CLAIM MADE HEREUNDER (INCLUDING SELLER'S PAYMENT IN GOOD FUNDS OF ANY DAMAGES AWARDED TO BUYER), NEITHER PARTY HERETO SHALL HAVE ANY FURTHER OBLIGATION. OR LIABILITY TO THE OTHER HEREUNDER. 18.2 Default by Buyer. IN THE EVENT THAT THE CLOSING AND THE CONSUMMATION OF THE TRANSACTIONS HEREIN CONTEMPLATED DO NOT OCCUR BY REASON OF ANY DEFAULT OF BUYER, BUYER AND SELLER ACKNOWLEDGE THAT IT WOULD BE IMPRACTICAL AND EXTREMELY DIFFICULT TO ESTIMATE THE DAMAGES WHICH SELLER WILL SUFFER. THEREFORE BUYER AND SELLER HEREBY AGREE THAT A REASONABLE ESTIMATE OF THE DAMAGES THAT SELLER WOULD SUFFER IN THE EVENT THAT BUYER SO DEFAULTS IS AND WILL BE, AS SELLER'S SOLE AND EXCLUSIVE REMEDY (WHETHER AT LAW OR IN EQUITY), AN AMOUNT EQUAL TO THE DEPOSIT (INCLUDING ALL ACCRUED INTEREST THEREON). SAID AMOUNT WILL BE THE FULL, AGREED AND SOLE AMOUNT OF MONETARY DAMAGES FOR THE DEFAULT OF BUYER, ALL OTHER CLAIMS TO DAMAGES OR OTHER REMEDIES, INCLUDING WITHOUT LIMITATION THE REMEDY OF SPECIFIC PERFORMANCE, BEING HEREIN EXPRESSLY WAIVED BY SELLER. THE PAYMENT OF SUCH AMOUNT IS NOT INTENDED AS A FORFEITURE OR PENALTY, BUT IS INTENDED TO CONSTITUTE LIQUIDATED DAMAGES TO SELLER PURSUANT TO CALIFORNIA CIVIL CODE §§1671, 1676 AND 1677. SELLER HEREBY WAIVES THE PROVISIONS OF CALIFORNIA CIVIL CODE §3389. THIS AGREEMENT WILL THEREUPON BE TERMINATED AND NEITHER PARTY WILL HAVE ANY FURTHER RIGHTS OR OBLIGATIONS HEREUNDER, EXCEPT FOR THE.RIGHT OF SELLER TO COLLECT SUCH LIQUIDATED DAMAGES FROM BUYER OR (IF APPLICABLE) FROM ESCROW HOLDER AND, IF LEGAL ACTION IS REQUIRED TO COLLECT SUCH LIQUIDATED DAMAGES, TO RECOVER ITS ATTORNEYS' FEES AND COSTS PURSUANT TO PARAGRAPH 14. NOTWITHSTANDING THE FOREGOING, AND NOTWITHSTANDING THE TERMINATION OF THE AGREEMENT, SELLER WILL STILL BE ENTITLED TO INDEMNIFICATION AS PROVIDED IN PARAGRAPH 12 OF THIS AGREEMENT Buyer's Initials' y Seller's Initials 19. Miscellaneous. 19.1 Binding Effect. This Agreement shall be binding on the Parties. 19.2 Applicable Law. This Agreement shall be governed by the laws of the state of California. 19.3 Time of Essence. Time is of the essence of this Agreement 19.4 Counterparts. This Agreement may be executed by Buyer and Seiler in counterparts, each of which shag be deemed an original, and all of which together shall constitute one and the same instrument. Escrow Holder, after verifying that the counterparts are identical except for the signatures, is authorized and instructed to combine the signed signature pages on one of the counterparts, which shall then constitute the Agreement 19.5 Waiver of Jury Trial. THE PARTIES HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING INVOLVING THE PROPERTY OR ARISING OUT OF THIS AGREEMENT. 19.6 Conflict. Any conflict between the printed provisions of this Agreement and the typewritten or handwritten provisions shall be controlled by the typewritten or handwritten provisions. 19.7 1031 Exchange. Both Seller and Buyer agree to cooperate with each other in the event that either or both wish to participate in a 1031 exchange. Any party initiating an exchange shall bear all costs of such exchange. 20. Construction of Agreement In construing this Agreement, all headings and titles are for the convenience of the parties only and shall not be considered a part of this Agreement. Whenever required by the context, the singular shall include the plural and vice versa. Unless otherwise specifically indicated to the contrary, the word 'days" as used in this Agreement shall mean and refer to calendar days. This Agreement shall not be construed as if prepared by one of the parties, but rather according to its fair meaning as a whole, as if both parties had prepared it. 21. Additional Provisions: Additional provisions of this offer, if any, are as follows or are attached hereto by an addendum (the "Addenduml consisting of paragraphs through 21 A through 21.10. 22. Buyer's Representations and Warranties The following constitute representations and warranties of Buyer to Seiler as of the Date of Agreement and as of the Closing: (a) Buyer has the legal power, right and authority to enter into this Agreement and the documents required hereby to be executed by Buyer, and to consummate the transactions contemplated hereby. (b) All requisite corporate action has been taken by Buyer in connection with the entering into this Agreement and the documents required hereby to be executed by Buyer, and the consummation of the transactions contemplated hereby. (c) The individuals executing this Agreement and the documents required hereby to be executed by Buyer on behalf of Buyer have the legal power, right and actual authority to bind Buyer to the terms and conditions hereof and thereof. (d) This Agreement and all documents required hereby to be executed by Buyer are and will be valid, legally binding obligations of and enforceable against Buyer in accordance with their terms, subject only to applicable bankruptcy, insolvency, reorganization, moratorium laws or similar laws or equitable principles affecting or limiting the rights of contracting parties_ generally. (e) No representation, warranty or statement of Buyer in this Agreement or in any document fumished or to be fumished to Seller pursuant hereto contains or will contain any untrue statement of a material fact, or omits or will omit to state a material fact necessary to make the statements or facts contained therein not misleading. Except to the extent set forth in writing from Buyer. Buyer's representations and warranties made in this Paragraph will be continuing and will be true and correct as of the Closing with the same force and effect as if remade by Buyer at that time. Initials PAGE 6 Initials 23. Acceptance. 23.1 Seller accepts the foregoing offer to purchase the Property and hereby agrees to sell the Property to Buyer on the terms and conditions therein specified. 23.2 Seller acknowledges receipt of a copy hereof and has delivered a signed copy to Buyer. NOTE: A PROPERTY INFORMATION SHEET IS REQUIRED TO BE DELIVERED TO BUYER BY SELLER UNDER THIS AGREEMENT. The undersigned Buyer offers and agrees to buy the Property on the terms and conditions stated and acknowledges receipt of a copy hereof. BUYER: City of Vernon By ATTEST: . t, Leonis C. Malburg W4qQkVM1HWV= Mayor Dated: Bruce V. Malkenhorst, City Clerk Address: 4305 Santa Fe Avenue Vemon, CA 90058 Telephone: 323-583-8811 Fax 323-826-1438 Approved As to Form B. Eric T. Fresch, City Attorney Dated: Address: 4305 Santa Fe Avenue Vernon, CA 90058 Telephone: 323-583-8811 Fax: 323-826-1438 Federal ID No.: 95-6000808 SELLER: Seller. Saint-Gobain Containers, Inc. .-. Address: 1509 Macedonia Avenue Muncie, IN 47307-4200 Attn: David W. Knight, Esq. Telephone: (765) 741-7635 Fax (765) 747-6542 Federal ID No. 35' JS"�pjDs' Initials PAGE 7 initials EXHIBIT VI& AIR COMMERCIAL REAL ESTATE ASSOCIATION PROPERTY INFORMATION SHEET (Non -Residential) PREFACE: Purpose: This Statement is NOT a warranty as to the actual condition of the Property/Premises. The purpose is, instead, to provide the Woken; and the potential buyerAessee with important information about the Property/Premises which Is currently in the actual knowledge of the Owner and which the Owner is required by law to disuse. Ar,tual KnGwledge: rQF purposes of this Statemem !be ph Of a fast, OF the and GIFGum6tansen so as to Gauss ene la believe 11hat a ce Con probably exists. TO WHOM IT MAY CONCERN: SAINT—GORAIN CONTAINERS, INC. ("owner'), owns the Property/Premises commonly known by the street address of 4 855 East 52nd Place located in the City of Vernon County of, Los Angeles State of California and generally described as (describe briefly the nature of the premises or property) approximately 10. 6 acres of industrial land and improvements, APN: 6314-022-008; 6314-019-009;-6314-020-011; 6314-020-003 (herein after "Property"), and certifies that: 1.2G!ual knowledge of any maleFiall physical deleds on the Preps tic end GIRIG111FIRS e e...a..mea X 01ionef has no oGtual knowledge that !he heaIlR9, Ventilating, aiF GORdillening, plumbing, leading deem, sloGtFiGal and lighting systems, life safety ;y6lems, secu* systems and maGhaniGal equipment existing on the PFopeFty as of the data 118FOA it any, are not in good QP8rQIIA9 eFdeF and Gendilien, MP (if their are exceptions write "NG1N€ ). B. ---RFRSF has no actual knowledge of any leases, fiA3AGiA9. agiffiamerits, liens oF othOF agF88FAGAtS affeGfing any equipment whibli is being nclo ad u0ith the Pmpedy, except (if there are As except a !!NONE!): 3. Soil Conditions. Owner has no actual knowledge that the Property has any slipping, sliding, settling, flooding, ponding or any other grading, Irainage or soil problems, except (if there are no exceptions write "NONE'): 4. Utilities. Owner represents and warrants that the Property Is served by the following utilities (check the appropriate boxes) ❑ public sewer system nd the cost of installation thereof has been fully paid ❑ private septic system, ❑ electricity, ❑ natural gas, ❑ domestic water, ❑ telephone, and ❑ other. 5. Natural Hazard Zone. Owner has no actual knowledge that the Property is located within a delineated flood, earthquake, or other natural hazard :one, except (if there are no exceptions write "NONE"): as set forth in the Seller's Mandatory Disclosure Statement (AIR Form SMD-1-8/OOE) 6. Compliance With Laws. Owner has no actual knowledge of any aspect or condition of the Property (excluding any structures thereon) rhich violates applicable laws, rules, regulations, codes, or covenants, conditions or restrictions, OF Of iMPFOWIRSAIR OF 111161aliGAS made to the property or of any unfulfilled order or directive of any applicable government agency hat any work of investigation; or remediation, is to be performed on the Property (excluding any etructurer, :hereon), except (if there are no exceptions write "NONE'): EXHIBIT "A" Page 1 of 3 )2000 -AIR Commercial Real Estate Association REVISED FORM PI-3-81OOE 7. Hazardous Substances. A. Owner has no actual knowledge of the Property ever having been used as a waste dump, of the past (during the period of Owner's ownership) or present existence of any above or below ground storage tanks on the Property, or of the current existence on the Property of asbestos, transformers containing PCBs, or arty Hazardous, toxic or infectious Substance whose nature and/or quantity of existence, use, manufacture or effect, render it subject to Federal, state or local regulation, investigation, remediation or removal as potentially injurious to public health or welfare, except (if there are no exceptions write "NONE*): as set forth in the Phase I environmental report dated 2004, and -in the Phase II environmental report dated , 2004, prepared by ORS. B. Owner represents and warrants that it is not currently, and never has been engaged in the business of hauling waste. h2X2FdQ-.-. substances on !he Property, except (if there are no exceptions write "NONE*): 8. FlF0 DaM299 QW8F We no aGWal knowledge ef any siniGluFs on the Property h-Ang suffered malarial fire damage, e)(Gepl (if !here are no earseptiens ante "NOAIG^, 9. Actions, Suits or Proceedings. Owner has no actual knowledge that any actions, suits or proceedings are pending or threatened before any court, arbitration tribunal, governmental department, commission, board, bureau, agency or instrumentality that would affect the Property or the right or ability of an owner or tenant to convey, occupy or utilize the Properly, except (if there are no exceptions write "NONE*): 10. Governmental Proceedings. Owner has no actual knowledge of any existing or contemplated condemnation, environmental, zoning, redevelopment agency plan or other land use regulation proceedings which could detrimentally affect the value, use and operation of the Property, except (d there are no exceptions write "NONE*): 11. Unrecorded Title Matters. Owner has no actual knowledge of any encumbrances, covenants, conditions, restrictions, easements, licenses, liens, charges or other matters'.which affect the title of the Property that are not recorded in the official records of the county recorder where the Property is located, except (if there are no exceptions write "NONE*): 12. Leases. Owner has no actual knowledge of any leases, subleases or other tenancy agreements affecting the Property, except (d there are no exceptions write "NONE*): 13. Options. Owner has no actual knowledge of any options to purchase, rights of first refusal, rights of first offer or other similar agreements affecting the Property, except (if there are no exceptions write "NONE"): 14. Glhaf� 01 will be pFesuFned that there are no additional hem, whish warrant discleGuFFF unless they are set forth haFein), Page 2 of 3 Y1000 - AIR Commercial Real Estate Association REVISED FORM PI-348/OOE The statements herein will be relied upon by Buye , Therefore, Owner RAd-.(O-F- the 0-monegs Property Manager -has reviewed and modified this printed statemed as necessary to accurately and completely state all the known material facts concerning the Property. To the extent such modifications are not made, this statement may be relied upon as printed. This statement, however, shall not relieve a buyer or lessee of responsibility for independent investigation of the Property. Owner agrees to promptly notify, in writing, all appropriate parties of any material changes which may occur in the statements contained herein from the date this statement is signed until title to the Property is transfer executed. Date: .20 "OWNER" (Fill In date of execution) SAINT—GOBAIN CONTAINERS, INC. By: Name Printed. Title: Buyedlessee hereby acknowledges receipt of a copy of this Propery Information Sheet on _ By: Name Printed: Title: NOTICE: These fors are often modified to meet changing requirements of law and Industry needs. Always write or call to make sure you are utilizing the most current for: AIR Commercial Real Estate Association, 700 South Flower Street, Suite 600, Los Angeles, CA 90017. Telephone -No.: (213) 687-8777 Fax No.: (213) 687-M16. Page 3 of 3 02000 - AIR Commercial Real Estate Association REVISED FORM PI-3.8/o0E EXHIBIT SELLER'S MANDATORY DISCLOSURE STATEMENT (Required by law on transactions involving non-residential properties in California) DO NOT USE THIS FORM WITH REGARD TO THE SALE OF RESIDENTIAL PROPERTIES AIR Commercial Real Estate Association This disclosure statement is Intended to be a part of the AIR ® STANDARD OFFER, AGREEMENT AND ESCROW INSTRUCTIONS FOR PURCHASE OF REAL ESTATE (See paragraph 9.1(a) of said document) or ❑ (the "Purchase Agreement") dated October 2004 , regarding that certain real property commonly known as: 4855 East 52nd Place, Vernon, California (the "Property's wherein SAINT—GOBAIN CONTAINERS, INC. is the Seller and THE CITY OF VERNON is the Buyer. Note: This disclosure statement is p_o_t designed nor Intended to be used in place of the AIR standard Property Information Sheet. Both documents should be used in every transaction involving a sale. In order to comply with State law concerning disclosures to a potential purchaser, Seller elects to. ❑ A. Utilize a report prepared by a professional consultant which has been approved by the AIR, is. JCP Geologists (800) 748-5233. A copy of their reportis attached hereto. (Complete paragraphs 8 and 9 and sign this Statement in the place provided.) ❑ B. Utilize a report prepared by a different consultant, Is. (_) . A copy of their report Is attached hereto. (Complete paragraphs 8 and 9, sign this Statement in the place provided, and attach a copy of The Commercial Property Owners Guide to Earthquake Safety) ❑ C. Complete this Disclosure Statement without the assistance of a professional consultant. (Complete paragraphs 1 through 11 and sign this Statement in the place provided. Remember to attach a copy of The Commercial Property owner's Guide to Earthquake Safety.) 1. EARTHQUAKE FAULT ZONES. B the Property is located within a delineated Earthquake Fault Zone (a zone that encompasses a potentially or recently active trace of an earthquake fault that is deemed by the State Geologist to constitute a potential hazard to structures from surface faulting or fault creep), Cal forma Public Resources Code §2621 et seq. mandates that prospective purchasers be advised that the Property Is located within such a Zone, and that its development may require a geologic report from a state registered geologist. in accordance with such law, Buyer is hereby Informed that the Property is ❑ or is not ❑ within a delineated Earthquake Fault Zone. 2. SEISMIC HAZARD ZONES. If the Property is located within a Seismic Hazard Zone as delineated on a map prepared by the California Division of Mines and Geology, California Public Resources Code §2690 et seq. mandates that prospective purchasers be advised that the Property is located within such a Zone. In accordance with such law, Buyer Is hereby informed that the Property is ❑ or is not ❑ within a Seismic Hazard Zone. 3. EARTHQUAKE SAFETY. If (1) the Improvements on the Property were constructed prior to 1975, and (2) said knprovements include structures with (i) pre -cast (e.g., tift-up) concrete or reinforced masonry wails together with wood frame floors or roofs or (ig unreinforced masonry walls, Buyer must be provided with a copy of The Commercial Property Owners Guide to Earthquake Safety (the "Booklet") published by the California Seismic Safety Commission. Buyer is hereby Informed that the Property: ❑ (a) meets the foregoing requirements, and a copy of the Booklet and a completed "Commercial Property Earthquake Weakness Disclosure Report" is attached hereto. Within five business days of Buyers receipt of said Disclosure Report, Buyer shad deriver a duly countersigned copy of the same to Escrow Holder, with a copy to Seller and Sellers Broker. Escrow Holier is hereby instructed that the Escrow shall not dose unless and until Escrow Holder has received the Disclosure Report duly signed by both Seller and Buyer. ❑ (b) does not meet the foregoing requirements requiring the delivery of the Booklet 4. FIRE PROTECTION. If the, Property is located within a designated State Responsibility Area as delineated on a map prepared by the California Department of Forestry, California Public Resources Code §4136 mandates that prospective purchasers be advised that the Property is located within a wildfire area which may contain substantial forest fire risks and hazards, that the State may not be responsible to provide fire protection services, and that the Property may be subject to the requirements of Public Resources Code §4291 which requires the periodic removal of brush, the maintenance of firebreaks, and other similar activities. In accordance with such law, Buyer Is hereby informed that the Property is ❑ or is not ❑ within a designated State Responsibility Area. 5. FIRE HAZARD. If the Property is located within an area designated as a Very High Fire Hazard Severity Zone pursuant to Government Code §51178 et seq, §51183.5 mandates that prospective purchasers be advised "'the Property its located within such a zone and that the Property may be subject to various maintenance, design and/or construction requirements and/or restrictions. In accordance with such law, Buyer is hereby informed that the Property is ❑ or is not ❑ within a designated Very High Fire Hazard Severity Zone. . 6. AREA OF POTENTIAL FLOODING. If the Property Is located within an area of potential flooding in the event of the failuree of a dam as shown on an inundation map designated pursuant to Government Code §8589.6, §8589.4 mandates that prospective purchasers be advised that the Property is located within such an area. In accordance with such law, Buyer is hereby informed that the Property is ❑ or Is not ❑ within a designated area of potential flooding. 7. FLOOD HAZARD AREAS. If the Property is located within a designated Federal Flood Hazard Area as delineated on a map prepared by the Federal Emergency Management Agency, Federal law, Is. 42 U.S.C. §4104a, mandates that prospective purchasers be advised that the Property is located within an area having special good hazards and that flood insurance may be required as a condition to obtaining financing. In accordance with such law, Buyer Is hereby informed that the Property is ❑ or is not ❑ within a designated Federal Flood Hazard Area. EXHIBIT uqu Initials Page 1 of 2 Initials 1998 -AIR Commercial Real Estate Association REVISED FORM SMO-1-11/00E 8. FLOOD DISASTER INSURANCE. If the Seller or Seder's predecess"4n-interest has previously received Federal flood disaster assistance and said assistance was conditioned upon obtaining and maintaining food insurance on the Property, Federal law, ie. 42 U.S.C. §5154a, mandates that prospective purchasers be advised that they will be required to maintain such insurance on the Property and that if said insurance is not maintained and the Property is thereafter damaged by a flood disaster, the purchaser may be required to reimburse the Federal Government for the disaster relief provided. Buyer is hereby informed that to the best of the Seller's knowledge Federal flood disaster assistance has ❑ or has not O been previously received with regard to the Property. Note: if such disaster assistance has been received, the law specifies that the required notice be 'contained in documents evidencing the transfer of ownership". El-GF4awo4m*B4eew4nstalled: 10. TITLE INSURANCE. In the event that the Purchase Agreement does not at present provide that title insurance will be obtained. Buyer is strongly urged to consider purchasing such insurance, and, in accordance with California Civil Code §1057.6. is advised as follows: IMPORTANT: IN A PURCHASE OR EXCHANGE OF REAL PROPERTY, IT MAY BE ADVISABLE TO OBTAIN TITLE INSURANCE IN CONNECTION WITH THE CLOSE OF ESCROW SINCE THERE MAY BE PRIOR RECORDED LIENS AND ENCUMBRANCES WHICH AFFECT YOUR INTEREST IN THE PROPERTY BEING ACQUIRED. A NEW POLICY OF TITLE INSURANCE SHOULD BE OBTAINED IN ORDER TO ENSURE YOUR INTEREST IN THE PROPERTY THAT YOU ARE ACQUIRING. 11. OTHER. PLEASE NOTE: While the information contained In or attached to this Disclosure Statement is believed to be accurate as of the date that il was prepared, the applicable Lim and the areas covered by the various natural hazard zones, eta can change from time to time. Prior to the close of escrow, Buyer may wish to again check the status of the Property. Also, the city andfor county in which the Properly is located may have established natural hazard zones in addition to those fisted above. Buyer is advised to check with the appropriate local agency or agencies. The descriptions contained within the above disclosure paragraphs are not Intended to be full and complete dissertations of all of the possible ramifications to the Buyer andfor the Property. In the event that this document indicates that the Property is affected by one or more of the disclosures, Buyer is advised to: 1. Review the applicable laws In their entirety. 2. Seek advice of counsel as to the legal consequences of the items disclosed. 3. Retain appropriate consultants to review and investigate the impact of said disclosures. Likewise no representation or recommendation Is made by the AIR Commercial Rent Estate Association or by arty broker as to the legal sufficiency, legal effect, or consequences of this document or the Purchase Agreement to which it relates. Date. , 2004 SAINT—GOBAIN CONTAINERS INC. Seller Receipt of the above Seder's Mandatory Disclosure Statement is hereby acknowledged: Date: , 2004 Buyer NOTE: These forms are often modified to meet changing requirements of law and needs of the industry. Always write or call to make sure You are utilizing the most current form: AIR COMMERCIAL REAL ESTATE ASSOCIATION, 700 S. Flower Street, Suite 600, Los Angeles, Calif. 90017 Initials Page 2 of 2 Initials H998 -AIR Commercial Real Estate Association REVISED FORM SMD-148100E Addendum to Standard Offer, Agreement And Escrow Instructions for Purchase of Real Estate Buyer: City of Vernon Seller: Saint-Gobain Containers, Inc. Premises: 4855 E. 52°d Place, Vernon, California Dated: November 3, 2004 In the event of a conflict between the terms of the Standard Offer, Agreement and Escrow Instructions (the "Pre -Printed Form") and this Addendum (the "Addendum"), the terms of the Addendum shall control. Any initially -capitalized term used in this Addendum that is not defined herein shall have the meaning ascribed.to such term in the Pre -Printed Form. The term "Close of Escrow" (as used in this Addendum) shall have the same meaning as.the "Closing" (as used in the Pre -Printed Form). Collectively, the Pre -Printed Form and this Addendum are referred to as the "Agreement". 21.1 Buyer's Due Diligence; Certificate of Closure: Upon mutual execution of the Agreement, Buyer and its agents shall have immediate access to the Property to allow for necessary inspections and testing, subject to the provisions of Paragraph 12 of the Pre -Printed Form. Seller shall, at its cost, undertake all activities required to comply with the laws requiring a seller of property to obtain a Certificate of Closure from the City of Vernon. Seiler acknowledges that such activities may require the Seller to undertake some or all of the investigations and reports required for a Phase U Environmental Report, and Seller shall be solely responsible for the cost of such activities to the extent required to obtain the Certificate of Closure. Seller has retained the services of URS Corporation of Santa Ana ("URS") to conduct the testing and analysis and provide the reports required in order to obtain the Certificate of Closure, and Seller shall be solely responsible for the costs of such work (the "Closure Work'). Seller shall also retain the services of URS to conduct the additional testing and analysis and provide the reports required by the Buyer for its due diligence purposes, in accordance with the scope of work described in the memorandum attached hereto as Exhibit A and incorporated herein by this reference (the "Due Diligence Work"). Seller shall cause URS to perform the Due Diligence Work at URS Is typical cost for such services, and the cost of the Due Diligence Work shall be allocated to the Buyer at the Closing by the Escrow Officer. In that regard, Paragraph 9 of the Pre -Printed Form is hereby amended to add a new provision as follows: "Seller shall cause URS to invoice separately the Closure Work and the Due Diligence Work, and shall deliver both invoices to Escrow Holder at least five days prior to the Closing Date. Escrow Officer shall allocate the cost of the Closure Work to Seller (unless Seller provides evidence of payment of the Closure Work directly to URS), and shall allocate the cost of the Due Diligence Work to Buyer." To properly allocate the responsibility of each party for such work, Paragraph 12 of the Pre -Printed Form is hereby amended to add the following language at the end of the paragraph: "Notwithstanding anything to the contrary in the Agreement, Seller shall indemnify, defend, protect, and hold harmless Buyer and the Property of and from any and all claims, causes of action, liabilities, obligations, losses, expenses (including reasonable.attorneys' fees and costs), and damages, including those for injury to person or property, arising out of or relating to the Closure Work and Buyer shall indemnify defend, protect, and hold harmless Seller and the Property of and from any and all claims, causes of action,liabilities, obligations, losses, expenses (including reasonable attorneys' fees and costs), and damages, including those for injury to person or property, arising out of or relating to the Due Diligence Work." Seller shall cause URS to deliver its report required in connection with the Closure Work (the "Closure Report") and the report required in connection with the Due Diligence Work (the "Due Diligence Report") by 5:00 PM (Pacific Time) on December 1, 2004. Promptly after Buyer's receipt of such reports, Buyer shall notify Seller if any further environmental studies or tests or any further information 01910M14 110122.2 1 `WPWMftdft�101U_2A C (including, without limitation, supplements to the documents provided by Seller or new studies) are required in order to obtain the required Certificate of Closure from the City of Vernon or to complete Buyer's due diligence. To the extent that such additional studies (the "Additional Studies") are required in order to obtain the Certificate of Closure, Seller shall be responsible for obtaining and paying for such studies. 21.2 Seller's Reports: Within 10 calendar days after mutual execution of this Agreement, Seller shall deliver to Buyer all analyses, tests, reports, or studies that Seller currently has in its possession relating to the condition of the Property, including all soils and geological reports, appraisals, and environmental reports. Buyer hereby acknowledges receipt of Seller's prior Phase I Environmental Report and the current Phase I Environmental Report prepared by URS. Until the Closing, or if the transaction does not close, such materials shall be held in confidence and shall not be disclosed to any third parties (other than those of Buyer's employees and consultants who have a "need to know" in order to evaluate the purchase contemplated hereby) except as required by law. 21.3 Purchase Price: The Purchase Price constitutes all consideration due to Seller for the Property, and Seller hereby waives and relinquishes any relocation assistance Seller may be entitled to under local, state, or federal law. 21.4 Contingency Period: The time period (the "Contingency Period") for the satisfaction or waiver of all of Buyer's contingencies described in Paragraph 7 of the Pre -Printed Form, shall be 5:00 PM (Pacific Time) on December 15, 2004; provided, however, that notwithstanding such time period, (a) if Seller does not deliver to Buyer the Closure Report and the Due Diligence Report, each in form and substance reasonably acceptable to the City Health Department, by December 1, 2004, or if Buyer requires any Additional Studies the Contingency Period shall be extended by the number of business days between December 1, 2004 and the date on which Buyer receives the Due Diligence Report and the Closure Report (and, if required, any Additional Studies), each in form and substance reasonably acceptable to the City Health Department; and (b) Buyer's period for approving any documents to be provided by Seller, Escrow Holder, the Title Company, or any other agent of Seller (other than URS) shall be not less than 14 days following Buyer's actual receipt of any of such items. 21.5 Contingencies: Buyer shall have until the end of the Contingency Period to determine, in its sole and absolute discretion, whether it is satisfied with all aspects of the Property and the transaction, including, without limitation, those contingencies set forth in Paragraph 7 of the Pre -Printed Form and all other matters related to the Property, including economic analyses, issues related to Hazardous Substances, condition of the Property, its fitness for a particular use, marketability, prospects for future development, use, or occupancy, and any other matter related to Buyer's use of the Property. Notwithstanding anything to the contrary in Paragraph 7.3 of the Pre - Printed Form, Buyer and Seller acknowledge that Buyer may, in its sole and absolute discretion, determine, during the Contingency Period, that there are issues related to the condition of the Property, such as marketability or prospects for future development or existence of Hazardous Substances on the Property, that are not subject to cure'by Seller, and that Buyer may terminate this Agreement, and obtain a full refund of its Deposit, if Buyer does not approve Buyer's Contingencies within the Contingency Period for a reason that is not subject to cure. Buyer, in its sole and absolute discretion, may terminate the Agreement within the Contingency Period and receive a full refund of its Deposit. 21.6 Condition of Property: • Seller shall deliver the Property to Buyer at the Close of Escrow cleared of all fixtures, furniture, equipment, and personal property, including, without limitation, the furnace and all glass manufacturing equipment, ovens, conveyors, and other trade fixtures and equipment; provided, however, that Seller will not remove the process piping currently installed in the building on 01910/0014 110122.2 2 ��wia zaa the Property, and provided further that Seller may, at its option, either remove the structural steel or leave it in place at the Close of Escrow. Notwithstanding anything to the contrary in this Agreement, Seller shall not remove any structural steel or any other portion of the building that could affect the structural integrity of the building, weaken the support of the foundation, walls, floors, or roof, or cause the building to be unsafe. Prior to the Closing, Seller shall fill with clean sand or dirt all holes, borings, sumps, and other areas on the Property that could pose a hazard to a person walking on the Property. In addition, stairwells, holes, or openings in the building that could pose a hazard to a person walking through the building shall be covered, secured, filled, or otherwise protected to ensure the safety of anyone entering the building. Seller shall indemnify, defend, protect, and hold harmless Buyer, its elected officials, staff, employees, agents, and representatives, and the Property of and from any and all claims, causes of action, liabilities, obligations, losses, expenses (including reasonable attorneys' fees and costs), and damages, including those for injury to person or property, arising out of or relating to Seller's failure to comply with the terms of this section of Paragraph 21.6. There is currently an oxygen plant located on the Property, and all of the fixtures, furniture, equipment, and personal property related to the oxygen plant (collectively, the "Oxygen Plant Equipment') are to be removed by Seller, at its sole cost, prior to the Close of Escrow. Notwithstanding anything to the contrary in this Paragraph, if Seller is not able to remove all of the Oxygen Plant Equipment prior to the Close of Escrow, the parties. will proceed to the Close of Escrow, with a $1,000,000 holdback (the "Equipment Holdback Funds') from the Purchase Price being retained in Escrow. Seller shall, within 60 days following the Close of Escrow, remove all of the Oxygen Plant Equipment. Seller and its agents and contractors shall have unrestricted right to enter upon the Property in order to effectuate such removal, and shall indemnify, defend, protect, and hold harmless Buyer, its elected officials, staff, employees, agents, and representatives, and the Property of and from any and all claims, causes of action, liabilities, obligations, losses, expenses (including reasonable attorneys' fees and costs), and damages, including those for injury to person or property, arising out of or relating to the entry of Seller and its agents and contractors onto the Property. Seller's obligation to fill any holes, borings, or other areas on the Property with clean sand or dirt and to cover, secure, fill, or otherwise protect against hazards resulting from holes or openings in the building; and Seller's indemnity regarding its failure comply with such obligations, as set forth in Paragraph 21.6 above, shall apply to any holes, borings, sumps, or openings that result from the removal of the Oxygen Plant Equipment. Within thirty (30) days after Buyer's receipt of written notice that Seller has removed the Oxygen Plant Equipment, Buyer shall approve the removal and the condition of the Property following the removal, and if, in Buyer's reasonable judgment, the Property following removal does not contain Hazardous Substances which were not reasonably discoverable until the removal of the Oxygen Plant Equipment, Buyer and Seller shall send mutual instructions to the Escrow Officer to release to Seller the Equipment Holdback Funds. If Hazardous Substances are found to exist on the Property following the removal of the Oxygen Plant Equipment (which were not reasonably discoverable until the removal of the Oxygen Plant Equipment), the Equipment Holdback Funds will be equitably allocated between Buyer and Seller to reimburse Buyer for remediation costs. If Seller has not removed the Oxygen Plant Equipment within 60 days after the Close of Escrow, Seller shall commence, upon the 61" day after the Close of Escrow, to pay rent for the Property in the amount of $15,000 for the period from the 61 n day after the Close of Escrow until the 91 n day after the Close of Escrow, and the amount of $150,000 for each 30 day period thereafter (in each case, prorated for partial 30 day periods) through the day on which Seller delivers to Buyer written notice that the Oxygen Plant Equipment has been removed. Buyer and Seller will promptly notify the Escrow Holder in writing when the Oxygen Plant Equipment has been satisfactorily removed from the Property and Buyer has 0191010014 110122.2 3 10123_'mo approved the condition of the Property as described above. If Buyer and Seller have not notified Escrow Holder in writing that the Oxygen Plant Equipment has been satisfactorily removed from the Property by the 61 IS, day after the Close of Escrow, Escrow Holder is hereby directed to pay to Buyer, on the 61" day following the Close of Escrow, the first 30 day period's rent in the amount of $15,000 from the Equipment Holdback Funds, and to make a rental payment in the amount of $150,000 to Buyer on the 91' day following the Close of Escrow, and at the end of each 30 day period thereafter, unless, prior to such payment date, Escrow Holder receives written notice signed by Buyer and Seller that the Oxygen Plant Equipment has been removed. If the Oxygen Plant Equipment is removed during a period for which the rent has been paid, Buyer shall promptly (and in any event within thirty (30) days).ref ind a prorated portion of the rent paid. If the Oxygen Plant Equipment has not been removed by the 121s1 day after the Close of Escrow, then upon not less than 5 days' notice to Seller (which may be given prior to the end of the 121 day period), Buyer shall have the right, but not the obligation, to remove the Oxygen Plant Equipment, and the actual, out of pocket cost of such. removal will be paid to Buyer out of the Equipment Holdback Funds. In addition to paying the rent out of the Equipment Holdback Funds, the Escrow Holder shall immediately reimburse the Buyer, in accordance with receipts delivered by Buyer to Escrow Holder (with copies to Seller) the full reasonable amount of the cost of any security required to protect the Oxygen Plant Equipment after the Closing, the actual, out of pocket cost of the removal of the Oxygen Plant Equipment, and the actual, out of pocket cost of storage of the Oxygen Plant Equipment following removal by the Buyer, and the actual out of pocket cost of any remediation required as a result of the removal of the Oxygen Plant Equipment (which remediation shall only apply to Hazardous Materials which were not reasonably discoverable until the removal of the Oxygen Plant Equipment). Any remaining amounts left in the Equipment Holdback Funds shall be distributed to Seller after the Oxygen Plant Equipment has been removed, and Buyer has approved the condition of the Property following such removal (or after all payments have been made to Buyer as provided above). The Equipment Holdback Funds are intended as a reasonable estimate of the possible costs that could be incurred by the Buyer in storing and removing the Oxygen Plant Equipment, and do not in any way limit the Seller's obligation for such costs.. If the Buyer's costs for the items described in; this Paragraph 21.6 exceed the Equipment Holdback Funds, Seller shall promptly after receipt of invoice and evidence of costs reimburse all costs incurred by Buyer in excess of the amount of the Equipment Holdback Funds. Following the notice period described above, Buyer shall also have the right to store the Oxygen Plant Equipment in the name of and for the account of Seller. 21.7 Termination of Escrow: Notwithstanding anything to the contrary in Paragraph 6.7 of the Pre -Printed Form, upon any termination of this Agreement and. the Escrow for any reason other than Buyer's default hereunder, Escrow Holder shall refund to Buyer the entire Deposit. 21.8 Role of City Health Department: It is understood that nothing in this Agreement affects or limits the City Health Department's responsibilities in the administration of local, state and federal law with respect to remediation of the Property, if such remediation is necessary. Seller. agrees that neither Buyer's relationship to the City Health Department nor anything required of Seller by the City Health Department in carrying out its responsibilities under the law, shall excuse Seller's obligations under this Agreement. It is further understood that Buyer's approval of any contingency relative to the condition of the Property only includes approval by the Buyer (City of Vernon), and does not necessarily constitute approval by the City Health Department. 21.9 Closing. If the Due Diligence Report and the Closure Report, each in form and substance reasonably acceptable to the City Health Department, are delivered to the Buyer by 5:00 PM (Pacific Time) on December 1, 2004, and the Buyer approves the purchase of the Property on or before 5:00 PM (Pacific Time) on the last day of the 01910/0014110122.2 4 =1�olII xme Contingency Period (provided, however, that if the Contingency Period was extended in accordance with Paragraph 21.4 above, the Closing Date shall be extended by the same number of days), the purchase and sale of the Property shall close on December 22, 2004, or such later date as the parties shall mutually agree to in writing, but not later than the Outside Closing Date. If the extension of the Closing Date as described above extends the Closing Date beyond the Outside Closing Date, Seller may, at it option, by notice to Buyer and to Escrow Holder, terminate this Agreement. In the event of termination for such reason, neither party shall be in default hereunder, the Deposit shall be immediately returned to the Buyer, and neither party shall have any further obligation or liability to the other. If Buyer has disapproved the condition of the Property during the Contingency Period for a reason related -to the existence of Hazardous Substances, and Seller has provided to Buyer a Due Diligence Report and Closure Report, each in form and substance reasonably acceptable to the City Health Department, by December 1, 2004, such that the City Health Department is able, in its sole and absolute judgment, to determine that the nature, scope, source, and type of contamination, and potential cost of any remediation that may be required to obtain the Certificate of Closure or for Buyer to approve the purchase of the Property, are considered by the City Health Department, in its sole and absolute discretion, to be minor and of an acceptable level of risk for the Buyer, then Buyer agrees that it will waive its disapproval of the contingency related to Hazardous Substances and will close Escrow_prior to the Outside Closing Date, on the following conditions: (a) There will be held back in Escrow an amount reasonably determined by the City Health Department to berequired to pay for any remediation that the City Health Department has determined to be necessary in connection with the Buyer's purchase of the Property, but only to the extent required to obtain the Certificate of Closure (the "Remediation Holdback Funds"). (b) Seller shall agree, in writing at the Close of Escrow (the "Remediation Agreement'), to proceed diligently with any such remediation required to obtain the Certificate of Closure (the "Remediation). The Remediation Agreement shall be in form and substance satisfactory to Buyer and Seller, and, among other things, shall state that (i) Seller shall ensure that all Remediation is conducted in a safe, prudent manner, in accordance with industry standards and in accordance with all applicable laws, including, without limitation, laws regulating the handling, transfer, storage, and disposal of all Hazardous Substances; (ii) that Seller shall retain a contractor acceptable to Buyer to perform the Remediation; (iii) that Buyer shall have the right to approve the contract and scope of work for the Remediation, and the timing for the completion of the Remediation; and (iv) that Seller shall indemnify, defend, and hold harmless Buyer, its employees, elected officials, staff, agents, and representatives, from and against all claims, causes of action, obligations, liabilities, costs, and expenses (including, without limitation, reasonable attorneys' fees and costs) arising out of or related to the continuing existence of the Hazardous Substance on the Property from the Closing through the completion of the Remediation (including, without limitation, claim related to injury, illness or death or damage to Property); the entry onto the Property for the Remediation, and any costs arising out of the Remediation (including, without limitation, costs of removal, transfer, storage, or disposal of the Hazardous Substance). (c) Upon Escrow Holder's receipt of the Certificate of Closure, the Remediation Holdback Funds shall be immediately released to Seller. (d) If Seller fails to diligently pursue the Remediation, after not less than 5 days' prior written notice from the City Health Department (during which time period Seller can cure the failure by taking all necessary actions to diligently pursue the Remediation), then Buyer shall have the right, but not the obligation, to undertake the required Remediation, and the cost of such Remediation shall be paid to Buyer out of the Remediation Holdback Funds, 01910/0014 110122.2 5 10122'2 . with any remaining amounts left in the Remediation Holdback Funds being distributed to Seller promptly after completion of the Remediation. (e) Seller will be responsible for any costs of completing the Remediation which exceed the Remediation Holdback Funds. 21.10 Holdback Funds: With respect to the provisions of this Addendum regarding the holding and disbursement by Escrow Holder of the Equipment Holdback Funds -and the Remediation Holdback Funds (collectively, the "Holdback Funds') the following provisions shall apply, notwithstanding any other provisions herein to the contrary. The parties acknowledge that, for purposes of this Paragraph, business days shall mean only Monday through Thursday, and shall exclude December 23, 2004 through January 5, 2005. (1) All Holdback Funds shall be held in an interest -bearing demand deposit account, with interest accruing to the benefit of Seller. Seller shall provide Escrow Holder with a form W-9. (2) Upon receipt of a written demand from either Seller or Buyer for disbursement of Holdback Funds, Escrow Holder shall immediately deliver a copy of such demand (along with any supporting documentation provided with such demand) to the other party. Unless Escrow Holder receives a written objection from the other party within fifteen (15) business days after such copies have been sent, then Escrow Holder shall make the disbursement as requested. All notices to be given by and to Escrow Holder shall be by personal delivery or by Federal Express or other reputable overnight delivery service. (3) If Escrow Holder receives written objection to any requested disbursement of Holdback Funds within such fifteen (15) business day period, then. it shall not make any disbursement until either receipt of joint written instructions from Seller and Buyer, or receipt of a court order or an award by an arbitrator. If Escrow Holder does not receive written objection to any requested disbursement of Holdback Funds within such fifteen (15) business day period, it shall make the requested disbursement. (4) All costs of the escrow shall be borne by Seller, including the cost of all notices given by Escrow Holder. Escrow Holder may deduct such costs from the Holdback Funds. (5) If a dispute arises between Seller and Buyer with respect to any distribution of Holdback Funds, which dispute cannot be resolved within ten (10) days by mutual agreement, then either party may elect to have the dispute resolved by arbitration in Los Angeles County, Califomia, in accordance with the Commercial Arbitration Rules of the American Arbitration Association. Judgment upon the award rendered by the arbitrator may be entered in any court of competent jurisdiction. The cost of the arbitration shall be paid by the losing party, or if there is no clear losing party, as the arbitrator shall determine. In any such arbitration proceedings, the parties shall have the right to obtain discovery pursuant to CCP § 1283.05, but depositions may only be taken with the consent of the arbitrator. Service of any petition to confirm or vacate the arbitration award and notice of hearing thereon may be made by certified mail, return -receipt requested, or by personal delivery. The arbitrator's award may be limited to a statement as to whether any requested disbursement of Holdback Funds should be made, or to what extent it should be made, and an award of attorneys' fees, if applicable. The decision of the 01910/0014 1101221 6 �11Q1� Zdoc arbitrator shall be final and binding and unreviewable for error of law or legal reasoning of any kind. The parties will use best efforts to consummate any such arbitration within sixty (60) days after the date of demand for arbitration. Executed as of the date first above written Seiler: Saint-Gobain Containers, Inc. Name: Title: G�� 1 By. Name: Title: Buyer: - City Of Vernon By: ATTEST: Leonis C. Malburg, Mayor Bruce V. Malkenhorst, City Clerk APPROVED AS TO FORM Eric T. Fresch, City Attorney 01910/0014110122 7 7 EXHIBIT AV .... a .. �.. . ••• r rage. uJ vaCe. 1 I1OLW4 1:4U:3iO FM .....,�..... _ , -- r=� 11/02/2004 14:16 FAX 323 588 4320 EXHIBIT A Q 002 Environmental Health To: Lewis & Pozzebon, Director From: Dan Dming, chief Deputy Diredor'� DaW. November 2, 2004 Re. ' E.nvi-Wne ttal Sampling at Saint-Gobain, 4855 E 52"a PI., Vernon Based on reviews of pertinent documents, it is recommended that the subject sampling be done at the following locations- near Heliotrope Ave. between the railroad trades and Sabt-Gobain's decorates department (Budding B-2), adjacent to the Dunn Edwards property between the railroad badm and Saint-Gabain's air liquid operation; and been the railroad tracks and Saint-Gobain's warehouse (Building W 1). These locations are marked on the attached map. Soils at these locations should be sampled at 5,15, and 25 feet below grade, and at interim depths if obvious contamination is observed during drEng operations. Additionally, samples (aqueous and non-aquoouS, if any) from the saturated area should be taken at the top of the perched water zone (estimated at 26 to 30 feet below grade), which trkelmy underlies the Saint-Gobain property. Samples should be analyzed for chlorinated and non-chlorkrated salverrts, to include perchloroefh Ww, benzene, toluene, and xyiene. • ,.. . ...w . ,.r rays. pro mate: ! I/dJLW4 1:4U:3ti NM I OZCV 89S CZC rVA 9T=YT VOOZ/ZO/TT SUPPORTING DOCUMENTS AIR COMMERCIAL REAL ESTATE ASSOCIATION STANDARD OFFER, AGREEMENT AND ESCROW INSTRUCTIONS FOR PURCHASE OF REAL ESTATE (Non -Residential) November 3, 2004 (Date for Reference Purposes) 1. Buyer 1.1 The City of Vernon ("Buyer") hereby offers to purchase the real property, hereinafter described, from the owner thereof ("Seller") (collectively, the "Parties" or individually, a "Party"), through an escrow ("Escrow") to close on December 22, 2004 ("Expected Closing Date"), but not later than December 27, 2004 (the "Outside Closing Date") to be held by North American Title Company (Attn: Tina De Bow) ("Escrow Holder") whose address is 520 North Brand Blvd., Glendale, California 91203, Phone No. 818- 551-5370, Facsimile No. 818-240-9884 upon the terms and conditions set forth in this agreement ("Agreement"). Buyer shall have no right to assign Buyer's rights hereunder. 1.2 The term "Date of Agreement" as used herein shall be the date when by execution and delivery (as defined in paragraph 20.2) of this document or a subsequent counteroffer thereto, Buyer and Seller have reached agreement in writing whereby Seller agrees to sell, and Buyer agrees to purchase, the Property upon terms accepted by both Parties. 2. Property 2.1 The real property ("Property") that is the subject of this offer consists of approximately 10.6 acres of industrial land and the improvements located thereon located in the City of Vernon, County of Los Angeles, State of California, and is commonly known by the street address of 4855 E. 52"d Place, Vernon, California 90040, legally described as: to be described in escrow (APN: 6314-022-008, 6314-019-009, 6314-020-011, 6314-020-003). 2.2 If the legal description of the Property is not complete or is inaccurate, this Agreement shall not be invalid and the legal description shall be completed or corrected to meet the requirements of North American Title Company (Attn: Victor Greene) ("Title Company"), which shall issue the title policy hereinafter described. 2.3 The Property includes, at no additional cost to Buyer, the permanent improvements thereon, including those items which pursuant to applicable law are a part of the Property, as well as the following items, if any, owned by Seller and at present located on the Property: electrical distribution systems (power panel, buss ducting, conduits, disconnects, lighting fixtures); telephone distribution systems (lines, jacks and connections only); space heaters; heating, ventilating, air conditioning equipment ("HVAC"); air lines; fire sprinkler systems; security and fire detection systems; carpets; window coverings; wall coverings (collectively, the "Improvements") 2.4 The fire sprinkler monitor is owned by Seller and included in the Purchase Price. 2.5 Except as provided in Paragraph 2.3, the Purchase Price does not include Seller's personal property, furniture and furnishings (including, without limitation, the Glass Equipment and the Oxygen Plan Equipment (as such terms are defined in the Addendum Paragraph 21.6), and all other Seller's equipment which is used in connection with its glass packaging and other business operations), all of which shall be removed by Seller prior to Closing. See Addendum Paragraph 21.6. 3. Purchase Price 3.1 The purchase price ("Purchase Price") to be paid by Buyer to Seller for the Property shall be $ 11,000,000.00; payable as follows: Total Purchase Price: $11,000,000.00 $11.000.000.00 4. Deposits 4.1 Buyer shall deliver to Escrow Holder a check in the sum of $250,000 when both Parties have executed this Agreement and the executed Agreement has been delivered to Escrow Holder. When cashed, the check shall be deposited into the Escrow's trust account to be applied toward the Purchase Price of the Property at the Closing. 4.2 Escrow Holder shall deposit the funds deposited with it by Buyer pursuant to paragraphs 4.1 (the "Deposit"), in a State or Federally chartered bank in an interest -bearing account whose term is appropriate and consistent with the timing requirements of this transaction. The interest therefrom shall accrue to the benefit of Buyer, who hereby acknowledges that there may be penalties or interest forfeitures if the applicable instrument is redeemed prior to its specified maturity. Buyer's Federal Tax Identification Number is 95-60000808. NOTE: Such interest bearing account cannot be opened until Buyers Federal Tax Identification number is provided. 5. Real Estate Brokers: None. 5.1 Buyer and Seller each represent and warrant to the other that he/she/it has had no dealings with any person, firm, broker or finder in connection with the negotiation of this Agreement and/or the consummation of the purchase and sale contemplated herein, and no broker or other person, firm or entity, other than said Brokers is/are entitled to any commission or finder's fee in connection with this transaction as the result of any dealings or acts of such Party. Buyer and Seller do each hereby agree to indemnify, defend, protect and hold the other harmless from and against any costs, expenses or liability for compensation, commission or charges which may be claimed by any broker, finder or other similar party by reason of any dealings or act of the indemnifying Party. 6. Escrow and Closing 6.1 Upon acceptance hereof by Seller, this Agreement, including any counteroffers incorporated herein by the Parties, shall constitute not only the agreement of purchase and sale between Buyer and Seller, but also instructions to Escrow Holder for the consummation of the Agreement through the Escrow. Escrow Holder shall not prepare any further escrow instructions restating or amending the Agreement unless specifically so instructed by the Parties or a Broker herein. Subject to the reasonable approval of the Parties, Escrow Holder may, however, include its standard general escrow provisions. 6.2 As soon as practical after the receipt of this Agreement and any relevant counteroffers, Escrow Holder shall ascertain the Date of Agreement as defined in paragraphs 1.2 and 17.2 and advise the Parties and Brokers, in writing, of the date ascertained.. Escrow Holder is hereby authorized and instructed to conduct the Escrow in accordance with this Agreement, applicable law and custom and practice of the community in which Escrow Holder is located, including any reporting requirements of the Internal Revenue Initials PAGE 1 Initials Code. In the event of a conflict between the law of the state where the Property is located and the law of the state where the Escrow Holder is located, the law of the state where the Property is located shall prevail. 6.3 Subject to satisfaction of the contingencies herein described, Escrow Holder shall close this escrow (the "Closing") by recording a grant deed and the other documents required to be recorded, and by disbursing the funds and documents in accordance with this Agreement. 6.4 Buyer and Seller shall each pay one-half of the Escrow Holder's charges and Seller shall pay the usual recording fees and any required documentary transfer taxes. Seller shall pay the premium for a standard coverage owner's or joint protection policy of title insurance. Buyer shall pay for any charges for ALTA extended coverage, and for any title endorsements that Buyer may request. 6.5 Escrow Holder shall verify that all of Buyer's contingencies have been satisfied or waived prior to Closing. The matters contained in paragraphs 7.1 subparagraphs (b), (c), (d), (e), (g), (i), (k), and (1), 7.4, 7.5, 10, 11, 12, 14, 17 and 18 are, however, matters of agreement between the Parties only and are not instructions to Escrow Holder. 6.6 If this transaction is terminated for non -satisfaction and non -waiver of a Buyer's Contingency, as defined in paragraph,." 77 then neither of the Parties shall thereafter have any liability to the other under this Agreement, except to the extent of a breach of any affirmative covenant or warranty in this Agreement. In the event of such termination, Buyer shall be promptly refunded all funds deposited by Buyer with Escrow Holder, less only Title Company and Escrow Holder cancellation fees and costs, all of which shall be Buyer's obligation. 6.7 The Closing shall occur on the Expected Closing Date, or as soon thereafter as the Escrow is in condition for Closing; provided, however, that if the Closing does not occur by the Expected. Closing Date and said Date is not extended by mutual instructions of the Parties, a Party not then in default under this Agreement may notify the other Parry and Escrow Holder, in writing that, unless the Closing occurs within 5 business days following said notice, the Escrow shall be deemed terminated without further notice or instructions. 6.8 Except as otherwise provided herein, the termination of Escrow shall not relieve or release either Party from any obligation to pay Escrow Holder's fees and costs or constitute a waiver, release or discharge of any breach or default that has occurred in the performance of the obligations, agreements, covenants or warranties contained therein. 7. Contingencies to Closing 7.1 The Closing of this transaction is contingent upon the satisfaction or waiver of the following contingencies. IF BUYER FAILS TO NOTIFY ESCROW HOLDER, IN WRITING, OF THE APPROVAL OF ANY OF SAID CONTINGENCIES WITHIN THE TIME SPECIFIED THEREIN, IT SHALL BE CONCLUSIVELY PRESUMED THAT BUYER HAS DISAPPROVED SUCH ITEM, MATTER OR DOCUMENT. Buyer's conditional approval shall constitute disapproval, unless provision is made by the Seller within the time specified therefor by the Buyer in such conditional approval or by this Agreement, whichever is later, for the satisfaction of the condition imposed by the Buyer. Escrow Holder shall promptly provide all parties with copies of any written disapproval or conditional approval which it receives. With regard to the contingencies set forth in this Paragraph 7.1, the time periods set forth in Paragraph 21.4 of the Addendum shall control. Further details as to Buyer's Contingencies (including the time periods for approving such Contingencies) are set forth in Paragraphs 21.4 and 21.5 of the Addendum and shall control over any terms set forth in this pre-printed Agreement. (a) Disclosure. Seller shall make all disclosures required by law. Seller shall provide Buyer with a completed AIR Commercial Real Estate Association ("AIR") Property Information Sheet as modified, in substantially the form set forth in Exhibit "A" ("Property Information Sheet") and the AIR "Seller's Mandatory Disclosure Statement" as modified, in substantially the form set forth in Exhibit "B" concerning the Property, duly executed by or on behalf of Seller within 10 days following the Date of Agreement. Buyer shall approve or disapprove the matters disclosed. (b) Physical Inspection. Buyer shall satisfy itself with regard to the physical aspects and size of the Property. (c) Hazardous Substance Conditions Report. Buyer shall satisfy itself with regard to the environmental aspects of the Property. Seller recommends that Buyer obtain a Hazardous Substance Conditions Report concerning the Property and relevant adjoining properties. Any such report shall be paid for by Buyer. A."Hazardous Substance" for purposes of this Agreement is defined as any substance whose nature and/or quantity of existence, use, manufacture, disposal or effect, render it subject to Federal, state or local regulation, investigation, remediation or removal as potentially injurious to public health or welfare. A "Hazardous Substance Condition" for purposes of this Agreement is defined as the existence on, under or relevantly adjacent to the Property of a Hazardous Substance that would require remediation and/or removal under applicable Federal, state or local law. (d) Soil Inspection. Buyer shall satisfy itself with regard to the condition of the soils on the Property. Seller recommends that Buyer obtain a soil test report. Any such report shall be paid for by Buyer. Seller shall provide Buyer copies of any soils report that Seller may have within 10 days of the Date of Agreement. (e) Governmental Approvals. Buyer shall satisfy itself with regard to approvals and permits from governmental agencies or departments which have or may have jurisdiction over the Property and which Buyer deems necessary or desirable in connection with its intended use of the Property, including, but not limited to, permits and approvals required with respect to zoning, planning, building and safety, fire, police, handicapped and Americans with Disabilities Act requirements, transportation and environmental matters. (f) Conditions of Title. Escrow Holder shall cause a current preliminary title report ("Title Report") concerning the Property issued by the Title Company, as well as legible copies of all documents referred to in the Title Report ("Underlying Documents") to be delivered to Buyer within 5 days following the Date of Agreement. Buyer shall satisfy itself with regard to the condition of title. The disapproval of Buyer of any monetary encumbrance, which by the terms of this Agreement is not to remain against the Property after the Closing, shall not be considered a failure of this contingency, as Seller shall have the obligation, at Seller's expense, to satisfy and remove such disapproved monetary encumbrance at or before the Closing. (g) Survey. Buyer shall satisfy itself with regard to any ALTA title supplement based upon a survey prepared to American Land Title Association ("ALTA') standards for an owner's policy by a licensed surveyor, showing the legal description and boundary lines of the Property, any easements of record, and any improvements, poles, structures and things located within 10 feet of either side of the Property boundary lines. Any such survey shall be prepared at Buyer's direction and expense. If Buyer has obtained a surrey and approved the ALTA title supplement, Buyer may elect within the period allowed for Buyer's approval of a survey to have an ALTA extended coverage owner's form of title policy, in which event Buyer shall pay any additional premium attributable thereto. (h) Other Agreements. Seller shall within 10 days of the Date of Agreement provide Buyer with legible copies of all other agreements ("Other Agreements") known to Seller that will affect the Property after Closing. Buyer shall satisfy itself with regard to such agreements. (i) Personal Property. In the event that any personal property is included in the Purchase. Price, Buyer shall satisfy itself with regard to the title condition of the such personal property. Seller recommends that Buyer obtain a UGC-1 report. Any such report shall be paid for by Buyer. Seller shall provide Buyer copies of any liens or encumbrances affecting such personal property that it is aware of within 14 days of the Date of Agreement. 0) Destruction, Damage or Loss. There shall not have occurred prior to the Closing, a destruction of, or damage or loss to, the Property or any portion thereof (other than the structures thereon), from any cause whatsoever, which would cost more than $10,000.00 to repair or cure. If the cost of repair or cure is $10,000.00 or less, Seller shall repair or cure the loss prior to the Closing. Buyer shall have the option, within 10 days after receipt of written notice of a loss costing more than $10,000.00 to repair or cure, to either terminate this transaction or to purchase the Property notwithstanding such loss, but without deduction or offset against the Initials I PAGE 2 Initials Purchase Price. If the cost to repair or cure is more than $10,000.00, and Buyer does not elect to terminate this transaction, Buyer shall be entitled to any insurance proceeds applicable to such loss. Unless otherwise notified in writing, Escrow Holder shall assume no such destruction, damage or loss has occurred prior to Closing. (k) Material Change. Buyer shall have 10 days following receipt of written notice of a Material Change within which to satisfy itself with regard to such change. "Material Change" shall mean a change in the status of the use, occupancy, tenants, or condition of the Property (other than a change in the physical condition of any structures thereon) that occurs after the date of this offer and prior to the Closing. Unless otherwise notified in writing, Escrow Holder shall assume that no Material Change has occurred prior to the Closing. (1) Seller Performance. The delivery of all documents and the due performance by Seller of each and every undertaking and agreement to be performed by Seller under this Agreement. (m) Warranties. Each representation and warranty of Seller herein be true and correct as of the Closing. Escrow Holder shall assume that this condition has been satisfied unless notified to the contrary in writing by any Party prior to the Closing. (n) Closure Certificate. Seller shall have obtained a Certificate of Closure from the City of Vernon. Buyer agrees that it will not impose any conditions on the issuance of such Certificate of Closure other than it would impose in connection with other transactions in which the buyer was not acquiring the subject property. 7.2 All of the contingencies specified in sub -paragraphs (a) through (p) of paragraph 7.1 are for the benefit of, and may be waived by, Buyer, and may be elsewhere herein referred to as "Buyer's Contingencies." Buyer's Contingencies are further described in Paragraph 21 of the Addendum and shall be in addition to those set forth in subparagraphs (a) through (n) of paragraph 7.1 of the Pre -Printed Form. 7.3 If any Buyer's Contingency or any other matter subject to Buyer's approval is not approved (with silence constituting disapproval) as provided for herein in a timely manner ("Disapproved Item"), Seller shall have the right but not the obligation within 10 days following the receipt of notice of Buyer's disapproval or deemed disapproval to elect to cure such Disapproved Item prior to the Expected Closing Date ("Seller's Election"). Seller's failure to give to Buyer within such period, written notice of Seller's commitment to cure such Disapproved Item on or before the Expected Closing Date shall be conclusively presumed to be Sellers Election not to cure such Disapproved Item. If Seller elects, either by written notice or failure to give written notice, not to cure a Disapproved Item, Buyer shall have the election, within 10 days after Sellers Election to either accept title to the Property subject to such Disapproved Item, or to terminate this transaction. Buyer's failure to notify Seller in writing of Buyer's election to accept title to the Property subject to the Disapproved Item without deduction or offset shall constitute Buyer's election to terminate this transaction. Unless expressly provided otherwise herein, Seller's right to cure shall not apply to the remediation of Hazardous Substance Conditions. Unless the Parties mutually instruct otherwise, if the time periods for the satisfaction of contingencies or for Seller's and Buyer's said Elections would expire on a date after the Expected Closing Date, the Expected Closing Date shall be deemed extended for 3 business days following the expiration of: (a) the applicable contingency period(s), (b) the period within which the Seller may elect to cure the Disapproved Item, or (c) if Seller elects not to cure, the period within which Buyer may elect to proceed with this transaction, whichever is later. 7.4 Buyer understands and agrees that until such time as all Buyer's Contingencies have been satisfied or waived, Seller and/or its agents may solicit, entertain and/or accept back-up offers to purchase the Property. 7.5 The Parties acknowledge that extensive local, state and Federal legislation establish broad liability upon owners and/or users of real property for the investigation and remediation of Hazardous Substances. The determination of the existence of a Hazardous Substance Condition and the evaluation of the impact of such a condition are highly technical. The Parties acknowledge that they have been advised to consult their own technical and legal experts with respect to the possible presence of Hazardous Substances on the Property or adjoining properties. The Parties hereby assume all responsibility for the impact of such Hazardous Substances upon their respective interests herein. 8. Documents Required at or before Closing: 8.1 Prior to the Closing date Escrow Holder shall obtain an updated Title Report concerning the Property from the Title Company and provide copies thereof to each of the Parties. 8.2 Seller shall deliver to Escrow Holder in time for delivery to Buyer at the Closing: (a) Grant deed, duly executed and in recordable form, conveying fee title to the Property to Buyer. (b) Other Agreements together with duly executed assignments thereof by Seller and Buyer. (c) An affidavit executed by Seller to the effect. that Seller is not a "foreign person" within the meaning of Internal Revenue Code Section 1445 or successor statutes. If Seller does not provide such affidavit in form reasonably satisfactory to the Escrow Holder at least 3 business days prior to the Closing, Escrow Holder shall at the Closing deduct from Sellers proceeds and remit to Internal Revenue Service such sum as is required by applicable Federal law with respect to purchases from foreign sellers. (d) If the Property is located in California, an affidavit executed by Seller to the effect that Seller is not a "nonresident" within the meaning of California Revenue and Tax Code Section 18662 or successor statutes. If Seller does not provide such affidavit in form reasonably satisfactory to Escrow Holder at least 3 business days prior to the Closing, Escrow Holder shall at the Closing deduct from Seller's proceeds and remit to the Franchise Tax Board such sum as is required by such statute. (e) If applicable, a bill of sale, duly executed, conveying title to any included personal property to Buyer. (f) If the Seller is a corporation, a duly executed corporate resolution authorizing the execution of this Agreement and the sale of the Property. 8.3 Buyer shall deliver to Seller through escrow: (a) The cash portion of the Purchase Price and such additional sums as are required of Buyer under this Agreement shall be deposited by Buyer with Escrow Holder, by federal funds wire transfer, or any other method acceptable to Escrow Holder as immediately collectable funds, no later than 2:00 P.M. on the business day prior to the Expected Closing Date. Agreements. (b) Assumptions duly executed by Buyer of the obligations of Seller that accrue after Closing under any Other (c) If the Buyer is a corporation, a duly executed corporate resolution authorizing the execution of this Agreement and the purchase of the Property. 8.4 At Closing, Escrow Holder shall cause to be issued to Buyer a standard coverage (or ALTA extended, if elected pursuant to 7.1(g)) owner's form policy of title insurance effective as of the Closing, issued by the Title Company in the full amount of the Purchase Price, insuring title to the Property vested in Buyer, subject only to the exceptions approved by Buyer. IMPORTANT: IN A PURCHASE OR EXCHANGE OF REAL PROPERTY, IT MAY BE ADVISABLE TO OBTAIN TITLE.INSURANCE IN CONNECTION WITH THE CLOSE OF ESCROW SINCE THERE MAY BE PRIOR RECORDED LIENS AND ENCUMBRANCES WHICH AFFECT YOUR INTEREST IN THE PROPERTY BEING ACQUIRED. A NEW POLICY OF TITLE INSURANCE SHOULD BE OBTAINED IN ORDER TO ENSURE YOUR INTEREST IN THE PROPERTY THAT YOU ARE ACQUIRING. 9. Prorations and Adjustments. 9.1 Taxes. Applicable real property taxes and special assessment bonds shall be prorated through Escrow as of the date of the Closing, based upon the latest tax bill available. The Parties agree to prorate as of the Closing any taxes assessed against the Property by supplemental bill levied by reason of events occurring prior to the Closing. Payment of the prorated amount shall be made promptly in cash upon receipt of a copy of any such supplemental bill. Initials PAGE 3 Initials 9.2 Insurance. WARNING: Any insurance which Seller may have maintained will terminate on the Closing. Buyer is advised to obtain appropriate insurance to cover the Property. 9.3 Post Closing Matters. Any item to be prorated that is not determined or determinable at the Closing shall be promptly adjusted by the Parties by appropriate cash payment outside of the Escrow when the amount due is determined. See Paragraph 21.1 of Addendum. 10. Representation and Warranties of Seller and Disclaimers. 10.1 Seller's warranties and representations shall survive the Closing (but no action for breach thereof may be brought after a date which is 30 months after the Closing) and shall not be merged into the Grant Deed, and are true, material and relied upon by Buyer in all respects. Seller hereby makes the following warranties and representations to Buyer: (a) Authority of Seller. Seller is the owner of the Property and/or has the full right, power and authority to enter into this Agreement and the documents required hereby to be executed by Seller, and to sell, convey and transfer the Property to Buyer as provided herein, and to perform Seller's obligations hereunder. (b) Corporate Actions. All requisite corporate action has been taken by Seller in connection with the entering into.this Agreement and the documents required hereby to be executed by Seller, and the consummation of the transactions contemplated hereby. (c) Signature Authority. The individuals executing this Agreement and the documents required hereby to be executed by Seller on behalf of Seller have the legal power, right and actual authority to bind Seller to the terms and conditions hereof and thereof. (d) Binding Obligations. This Agreement and all documents required hereby to be executed by Seller are and will be valid, legally binding obligations of and enforceable against Seller in accordance with their terms, subject only to applicable bankruptcy, insolvency, reorganization, moratorium laws or similar laws or equitable principles affecting or limiting the rights of contracting parties generally. (e) Accuracy of Representations. No representation, warranty or statement of Seller in this Agreement or in any document furnished or to be furnished to Buyer pursuant hereto contains or will contain any untrue statement of a material fact, or omits or will omit to state a material fact necessary to make the statements or facts contained therein not misleading. Except to the extent set forth in writing from Seller, Seller's representations and warranties made in this Paragraph will be continuing and will be true and correct as of the Closing with the same force and effect as if remade by Seller at that time. (f) Maintenance During Escrow and Equipment Condition At Closing. Except as otherwise provided in paragraph 9.1(m) hereof, Seller shall maintain the Property until the Closing in its present condition, ordinary wear and tear and damage due to casualty excepted. (g) Hazardous Substances/Storage Tanks. Seller has no knowledge, except as otherwise disclosed to Buyer in writing, of the existence or prior existence (during the time period that Seller owned the Property) on the Property of any Hazardous Substance, nor of the existence or prior existence (during the time period that Seller owned the Property) of any above or below ground storage tank. (h) Compliance. Seller has no knowledge of any aspect or condition of the Property (excluding any structures thereon) which violates applicable laws, rules, regulations, codes or covenants, conditions or restrictions, or that there is any unfulfilled order or directive of any applicable governmental agency requiring any investigation or remediation be performed on the Property (other than any structures thereon). (i) Changes in Agreements. Prior to the Closing, Seller will not violate or modify any Other Agreement, or create any new leases or Other Agreements affecting the Property, without Buyer's written approval, which approval will not be unreasonably withheld. Q) Property. Possessory Rights. Seller has no knowledge that anyone will, at the Closing, have any right to possession of the (k) Mechanics' Liens. There are no unsatisfied mechanic's or materialman's lien rights concerning the Property. (1) Actions, Suits or Proceedings. Seller has no knowledge of any actions, suits or proceedings pending or threatened before any commission, board, bureau, agency, arbitrator, court or tribunal that would affect the Property or the right to occupy or utilize same. (m) Notice of Changes. Seller will promptly notify Buyer and Brokers in writing of any Material Change (see paragraph 9.1(n)) affecting the Property that becomes known to Seller prior to the Closing. (n) No Seller Bankruptcy Proceedings. Seller is not the subject of a bankruptcy, insolvency or probate proceeding. (o) Personal Property. Seller has no knowledge that anyone will, at the Closing, have any right to possession of any personal property included in the Purchase Price nor knowledge of any liens or encumbrances affecting such personal property, except as disclosed by this Agreement or otherwise in writing to Buyer. 10.2 Buyer hereby acknowledges that, except as otherwise stated in this Agreement, Buyer is purchasing the Property in its existing condition and will, by the time called for herein, make or have waived all inspections of the Property Buyer believes are necessary to protect its own interest in, and its contemplated use of, the Property. The Parties acknowledge that, except as otherwise stated in this Agreement, no representations, inducements, promises, agreements, assurances, oral or written, concerning the Property, or any aspect of the occupational safety and health laws, Hazardous Substance laws, or any other act, ordinance or law, have been made by either Party, or relied upon by either Party hereto. 10.3 In the event that Buyer (independently or by Seller disclosure) learns that a Seller representation or warranty might be untrue prior to the Closing, and Buyer elects to purchase the Property anyway then, and in that event, Buyer waives any right that it may have to bring an action or proceeding against Seller regarding said representation or warranty. 10.4 Any environmental reports, soils reports, surveys, and other similar documents which were prepared by third party consultants and provided to Buyer by Seller or Seller's representatives (collectively, the "Seller's Third Party Reports"), have been delivered as an accommodation to Buyer and without any representation or warranty as to the sufficiency, accuracy, completeness, and/or validity of said documents, all of which Buyer relies on at its own risk. Seller believes said documents to be accurate, but Buyer is advised to retain appropriate consultants to review said documents and investigate the Property. If the transaction fails to close, other than as a result of Seller's default, all of the Seller's Third Party Reports shall be delivered to Seller at no cost to Seller. 10.5 Disclaimer of Representations or Warranties by Seller. (a) Buyer acknowledges to Seller that as of the Closing it will have conducted any and all inspections, investigations, tests, analyses, reviews and studies that Buyer may have desired and will have evaluated the Property (including, without limitation, the physical nature and environmental condition of the Property), to the full and complete satisfaction of Buyer and that Buyer will acquire the Property solely on the basis of the foregoing and the title insurance protection afforded by the title insurance policy, and not on the basis of any information provided or any representations, warranties or covenants made by Seller, or any person acting on Seller's behalf, other than the express representations, warranties and covenants of Seller set forth in this Agreement. (b) EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, BUYER ACKNOWLEDGES AND AGREES THAT THE SALE OF THE PROPERTY HEREUNDER IS AND WILL BE MADE ON AN "AS -IS, WHERE -IS" BASIS AND WITH ALL FAULTS AS OF THE DATE OF THE CLOSE OF ESCROW, WITHOUT ANY REPRESENTATIONS OR WARRANTIES AS TO THE PHYSICAL CONDITION OR ENVIRONMENTAL CONDITION OF THE PROPERTY, OR ANY OTHER REPRESENTATIONS OR WARRANTIES. Initials PAGE 4 Initials EXCEPT TO THE EXTENT EXPRESSLY SET FORTH IN THIS AGREEMENT, SELLER HAS NOT MADE, DOES NOT MAKE, AND SPECIFICALLY NEGATES AND DISCLAIMS ANY REPRESENTATIONS, WARRANTIES, COVENANTS OR OBLIGATIONS OF ANY KIND OR CHARACTER WHATSOEVER, WHETHER EXPRESS OR IMPLIED, ORAL OR WRITTEN, PAST, PRESENT, FUTURE OR OTHERWISE, OF, AS, TO, CONCERNING OR WITH RESPECT TO, THE PROPERTY, OR THE MERCHANTABILITY OR FITNESS OF THE PROPERTY FOR ANY PARTICULAR PURPOSE. (c) Buyer further acknowledges that certain information and materials provided or to be provided by Seller or any person acting on Seller's behalf with respect to the Property may have been obtained from third parties (the "Third Party Reports"), and that Seller has not made any independent investigation or verification of information and materials set forth in the Third Party Reports, and that Seller therefore disclaims any representations or warranties as to the accuracy or the completeness of information and materials set forth in the Third Party Reports. Seller will not be liable for any negligent misrepresentation set forth in a Third Party Reports that is not the result of a misrepresentation by the Seller or its agents or employees to the consultant preparing the Third Party Reports. (d) As used in this Agreement, the phrase "Seller's knowledge" (or similar phrase) means the actual, present knowledge of Jeffrey A. Forgang whose title is vice president, environmental, health & safety, without any duty of inquiry or investigation. Seller represents and warrants to Buyer that Jeffrey A. Forgang is the person employed by Seller who is most knowledgeable about the condition of the Property and best able to make the representations and warranties set forth herein. 11. Possession. Possession of the Property shall be given to Buyer at the Closing free and clear of any claims of possession by any third parties. 12. Buyer's Entry. At any time during the Escrow period, Buyer, and its agents and representatives, shall have the right at reasonable times upon reasonable advance notice to Seller, to enter upon the Property for the purpose of making inspections and tests specified in this Agreement. No destructive or physically invasive testing shall be conducted, however, without Seller's prior approval which shall not be unreasonably withheld. Following any such entry or work, unless otherwise directed in writing by Seller, Buyer shall return the Property to the condition it was in prior to such entry or work, including the recompaction or removal of any disrupted soil or material as Seller may reasonably direct. All such inspections and tests and any other work conducted or materials furnished with respect to the Property by or for Buyer shall be paid for by Buyer as and when due and Buyer shall indemnify defend, protect and hold harmless Seller and the Property of and from any and all claims, liabilities, losses, expenses (including reasonable attorney's fees), damages, including those for injury to person or property, arising out of or relating to any such work or materials or the acts or omissions of Buyer, its agents or employees in connection therewith. If Seller does not provide its consent to entry onto the Property within 24 hours of request, or consent to invasive testing within 2 business days of request, the Contingency Period (as defined in Paragraph 21.4 of the Addendum) and the date of Closing shall each be extended by the number of days of delay in approving the entry or the testing. See Paragraph 21.1 of Addendum. 13. Further Documents and Assurances. The Parties shall each, diligently and in good faith, undertake all actions and procedures reasonably required to place the Escrow in condition for Closing as and when required by this Agreement. The Parties agree to provide all further information, and to execute and deliver all further documents, reasonably required by Escrow Holder or the Title Company. 14. Attorneys' Fees. If any Party brings an action or proceeding (including arbitration) involving the Property whether founded in tort, contract or equity, or to declare rights hereunder, the Prevailing Party (as hereafter defined) in any such proceeding, action, or appeal thereon, shall be entitled to reasonable attorneys' fees. Such fees may be awarded in the same suit or recovered in a separate suit, whether or not such action or proceeding is pursued to decision or judgment. The term, "Prevailing Party" shall include, without limitation, a Party who substantially obtains or defeats the relief sought, as the case may be, whether by compromise, settlement, judgment, or the abandonment by the other Party of its claim or defense. The attorneys' fees award shall not be computed in accordance with any court fee schedule, but shall be such as to fully reimburse all attorneys' fees reasonably incurred. 15. Prior Agreements/Amendments. 15.1 This Agreement supersedes any and all prior agreements between Seller and Buyer regarding the Property. 15.2 Amendments to this Agreement are effective only if made in writing and executed by Buyer and Seller. 16. Notices. 16.1 Whenever any Party or Escrow Holder herein shall desire to give or serve any notice, demand, request, approval, disapproval or other communication, each such communication shall be in writing and shall be delivered personally, by messenger or by mail, postage prepaid, to the address set forth in this Agreement or by facsimile transmission. 16.2 Service of any such communication shall be deemed made on the date of actual receipt if personally delivered. Any such communication sent by regular mail shall be deemed given 48 hours after the same is mailed. Communications sent by United States Express Mail or overnight courier that guarantee next day delivery shall be deemed delivered 24 hours after delivery of the same to the Postal Service or courier. Communications transmitted by facsimile transmission shall be deemed delivered upon telephonic confirmation of receipt (confirmation report from fax machine is sufficient), provided a copy is also delivered via delivery or mail. If such communication is received on a Saturday, Sunday or legal holiday, or after 5:00 p.m. (PT) it shall be deemed received on the next business day. 16.3 Any Party hereto may from time to time, by notice in writing, designate a different address to which, or a different person or additional persons to whom, all communications are thereafter to be made. 17. Duration of Offer. 17.1 If this offer is not accepted by Seller on or before 5:00 P.M. according to the time standard applicable to the City of Vernon, California on a date which is 5 days after the date first above written, it shall be deemed automatically revoked. 17.2 The acceptance of this offer, or of any subsequent counter offer hereto, that creates an agreement between the Parties as described in paragraph 1.2, shall be deemed made upon delivery to the other Party herein of a duly executed writing unconditionally accepting the last outstanding offer or counteroffer. 18. Damages For Default. 18.1 Default by Seller. IF ESCROW DOES NOT CLOSE DUE TO THE DEFAULT OR FAILURE TO PERFORM OF SELLER, BUYER MAY ELECT EITHER TO: (A) ENFORCE SPECIFIC PERFORMANCE OF THIS AGREEMENT AGAINST SELLER AND MAKE A CLAIM FOR ALL LOSSES, COSTS, AND DAMAGES (INCLUDING, WITHOUT LIMITATION, LOSSES ARISING OUT OF THE LOSS OF USE OF THE PROPERTY, THE COSTS OF OBTAINING THE USE OF ALTERNATIVE PROPERTY, AND ANY DIMINUTION OF THE VALUE OF THE PROPERTY, AND OTHER CONSEQUENTIAL DAMAGES, AS WELL AS REASONABLE ATTORNEYS' FEES AND COSTS); OR (B) TERMINATE THIS PURCHASE AGREEMENT AND ESCROW BY WRITTEN NOTICE DELIVERED TO SELLER IN WHICH EVENT THE DEPOSIT SHALL BE RETURNED TO BUYER AND SELLER MAY MAKE A CLAIM Initials PAGE 5 Initials FOR ALL DAMAGES AS DESCRIBED IN CLAUSE A ABOVE. FOLLOWING THE RESOLUTION OF ANY CLAIM MADE HEREUNDER (INCLUDING SELLER'S PAYMENT IN GOOD FUNDS OF ANY DAMAGES AWARDED TO BUYER), NEITHER PARTY HERETO SHALL HAVE ANY FURTHER OBLIGATION OR LIABILITY TO THE OTHER HEREUNDER. 18.2 Default by Buyer. IN THE EVENT THAT THE CLOSING AND THE CONSUMMATION OF THE TRANSACTIONS HEREIN CONTEMPLATED DO NOT OCCUR BY REASON OF ANY DEFAULT OF BUYER, BUYER AND SELLER ACKNOWLEDGE THAT IT WOULD BE IMPRACTICAL AND EXTREMELY DIFFICULT TO ESTIMATE THE DAMAGES WHICH SELLER WILL SUFFER. THEREFORE BUYER AND SELLER HEREBY AGREE THAT A REASONABLE ESTIMATE OF THE DAMAGES THAT SELLER WOULD SUFFER IN THE EVENT THAT BUYER SO DEFAULTS IS AND WILL BE, AS SELLER'S SOLE AND EXCLUSIVE REMEDY (WHETHER AT LAW OR IN EQUITY), AN AMOUNT EQUAL TO THE DEPOSIT (INCLUDING ALL ACCRUED INTEREST THEREON). SAID AMOUNT WILL BE THE FULL, AGREED AND SOLE AMOUNT OF MONETARY DAMAGES FOR THE DEFAULT OF BUYER, ALL OTHER CLAIMS TO DAMAGES OR OTHER REMEDIES, INCLUDING WITHOUT LIMITATION THE REMEDY OF SPECIFIC PERFORMANCE, BEING HEREIN EXPRESSLY WAIVED BY SELLER. THE PAYMENT OF SUCH AMOUNT IS NOT INTENDED AS A FORFEITURE OR PENALTY, BUT IS INTENDED TO CONSTITUTE LIQUIDATED DAMAGES TO SELLER PURSUANT TO CALIFORNIA CIVIL CODE §§1671, 1676 AND 1677. SELLER HEREBY WAIVES THE PROVISIONS OF CALIFORNIA CIVIL CODE §3389. THIS AGREEMENT WILL THEREUPON BE TERMINATED AND NEITHER PARTY WILL HAVE ANY FURTHER RIGHTS OR OBLIGATIONS HEREUNDER, EXCEPT FOR THE RIGHT OF SELLER TO COLLECT SUCH LIQUIDATED DAMAGES FROM BUYER OR (IF APPLICABLE) FROM ESCROW HOLDER AND, IF LEGAL ACTION IS REQUIRED TO COLLECT SUCH LIQUIDATED DAMAGES, TO RECOVER ITS ATTORNEYS' FEES AND COSTS PURSUANT TO PARAGRAPH 14. NOTWITHSTANDING THE FOREGOING, AND NOTWITHSTANDING THE TERMINATION OF THE AGREEMENT, SELLER WILL STILL BE ENTITLED TO INDEMNIFICATION AS PROVIDED IN PARAGRAPH 12 OF THIS AGREEMENT Buyer's Initials Seller's. Initials 19. Miscellaneous. 19.1 Binding Effect. This Agreement shall be binding on the Parties. 19.2 Applicable Law. This Agreement shall be governed by the laws of the state of California. 19.3 Time of Essence. Time is of the essence of this Agreement. 19.4 Counterparts. This Agreement may be executed by Buyer and Seller in counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument. Escrow Holder, after verifying that the counterparts are identical except for the signatures, is authorized and instructed to combine the signed signature pages on one of the counterparts, which shall then constitute the Agreement. 19.5 Waiver of Jury Trial. THE PARTIES HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING INVOLVING THE PROPERTY OR ARISING OUT OF THIS AGREEMENT. 19.6 Conflict. Any conflict between the printed provisions of this Agreement and the typewritten or handwritten provisions shall be controlled by the typewritten or handwritten provisions. 19.7 1031 Exchange. Both Seller and Buyer agree to cooperate with each other in the event that either or both wish to participate in a 1031 exchange. Any party initiating an exchange shall bear all costs of such exchange. 20. Construction of Agreement. In construing this Agreement, all headings and titles are for the convenience of the parties only and shall not be considered a part of this Agreement. Whenever required by the context, the singular shall include the plural and vice versa. Unless otherwise specifically indicated to the contrary, the word "days" as used in this Agreement shall mean and refer to calendar days. This Agreement shall not be construed as if prepared by one of the parties, but rather according to its fair meaning as a whole, as if both parties had prepared it. 21. Additional Provisions: Additional provisions of this offer, if any, are as follows or are attached hereto by an addendum (the "Addendum") consisting of paragraphs through 21.1 through 21.10. 22. Buyer's Representations and Warranties. The following constitute representations and warranties of Buyer to Seller as of the Date of Agreement and as of the Closing: (a) Buyer has the legal power, right and authority to enter into this Agreement and the documents required hereby to be executed by Buyer, and to consummate the transactions contemplated hereby. (b) All requisite corporate action has been taken by Buyer in connection with the entering into this Agreement and the documents required hereby to be executed by Buyer, and the consummation of the transactions contemplated hereby. (c) The individuals executing this Agreement and the documents required hereby to be executed by Buyer on behalf of Buyer have the legal power, right and actual authority to bind Buyer to the terms and conditions hereof and thereof. (d) This Agreement and all documents required hereby to be executed by Buyer are and will be valid, legally binding obligations of and enforceable against Buyer in accordance with their terms, subject only to applicable bankruptcy, insolvency, reorganization, moratorium laws or similar laws or equitable principles affecting or limiting the rights of contracting parties generally. (e) No representation, warranty or statement of Buyer in this Agreement or in any document furnished or to be furnished to Seller pursuant hereto contains or will contain any untrue statement of a material fact, or omits or will omit to state a material fact necessary to make the statements or facts contained therein not misleading. Except to the extent set forth in writing from Buyer, Buyer's representations and warranties made in this Paragraph will be continuing and will be true and correct as of the Closing with the same force and effect as if remade by Buyer at that time. Initials PAGE 6 Initials 23. Acceptance. 23.1 Seller accepts the foregoing offer to purchase the Property and hereby agrees to sell the Property to Buyer on the terms and conditions therein specified. 23.2 Seller acknowledges receipt of a copy hereof and has delivered a signed copy to Buyer. NOTE: A PROPERTY INFORMATION SHEET IS REQUIRED TO BE DELIVERED TO BUYER BY SELLER UNDER THIS AGREEMENT. The undersigned Buyer offers and agrees to buy the Property on the terms and conditions stated and acknowledges receipt of a copy hereof. ATTEST: Bruce V. Malkenhorst, City Clerk BUYER: City of Vernon By: R �L Si!i Le nis C . Malburg WAWWMW4# Mayor Dated: G"g, Address: 4305 Santa Fe Avenue Vernon, CA 90058 Telephone: 323-583-8811 Fax: 323-826-1438 Approved By: EricT. Fresch, City Attorney Dated: 15—e V Address: 4305 Santa Fe Avenue Vernon, CA 90058 Telephone: 323-583-8811 Fax: 323-826-1438 Federal ID No.: 95-6000808 SELLER: Seller: Saint-Gobain Containers, Inc. Address: 1509 Macedonia Avenue Muncie, IN 47307-4200 Attn: David W. Knight, Esq. Telephone: (765) 741-7635 Fax: (765) 747-6542 Federal ID No. 03'i 15"05 Initials PAGE 7 Initials EXHIBIT n AIR COMMERCIAL REAL ESTATE ASSOCIATION PROPERTY INFORMATION SHEET (Non -Residential) PREFACE: Purpose: This Statement is NOT a warranty as to the actual condition of the Property/Premises. The purpose is, instead, to provide the bFQkeFs and potential buyerAsssee with important information about the Property/Premises which is currently in the actual knowledge of the Owner and which the Owner is required by law to disclose. Adual Knowledge; FGF puFpeses of this Statement the phrase 'aGtual kAowledge' means; thA_ aWa-le RA-6.6- A-f a f8Gt, OF the awa-Fe -near- of suffin-ient and- n-im-umstanGer. so as to Gauss one to believe that a GeFtaffiA SltUatiGA OF Genditien PFebably exists. TO WHOM IT MAY CONCERN: SAINT-GOBAIN CONTAINERS, INC. ("Owner"), owns the Property/Premises commonly known by the street address of 4855 East 52nd Place located in the City of Vernon County of, Los Angeles State of California and generally described as (describe briefly the nature of the premises or property) approximately 10. 6 acres of industrial land and improvements, APN: 6314-022-008; 6314-019-009; 6314-020-011; 6314-020-003 (herein after "Property"), and certifies that: 1. 2 Equipment. A. QwseF has so aGtual knowledge that the heating, VGRtilatil;g, alF GGsditiening, plumbing, leading dGGFS, SISGtF'Gal and lighting systems, life safety systems, 88GUFity SyStSMA 2Rd- -FRA-9--hainin-al equipment existing on the Pfepefty as of the date hereof, if any, aFe not On good OPOFatiAg eFdeF and Gendition, exnept (if there are no exceptions write "N9NE"); included with the Pmperiyexsept (if there are ne exceptions write "NANE"`• 3. Soil Conditions. Owner has no actual knowledge that the Property has any slipping, sliding, settling, flooding, ponding or any other grading, drainage or soil problems, except (if there are no exceptions write "NONE"): 4. Utilities. Owner represents and warrants that the Property is served by the following utilities (check the appropriate boxes) ❑ public sewer system and the cost of installation thereof has been fully paid ❑ private septic system, ❑ electricity, ❑ natural gas, ❑ domestic water, ❑ telephone, and ❑ other: 5. Natural Hazard Zone. Owner has no actual knowledge that the Property is located within a delineated flood, earthquake, or other natural hazard zone, except (if there are no exceptions write "NONE"): as set forth in the Seller's Mandatory Disclosure Statement (AIR Form SMD-1-8/OOE) 6. Compliance With Laws. Owner has no actual knowledge of any aspect or condition of the Property (excludin9 any etructure5 thereon) which violates applicable laws, rules, regulations, codes, or covenants, conditions or restrictions, or of any unfulfilled order or directive of any applicable government agency that any work of investigation; Or remediation, repaiF, Fnaintena ePA is to be performed on the Property (excluding any 5tructure5 thereon), except (if there are no exceptions write "NONE"): Exhibit A Page 1 of 3 02000 - AIR Commercial Real Estate Association REVISED FORM PI-3-8/OOE 7. Hazardous Substances. A. Owner has no actual knowledge of the Property ever having been used as a waste dump, of the past (during the period of Owne o ownership) or present existence of any above or below ground storage tanks on the Property, or of the current existence on the Property of asbestos, transformers containing PCB's, or any Hazardous, toxic or infectious Substance whose nature and/or quantity of existence, use, manufacture or effect, render it subject to Federal, state or local regulation, investigation, remediation or removal as potentially injurious to public health or welfare, except (if there are no exceptions write "NONE"): as set forth in the Phase I environmental report dated , 2004, and in the Phase II environmental report dated , 2004, prepared by URS. B. Owner represents and warrants.that it is not currently, and never has been engaged in the business of hauling waste, except (if there are no exceptions write "NONE"): 8. Fire Damage. 0;.A.IAAF hAA RA metual knowledge of any StFUGtUFS on the Property having suffeFed iriatsffial flie damage, exGept (if there are ne- exi;eptions write 9. Actions, Suits or Proceedings. Owner has no actual knowledge that any actions, suits or proceedings are pending or threatened before any court, arbitration tribunal, governmental department, commission, board, bureau, agency or instrumentality that would affect the Property or the right or ability of an owner or tenant to convey, occupy or utilize the Property, except (if there are no exceptions write "NONE"): 10. Governmental Proceedings. Owner has no actual knowledge of any existing or contemplated condemnation, environmental, zoning, redevelopment agency plan or other land use regulation proceedings which could detrimentally affect the value, use and operation of the Property, except (if there are no exceptions write "NONE"): 11. Unrecorded Title Matters. Owner has no actual knowledge of any encumbrances, covenants, conditions, restrictions, easements, licenses, liens, charges or other matters which affect the title of the Property that are not recorded in the official records of the county recorder where the Property is located, except (if there are no exceptions write "NONE"): 12. Leases. Owner has no actual knowledge of any leases, subleases or other tenancy agreements affecting the Property, except (if there are no exceptions write "NONE"): 13. Options. Owner has no actual knowledge of any options to purchase, rights of first refusal, rights of first offer or other similar agreements affecting the Property, except (if there are no exceptions write "NONE"): 14. OthOF. (it will be PF86UFA ed that there aF8 no add s whie- h warraAt d-is n- le -is u Fe U Riess they arag At farth hare4n Page 2 of 3 02000 - AIR Commercial Real Estate Association REVISED FORM PI-3-8/OOE The statements herein will be relied upon by BUyC . Therefore, Owner ManagSF -has reviewed and modified this printed statement as necessary to accurately and completely state all the known material facts concerning the Property. To the extent such modifications are not made, this statement may be relied upon as printed. This statement, however, shall not relieve a buyer of lessee of responsibility for independent investigation of the Property. Owner agrees to promptly notify, in writing, all appropriate parties of any material changes which may occur in the statements contained herein from the date this statement is signed until title to the Property is transferred exesated. Date: 20 "OWNER" (Fill in date of execution) SAINT—GOBAIN CONTAINERS, INC. By: Name Printed: Title: Buyer/lessee hereby acknowledges receipt of a copy of this Propery Information Sheet on By: Name Printed: Title: NOTICE: These forms are often modified to meet changing requirements of law and industry needs. Always write or call to make sure you are utilizing the most current form: AIR Commercial Real Estate Association, 700 South Flower Street, Suite 600, Los Angeles, CA 90017, Telephone No.: (213) 687-8777 Fax No.: (213) 687-8616. Page 3 of 3 02000 - AIR Commercial Real Estate Association REVISED FORM PI-3-8100E EXHIBIT i SELLER'S MANDATORY DISCLOSURE STATEMENT (Required bylaw on transactions involving non-residential properties in California) DO NOT USE THIS FORM WITH REGARD TO THE SALE OF RESIDENTIAL PROPERTIES AIR Commercial Real Estate Association This disclosure statement is intended to be a part of the AIR 0 STANDARD OFFER, AGREEMENT AND ESCROW INSTRUCTIONS FOR PURCHASE OF REAL ESTATE (See paragraph 9.1(a) of said document) or ❑ (the "Purchase Agreement") dated October , 2004, regarding that certain real property commonly known as: 4855 East 52nd Place, Vernon, California (the "Property") wherein SAINT—GOBAIN CONTAINERS, INC. is the Seller and THE CITY OF VERNON is the Buyer. Note: This disclosure statement is not designed nor intended to be used in place of the AIR standard Property Information Sheet. Both documents should be used in every transaction involving a sale. In order to comply with State law concerning disclosures to a potential purchaser, Seller elects to: ❑ A. Utilize a report prepared by a professional consultant which has been approved by the AIR, ie. JCP Geologists (800) 748-5233. A copy of their report is attached hereto. (Complete paragraphs 8 and 9 and sign this Statement in the place provided.) ❑ B. Utilize a report prepared by a different consultant, ie. ( ) A copy of their report is attached hereto. (Complete paragraphs 8 and 9, sign this Statement in the place provided, and attach a copy of The Commercial Property Owner's Guide to Earthquake Safety) ❑ C. Complete this Disclosure Statement without the assistance of a professional consultant. (Complete paragraphs 1 through 11 and sign this Statement in the place provided. Remember to attach a copy of The Commercial Property Owner's Guide to Earthquake Safety.) 1. EARTHQUAKE FAULT ZONES. If the Property is located within a delineated Earthquake Fault Zone (a zone that encompasses a potentially or recently active trace of an earthquake fault that is deemed by the State Geologist to constitute a potential hazard to structures from surface faulting or fault creep), California Public Resources Code §2621 et seq. mandates that prospective purchasers be advised that the Property is located within such a Zone, and that its development may require a geologic report from a state registered geologist. In accordance with such law, Buyer is hereby informed that the Property is ❑ or is not ❑ within a delineated Earthquake Fault Zone. 2. SEISMIC HAZARD ZONES. If the Property is located within a Seismic Hazard Zone as delineated on a map prepared by the California Division of Mines and Geology, California Public Resources Code §2690 et seq. mandates that prospective purchasers be advised that the Property is located within such a Zone. In accordance with such law, Buyer is hereby informed that the Property is ❑ or is not ❑ within a Seismic Hazard Zone. 3. EARTHQUAKE SAFETY. If (1) the improvements on the Property were constructed prior to 1975, and (2) said improvements include structures with (i) pre -cast (e.g., tilt -up) concrete or reinforced masonry walls together with wood frame floors or roofs or (ii) unreinforced masonry walls, Buyer must be provided with a copy of The Commercial Property Owner's Guide to Earthquake Safety (the "Booklet") published by the California Seismic Safety Commission. Buyer is hereby informed that the Property: ❑ (a) meets the foregoing requirements, and a copy of the Booklet and a completed "Commercial Property Earthquake Weakness Disclosure Report" is attached hereto. Within five business days of Buyer's receipt of said Disclosure Report, Buyer shall deliver a duly countersigned copy of the same to Escrow Holder, with a copy to Seller and Seller's Broker. Escrow Holder is hereby instructed that the Escrow shall not close unless and until Escrow Holder has received the Disclosure Report duly signed by both Seller and Buyer. ❑ (b) does not meet the foregoing requirements requiring the delivery of the Booklet. 4. FIRE PROTECTION. If the Property is located within a designated State Responsibility Area as delineated on a map prepared by the California Department of Forestry, California Public Resources Code §4136 mandates that prospective purchasers be advised that the Property is located within a wildfire area which may contain substantial forest fire risks and hazards, that the State may not be responsible to provide fire protection services, and that the Property may be subject to the requirements of Public Resources Code §4291 which requires the periodic removal of brush, the maintenance of firebreaks, and other similar activities. In accordance with such law, Buyer is hereby informed that the Property is ❑ or is not ❑ within a designated State Responsibility Area. 5. FIRE HAZARD. If the Property is located within an area designated as a Very High Fire Hazard Severity Zone pursuant to Government Code §51178 et seq, §51183.5 mandates that prospective purchasers be advised that the Property is located within such a zone and that the Property may be subject to various maintenance, design and/or construction requirements and/or restrictions. In accordance with such law, Buyer is hereby informed that the Property is ❑ or is not ❑ within a designated Very High Fire Hazard Severity Zone. 6. AREA OF POTENTIAL FLOODING. If the Property is located within an area of potential flooding in the event of the failure of a dam as shown on an inundation map designated pursuant to Government Code §8589.5, §8589.4 mandates that prospective purchasers be advised that the Property is located within such an area. In accordance with such law, Buyer is hereby informed that the Property is ❑ or is not ❑ within a designated area of potential flooding. 7. FLOOD HAZARD AREAS. If the Property is located within a designated Federal Flood Hazard Area as delineated on a map prepared by the Federal Emergency Management Agency, Federal law, ie. 42 U.S.C. §4104a, mandates that prospective purchasers be advised that the Property is located within an area having special flood hazards and that flood insurance may be required as a condition to obtaining financing. In accordance with such law, Buyer is hereby informed that the Property is ❑ or is not ❑ within a designated Federal Flood Hazard Area. EXHIBIT "B" Initials Page 1 of 2 Initials 01998 -AIR Commercial Real Estate Association REVISED FORM SMD-1-8/OOE 8. FLOOD DISASTER INSURANCE. if the Seller or Seller's predecessor -in -interest has previously received Federal flood disaster assistance and said assistance was conditioned upon obtaining and maintaining flood insurance on the Property, Federal law, ie. 42 U.S.C. §5154a, mandates that prospective purchasers be advised that they will be required to maintain such insurance on the Property and that if said insurance is not maintained and the Property is thereafter damaged by a flood disaster, the purchaser may be required to reimburse the Federal Government for the disaster relief provided. Buyer is hereby informed that to the best of the Seller's knowledge Federal flood disaster assistance has ❑ or has not ❑ been previously received with regard to the Property. Note: if such disaster assistance has been received, the law species that the required notice be "contained in documents evidencing the transfer of ownership". 0. I.N.A.TER HEATER -OR-A.G.11SIG. if the Property Gentaffins one 9F more Wat8F heaters, Seller is requiFed by Gal*fGFA*a Health and Sat* Gods §19211 to GeFtify to the lBuyeF that all suGh wat8F heatem have been bFaoed, StFapped andiGF anGhered iR aGGGFdaAGe with law. @Uy8F *6 heFeby advi $-eFgaue-fl S-beer 4A&ta4ed- 10. TITLE INSURANCE. In the event that the Purchase Agreement does not at present provide that title insurance will be obtained, Buyer is strongly urged to consider purchasing such insurance, and, in accordance with California Civil Code §1057.6, is advised as follows: IMPORTANT: IN A PURCHASE OR EXCHANGE OF REAL PROPERTY, IT MAY BE ADVISABLE TO OBTAIN TITLE INSURANCE IN CONNECTION WITH THE CLOSE OF ESCROW SINCE THERE MAY BE PRIOR RECORDED LIENS AND ENCUMBRANCES WHICH AFFECT YOUR INTEREST IN THE PROPERTY BEING ACQUIRED. A NEW POLICY OF TITLE INSURANCE SHOULD BE OBTAINED IN ORDER TO ENSURE YOUR INTEREST IN THE PROPERTY THAT YOU ARE ACQUIRING. 11. OTHER. PLEASE NOTE: While the information contained in or attached to this Disclosure Statement is believed to be accurate as of the date that it was prepared, the applicable laws and the areas covered by the various natural hazard zones, etc. can change from time to time. Prior to the close of escrow, Buyer may wish to again check the status of the Property. Also, the city and/or county in which the Property is located may have established natural hazard zones in addition to those listed above. Buyer is advised to check with the appropriate local agency or agencies. The descriptions contained within the above disclosure paragraphs are not intended to be full and complete dissertations of all of the possible ramifications to the Buyer and/or the Property. In the event that this document indicates that the Property is affected by one or more of the disclosures, Buyer is advised to: 1. Review the applicable laws in their entirety. 2. Seek advice of counsel as to the legal consequences of the items disclosed. 3. Retain appropriate consultants to review and investigate the impact of said disclosures. Likewise no representation or recommendation is made by the AIR Commercial Real Estate Association or by any broker as to the legal sufficiency, legal effect, or consequences of this document or the Purchase Agreement to which it relates. Date: 2004 SAINT-GOBAIN CONTAINERS, INC. Seller Receipt of the above Seller's Mandatory Disclosure Statement is hereby acknowledged: Date: 2004 Buyer NOTE: These forms are often modified to meet changing requirements of law and needs of the industry. Always write or call to make sure you are utilizing the most current form: AIR COMMERCIAL REAL ESTATE ASSOCIATION, 700 S. Flower Street, Suite 600, Los Angeles, Calif. 90017 Initials Page 2 of 2 Initials 01998 -AIR Commercial Real Estate Association REVISED FORM SMD-1-8100E Addendum to Standard Offer, Agreement And Escrow Instructions for Purchase of Real Estate Buyer: City of Vernon Seller: Saint-Gobain Containers, Inc. Premises: 4855 E. 52°d Place, Vernon, California Dated: November 3, 2004 In the event of a conflict between the terms of the Standard Offer, Agreement and Escrow Instructions (the "Pre -Printed Form") and this Addendum (the "Addendum"), the terms of the Addendum shall control. Any initially capitalized term used in this Addendum that is not defined herein shall have the meaning ascribed to such term in the Pre -Printed Form. The term "Close of Escrow" (as used in this Addendum) shall have the same meaning as the "Closing" (as used in the Pre -Printed Form). Collectively, the Pre -Printed Form and this Addendum are referred to as the "Agreement". 21.1 Buyer's Due Diligence; Certificate of Closure: Upon mutual execution of the Agreement, Buyer and its agents shall have immediate access to the Property to allow for necessary inspections and testing, subject to the provisions of Paragraph 12 of the Pre -Printed Form. Seller shall, at its cost, undertake all activities required to comply with the laws requiring a seller of property to obtain a Certificate of Closure from the City of Vernon. Seller acknowledges that such activities may require the Seller to undertake some or all of the investigations and reports required for a Phase II Environmental Report, and Seller shall be solely responsible for the cost of such activities to the extent required to obtain the Certificate of Closure. Seller has retained the services of URS Corporation of Santa Ana ("URS") to conduct the testing and analysis and provide the reports required in order to obtain the Certificate of Closure, and Seller shall be solely responsible for the costs of such work (the "Closure Work"). Seller shall also retain the services of URS to conduct the additional testing and analysis and provide the reports required by the Buyer for its due diligence purposes, in accordance with the scope of work described in the memorandum attached hereto as Exhibit A and incorporated herein by this reference (the "Due Diligence Work"). Seller shall cause URS to perform the Due Diligence Work at URS's typical cost for such services, and the cost of the Due Diligence Work shall be allocated to the Buyer at the Closing by the Escrow Officer. In that regard, Paragraph 9 of the Pre -Printed Form is hereby amended to add a new provision as follows: "Seller shall cause URS to invoice separately the Closure Work and the Due Diligence Work, and shall deliver both invoices to Escrow Holder at least five days prior to the Closing Date. Escrow Officer shall allocate the cost of the Closure Work to Seller (unless Seller provides evidence of payment of the Closure Work directly to URS), and shall allocate the cost of the Due Diligence Work to Buyer." To properly allocate the responsibility of each party for such work, Paragraph 12 of the Pre -Printed Form is hereby amended to add the following language at the end of the paragraph: "Notwithstanding anything to the contrary in the Agreement, Seller shall indemnify, defend, protect, and hold harmless Buyer and the Property of and from any and all claims, causes of action, liabilities, obligations, losses, expenses (including reasonable attorneys' fees and costs), and damages, including those for injury to person or property, arising out of or relating to the Closure Work and Buyer shall indemnify defend, protect, and hold harmless Seller and the Property of and from any and all claims, causes of action, liabilities, obligations, losses, expenses (including reasonable attorneys' fees and costs), and damages, including those for injury to person or property, arising out of or relating to the Due Diligence Work." Seller shall cause URS to deliver its report required in connection with the Closure Work (the "Closure Report") and the report required in connection with the Due Diligence Work (the "Due Diligence Report") by 5:00 PM (Pacific Time) on December 1, 2004. Promptly after Buyer's receipt of such reports, Buyer shall notify Seller if any further environmental studies or tests or any further information 01910/0014 110122.2 c:VUPFtbfUadacalsuU"MA110122 2.doc (including, without limitation, supplements to the documents provided by Seller or new studies) are required in order to obtain the required Certificate of Closure from the City of Vernon or to complete Buyer's due diligence. To the extent that such additional studies (the "Additional Studies") are required in order to obtain the Certificate of Closure, Seller shall be responsible for obtaining and paying for such studies. 21.2 Seller's Reports: Within 10 calendar days after mutual execution of this Agreement, Seller shall deliver to Buyer all analyses, tests, reports, or studies that Seller currently has in its possession relating to the condition of the Property, including all soils and geological reports, appraisals, and environmental reports. Buyer hereby acknowledges receipt of Seller's prior Phase I Environmental Report and the current Phase I Environmental Report prepared by URS. Until the Closing, or if the transaction does .not close, such materials shall be held in confidence and shall not be disclosed to any third parties (other than those of Buyer's employees and consultants who have a "need to know" in order to evaluate the purchase contemplated hereby) except as required by law. 21.3 Purchase Price: The Purchase Price constitutes all consideration due to Seller for the Property, and Seller hereby waives and relinquishes any relocation assistance Seller may be entitled to under local, state, or federal law. 21.4 Contingency Period: The time period (the "Contingency Period") for the satisfaction or waiver of all of Buyer's contingencies described in Paragraph 7 of the Pre -Printed Form, shall be 5:00 PM (Pacific Time) on December 15, 2004; provided, however, that notwithstanding such time period, (a) if Seller does not deliver to Buyer the Closure Report and the Due Diligence Report, each in form and substance reasonably acceptable to the City Health Department, by December 1, 2004, or if Buyer requires any Additional Studies the Contingency Period shall be extended by the number of business days between December 1, 2004 and the date on which Buyer receives the Due Diligence Report and the Closure Report (and, if required, any Additional Studies), each in form and substance reasonably acceptable to the City Health Department; and (b) Buyer's period for approving any documents to be provided by Seller, Escrow Holder, the Title Company, or any other agent of Seller (other than URS) shall be not less than 14 days following Buyer's actual receipt of any of such items. 21.5 Contingencies: Buyer shall have until the end of the Contingency Period to determine, in its sole and absolute discretion, whether it is satisfied with all aspects of the Property and the transaction, including, without limitation, those contingencies set forth in Paragraph 7 of the Pre -Printed Form and all other matters related to the Property, including economic analyses, issues related to Hazardous Substances, condition of the Property, its fitness for a particular use, marketability, prospects for future development, use, or occupancy, and any other matter related to Buyer's use of the Property. Notwithstanding anything to the contrary in Paragraph 7.3 of the Pre - Printed Form, Buyer and Seller acknowledge that Buyer may, in its sole and absolute discretion, determine, during the Contingency Period, that there are issues related to the condition of the Property, such as marketability or prospects for future development or existence of Hazardous Substances on the Property, that are not subject to cure by Seller, and that Buyer may terminate this Agreement, and obtain a full refund of its Deposit, if Buyer does not approve. Buyer's Contingencies within the Contingency Period for a reason that is not subject to cure. Buyer, in its sole and absolute discretion, may terminate the Agreement within the Contingency Period and receive a full refund of its Deposit. 21.6 Condition of Property: • Seller shall deliver the Property to Buyer at the Close of Escrow cleared of all fixtures, furniture, equipment, and personal property, including, without limitation, the furnace and all glass manufacturing equipment, ovens, conveyors, and other trade fixtures and equipment; provided, however, that Seller will not remove the process piping currently installed in the building on 01910/0014 110122.2 2 c:VUWrIblUadM\SUMAMAI 10122 2AM the Property, and provided further that Seller may, at its option, either remove the structural steel or leave it in place at the Close of Escrow. • Notwithstanding anything to the contrary in this Agreement, Seller shall not remove any structural steel or any other portion of the building that could affect the structural integrity of the building, weaken the support of the foundation, walls, floors, or roof, or cause the building to be unsafe. Prior to the Closing, Seller shall fill with clean sand or dirt all holes, borings, sumps, and other areas on the Property that could pose a hazard to a person walking on the Property. In addition, stairwells, holes, or openings in the building that could pose a hazard to a person walking through the building shall be covered, secured, filled, or otherwise protected to ensure the safety of anyone entering the building. • Seller shall indemnify, defend, protect, and hold harmless Buyer, its elected officials, staff, employees, agents, and representatives, and the Property of and from any and all claims, causes of action, liabilities, obligations, losses, expenses (including reasonable attorneys' fees and costs), and damages, including those for injury to person or property, arising out of or relating to Seller's failure to comply with the terms of this section of Paragraph 21.6. • There is currently an oxygen plant located on the Property, and all of the fixtures, furniture, equipment, and personal property related to the oxygen plant (collectively, the "Oxygen Plant Equipment") are to be removed by Seller, at its sole cost, prior to the Close of Escrow. Notwithstanding anything to the contrary in this Paragraph, if Seller is not able to remove all of the Oxygen Plant Equipment prior to the Close of Escrow, the parties will proceed to the Close of Escrow, with a $1,000,000 holdback (the "Equipment Holdback Funds") from the Purchase Price being retained in Escrow. Seller shall, within 60 days following the Close of Escrow, remove all of the Oxygen Plant Equipment. Seller and its agents and contractors shall have unrestricted right to enter upon the Property in order to effectuate such removal, and shall indemnify, defend, protect, and hold harmless Buyer, its elected officials, staff, employees, agents, and representatives, and the Property of and from any and all claims, causes of action, liabilities, obligations, losses, expenses (including reasonable attorneys' fees and costs), and damages, including those for injury to person or property, arising out of or relating to the entry of Seller and its agents and contractors onto the Property. Seller's obligation to fill any holes, borings, or other areas on the Property with clean sand or dirt and to cover, secure, fill, or otherwise protect against hazards resulting from holes or openings in the building, and Seller's indemnity regarding its failure comply with such obligations, as set forth in Paragraph 21.6 above, shall apply to any holes, borings, sumps, or openings that result from the removal of the Oxygen Plant Equipment. Within thirty (30) days after Buyer's receipt of written notice that Seller has removed the Oxygen Plant Equipment, Buyer shall approve the removal and the condition of the Property following the removal, and if, in Buyer's reasonable judgment, the Property following removal does not contain Hazardous Substances which were not reasonably discoverable until the removal of the Oxygen Plant Equipment, Buyer and Seller shall send mutual instructions to the Escrow Officer to release to Seller the Equipment Holdback Funds. If Hazardous Substances are found to exist on the Property following the removal of the Oxygen Plant Equipment (which were not reasonably discoverable until the removal of the Oxygen Plant Equipment), the Equipment Holdback Funds will be equitably allocated between Buyer and Seller to reimburse Buyer for remediation costs. If Seller has not removed the Oxygen Plant Equipment within 60 days after the Close of Escrow, Seller shall commence, upon the 61St day after the Close of Escrow, to pay rent for the Property in the amount of $15,000 for the period from the 61 st day after the Close of Escrow until the 91st day after the Close of Escrow, and the amount of $150,000 for each 30 day period thereafter (in each case, prorated for partial 30 day periods) through the day on which Seller delivers to Buyer written notice that the Oxygen Plant Equipment has been removed. Buyer and Seller will promptly notify the Escrow Holder in writing when the Oxygen Plant Equipment has been satisfactorily removed from the Property and Buyer has 01910i0014 110122.2 3 c:VRMrthMa4M\5 =rX1lolu E.dw approved the condition of the Property as described above. If Buyer and Seller have not notified Escrow Holder in writing that the Oxygen Plant Equipment has been satisfactorily removed from the Property by the 61St day after the Close of Escrow, Escrow Holder is hereby directed to pay to Buyer, on the 61 st day following the Close of Escrow, the first 30 day period's rent in the amount of $15,000 from the Equipment Holdback Funds, and to make a rental payment in the amount of $150,000 to Buyer on the 91 St day following the Close of Escrow, and at the end of each 30 day period thereafter, unless, prior to such payment date, Escrow Holder receives written notice signed by Buyer and Seller that the Oxygen Plant Equipment has been removed. If the Oxygen Plant Equipment is removed during a period for which the rent has been paid, Buyer shall promptly (and in any event within thirty (30) days) refund a prorated portion of the rent paid. If the Oxygen Plant Equipment has not been removed by the 121 St day after the Close of Escrow, then upon not less than 5 days' notice to Seller (which may be given prior to the end of the 121 day period), Buyer shall have the right, but not the obligation, to remove the Oxygen Plant Equipment, and the actual, out of pocket cost of such removal will be paid to Buyer out of the Equipment Holdback Funds. In addition to paying the rent out of the Equipment Holdback Funds, the Escrow Holder shall immediately reimburse the Buyer, in accordance with receipts delivered by Buyer to Escrow Holder (with copies to Seller) the full reasonable amount of the cost of any security required to protect the Oxygen Plant Equipment after the Closing, the actual, out of pocket cost of the removal of the Oxygen Plant Equipment, and the actual, out of pocket cost of storage of the Oxygen Plant Equipment following removal by the Buyer, and the actual out of pocket cost of any remediation required as a result of the removal of the Oxygen Plant Equipment (which remediation shall only apply to Hazardous Materials which were not reasonably discoverable until the removal of the Oxygen Plant Equipment). Any remaining amounts left in the Equipment Holdback Funds shall be distributed to Seller after the Oxygen Plant Equipment has been removed, and Buyer has approved the condition of the Property following such removal (or after all payments have been made to Buyer as provided above). The Equipment Holdback Funds are intended as a reasonable estimate of the possible costs that could be incurred by the Buyer in storing and removing the Oxygen Plant Equipment, and do not in any way limit the Seller's obligation for such costs. If the Buyer's costs for the items described in this Paragraph 21.6 exceed the Equipment Holdback Funds, Seller shall promptly after receipt of invoice and evidence of costs reimburse all costs incurred by Buyer in excess of the amount of the Equipment Holdback Funds. Following the notice period described above, Buyer shall also have the right to store the Oxygen Plant Equipment in the name of and for the account of Seller. 21.7 Termination of Escrow: Notwithstanding anything to the contrary in Paragraph 6.7 of the Pre -Printed Form, upon any termination of this Agreement and the Escrow for any reason other than Buyer's default hereunder, Escrow Holder shall refund to Buyer the entire Deposit. 21.8 Role of City Health Department: It is understood that nothing in this Agreement affects or limits the City Health Department's responsibilities in the administration of local, state and federal law with respect to remediation of the Property, if such remediation is necessary. Seller agrees that neither Buyer's relationship to the City Health Department nor anything required of Seller by the City Health Department in carrying out its responsibilities under the law, shall excuse Seller's obligations under this Agreement. It is further understood that Buyer's approval of any contingency relative to the condition of the Property only includes approval by the Buyer (City of Vernon), and does not necessarily constitute approval by the City Health Department. 21.9 Closing. If the Due Diligence Report and the Closure Report, each in form and substance reasonably acceptable to the City Health Department, are delivered to the Buyer by 5:00 PM (Pacific Time) on December 1, 2004, and the Buyer approves the purchase of the Property on or before 5:00 PM (Pacific Time) on the last day of the 01910/0014 110122.2 4 cAnWnblVadomisumm Al 10122_2.dm Contingency Period (provided, however, that if the Contingency Period was extended in accordance with Paragraph 21.4 above, the Closing Date shall be extended by the same number of days), the purchase and sale of the Property shall close on December 22, 2004, or such later date as the parties shall mutually agree to in writing, but not later than the Outside Closing Date. If the extension of the Closing Date as described above extends the Closing Date beyond the Outside Closing Date, Seller may, at it option, by notice to Buyer and to Escrow Holder, terminate this Agreement. In the event of termination for such reason, neither party shall be in default hereunder, the Deposit shall be immediately returned to the Buyer, and neither party shall have any further obligation or liability to the other. If Buyer has disapproved the condition of the Property during the Contingency Period for a reason related to the existence of Hazardous Substances, and Seller has provided to Buyer a Due Diligence Report and Closure Report, each in form and substance reasonably acceptable to the City Health Department, by December 1, 2004, such that the City Health Department is able, in its sole and absolute judgment, to determine that the nature, scope, source, and type of contamination, and potential cost of any remediation that may be required to obtain the Certificate of Closure or for Buyer to approve the purchase of the Property, are considered by the City Health Department, in its sole and absolute discretion, to be minor and of an acceptable level of risk for the Buyer, then Buyer agrees that it will waive its disapproval of the contingency related to Hazardous Substances and will close Escrow prior to the Outside Closing Date, on the following conditions: (a) There will be held back in Escrow an amount reasonably determined by the City Health Department to be required to pay for any remediation that the City Health Department has determined to be necessary in connection with the Buyer's purchase of the Property, but only to the extent required to obtain the Certificate of Closure (the "Remediation Holdback Funds"). (b) Seller shall agree, in writing at the Close of Escrow (the "Remediation Agreement"), to proceed diligently with any such remediation required to obtain the Certificate of Closure (the "Remediation"). The Remediation Agreement shall be in form and substance satisfactory to Buyer and Seller, and, among other things, shall state that (i) Seller shall ensure that all Remediation is conducted in a safe, prudent manner, in accordance with industry standards and in accordance with all applicable laws, including, without limitation, laws regulating the handling, transfer, storage, and disposal of all Hazardous Substances; (ii) that Seller shall retain a contractor acceptable to Buyer to perform the Remediation; (iii) that Buyer shall have the right to approve the contract and scope of work for the Remediation, and the timing for the completion of the Remediation; and (iv) that Seller shall indemnify, defend, and hold harmless Buyer, its employees, elected officials, staff, agents, and representatives, from and against all claims, causes of action, obligations, liabilities, costs, and expenses (including, without limitation, reasonable attorneys' fees and costs) arising out of or related to the continuing existence of the Hazardous Substance on the Property from the Closing through the completion of the Remediation (including, without limitation, claim related to injury, illness or death or damage to Property); the entry onto the Property for the Remediation, and any costs arising out of the Remediation (including, without limitation, costs of removal, transfer, storage, or disposal of the Hazardous Substance). (c) Upon Escrow Holder's receipt of the Certificate of Closure, the Remediation Holdback Funds shall be immediately released to Seller. (d) If Seller fails to diligently pursue the Remediation, after not less than 5 days' prior written notice from the City Health Department (during which time period Seller can cure the failure by taking all necessary actions to diligently pursue the Remediation), then Buyer shall have the right, but not the obligation, to undertake the required Remediation, and the cost of such Remediation shall be paid to Buyer out of the Remediation Holdback Funds, 01910/0014 110122.2 5 c:VW0rtb1\1ad0c5\summM110122 2.doc with any remaining amounts left in the Remediation Holdback Funds being distributed to Seller promptly after completion of the Remediation. (e) Seller will be responsible for any costs of completing the Remediation which exceed the Remediation Holdback Funds. 21.10 Holdback Funds: With respect to the provisions of this Addendum regarding the holding and disbursement by Escrow Holder of the Equipment Holdback Funds and the Remediation Holdback Funds (collectively, the "Holdback Funds") the following provisions shall apply, notwithstanding any other provisions herein to the contrary. The parties acknowledge that, for purposes of this Paragraph, business days shall mean only Monday through Thursday, and shall exclude December 23, 2004 through January 5, 2005. (1) All Holdback Funds shall be held in an interest -bearing demand deposit account, with interest accruing to the benefit of Seller. Seller shall provide Escrow Holder with a form W-9. (2) Upon receipt of a written demand from either Seller or Buyer for disbursement of Holdback Funds, Escrow Holder shall immediately deliver a copy of such demand (along with any supporting documentation provided with such demand) to the other party. Unless Escrow Holder receives a written objection from the other party within fifteen (15) business days after such copies have been sent, then Escrow Holder shall make the disbursement as requested. All notices to be given by and to Escrow Holder shall be by personal delivery or by Federal Express or other reputable overnight delivery service. (3) If Escrow Holder receives written objection to any requested disbursement of Holdback Funds within such fifteen (15) business day period, then it shall not make any disbursement until either receipt of joint written instructions from Seller and Buyer, or receipt of a court order or an award by an arbitrator. If Escrow Holder does not receive written objection to any requested disbursement of Holdback Funds within such fifteen (15) business day period, it shall make the requested disbursement. (4) All costs of the escrow shall be borne by Seller, including the cost of all notices given by Escrow Holder. Escrow Holder may deduct such costs from the Holdback Funds. (5) If a dispute arises between Seller and Buyer with respect to any distribution of Holdback Funds, which dispute cannot be resolved within ten (10) days by mutual agreement, then either parry may elect to have the dispute resolved by arbitration in Los Angeles County, California,.in accordance with the Commercial Arbitration Rules of the American Arbitration Association. Judgment upon the award rendered by the arbitrator may be entered in any court of competent jurisdiction. The cost of the arbitration shall be paid by the losing party, or if there is no clear losing party, as the arbitrator shall determine. In any such arbitration proceedings, the parties shall have the right to obtain discovery pursuant to CCP § 1283.05, but depositions may only be taken with the consent of the arbitrator. Service of any petition to confirm or vacate the arbitration award and notice of hearing thereon may be made by certified mail, return -receipt requested, or by personal delivery. The arbitrator's award may be limited to a statement as to whether any requested disbursement of Holdback Funds should be made, or to what extent it should be made, and an award of attorneys' fees, if applicable. The decision of the 01910/0014 110122.2 6 c:baponb1 adocsl9aaa A110122_2.doc arbitrator shall be final and binding and unreviewable for error of law or legal reasoning of any kind. The parties will use best efforts to consummate any such arbitration within sixty (60) days after the date of demand for arbitration. Executed as of the date first above written Seller: Saint-Gobain Containers, Inc. By: LTeW42 ame: Vic P✓QScc�P-.� �eri�a �i -trb..�4to; itle:(?Ag( T.Wat�+e,c By: Name: ; Title: Buyer: City Of Vernon By' Na Leonis C. Malburg, Mayor ATTEST: �..----`""'`�� Bruce V. Malkenhorst, City Clerk APPROVED AS TO FORM Eric T. Fresch, City Attorney 01910/0014 110122.2 7 c:Vup0nb1V2das�swomM110122 2.doc SUPPORTING DOCUMENTS �gs9� 520 North Brand Boulevard Glendale, CA, 91203 PHONE: (818)240-4912 * Fax: (818)551-5361 AMENDED AND/OR SUPPLEMENTED ESCROW INSTRUCTIONS January 11, 2005 Escrow No: 222027-TD RE: 4855 E. 52ND PLACE VERNON, CALIFORNIA TO: North American Title Company My previous instructions in the above numbered escrow are hereby amended and/or supplemented in the following particulars only: 1. The Outside Closing Date as referenced in the original Agreement dated Nov. 3, 2004, is hereby amended to be on or before January 28, 2005. 2. The Contingency expiration date as referenced in Paragraph La. of the original escrow instructions dated December 4, 2004, is hereby amended to be January 21, 2005, 5:00 PM. *****ALL OTHER TERMS AND CONDITIONS SHALL REMAIN THE SAME.***** EACH OF THE UNDERSIGNED STATES THAT HE/SHE HAS READ THE FOREGOING INSTRUCTIONS AND UNDERSTANDS THEM AND DOES HEREBY ACKNOWLEDGE RECEIPT OF A COPY OF THESE INSTRUCTIONS. EACH OF THE UNDERSIGNED UNDERSTANDS THESE INSTRUCTIONS MAY BE EXECUTED IN COUNTERPARTS, ALL OF WHICH WHEN TAKEN TOGETHER SHALL BE DEEMED TO BE THE INSTRUMENT. SELLERS: SAINT-GOBAIN CONTAINERS, INC. I: DAVID W. KNIGHT, ASST. SECRETARY BUYERS: CITY OF VERNON By: BRUCE V. MALKENHORST, CITY CLERK By: ERIC T. FRESC , CITY ATTORNEY aaaa I AIR COMMERCIAL REAL ESTATE ASSOCIATION PROPERTY INFORMATION SHEET (Non -Residential) PREFACE: Purpose: This Statement is NOT a warranty as to the actual caMilion of the Property Premises. The purpose is, instead, to provide the lvakersand the polenlial buyer/leseee wilh important information about the Propeny/Premises which is currently in the actual knowledge of the Owner and which the Owner is required by law to disclose. TO WHOM IT MY CONCERN. SAINT-GOBAIN CONTAINERS, INC. ("Owner"), owns the Prapenygaramises commonly known by the almN address of 4855 East 52nd Place located in the Clry of Vernon County of, Los Angeles , State of Cali fornia and generally described as (describe briefly the native of the premises or properly)approximately 10.6 acres of industrial land and improvements, APN: 6314-022-008; 6314-019-009; 6314-020-011; 6314-020-003 (herein after -Property"), and cenlges that: 1. Matena4PbyMaa40efa0 rawea Meaventinela9iag, Ballot neexeeplion- ease '0190fl') liaaipmentf .:Rs, hr a-no-ecWeFknewded§aNwHBekeaOn@yronMaWg�ksendiNeniug-pWmGng;Jeaeinl}dwrs; ebsBka12r141ighNng-syNem&,Jdesafety Watemaiesarily systems-and-moGhnlaalayaipman$ existing-aWBe-Pwpeny as#Jhe- dale -herol;-ManyraaB-net in gees-eperalvgertlerandsandiNen; senselig-t W) — 0 affeFfle. A.-aatYal-1411BWIed9a-afany -leacew.-gnan Bola-etleagngyrlybgoipasin�bsnkxg exempt if !hem are no exupfiens aw is 11006l 3. Soil Conditions. Owner has no actual knowledge that the Property has any slipping, sliding, sel8trg, flooding, parading or any other grading. drainage or soil problems, except (If there are no exceptions write -NONE'): 4. Utllitiee. Owner represents and warrants that the Property is carved by the following utilities (check the appropriate boxes) 0 public sewer system and the cost of installation thereof has been fully paid 0 private septic system, 0 electridly, 0 natural gas, 11 domestic water, 0 telephone, and 0 other. 5. Natural Huard Zone. Owner has no actual knowledge coal the Properly Is located within a delineated good, earthquake, or other natural hazard zone,except(fllhreamnoexceptionswdle'NONE"): as set forth in the Seller's Mandatory Disclosure Statement (AIR For. SMD-1-8/OOE) 6. Compliancewith taws. Owner has no actual knowledge of any aspect or condition of she Properly (excluding any Stmctureei thereon) which violates applicable laws, rules, regulations, codes, or covenants, conditions or mstdctlons-ar-efunprovementsar-allerstian adG4"he-Propeny withaasa-permgwheresno-was Is mesa, or of any unfulfilled order or directive of any applicable government agency es efanycasaaky+ncwancecompany that any work of investigation; or remediation, reeak-e'IH^tenance-er-knPres'enrera is to be performed on the Property (excluding any Structures thereon), except (if there are no exceptions write "NONE"): Page t of d ©]ago - AIR Commerclal Real Estate Association REVISED FORM PIJ-000E T. Hazardous Substances. A. Owner has no actual knowledge of the Property ever having been used as a waste dump, of the past (during She period Of Owner r Ownership) or present existence of any above or below ground storage tanks on the Property, or of the current existence an the Property of asbestos, transformers containing PCBs, or any Hazardous, loxic or infectious Substance whose nature andlor quantity of existence, use, manufacture or effect, render a subject to Federal, state or local regulation, investigation, remedialion or removal as potentially injurious to public health or "Kam. except (I( there are no exceptions wrila'NONE-): as set forth in the Phase I environmental report dated 2004 and in the Phase II environmental report dated 2009 prepared by URS S. Owner represents and warrants that 0 is not currently. and never has been engaged in IM business of hauling waste,-and-naves-alarad hazard", none' xis an41m4iwpenyr except (IF there are no exceptions wrile "NONE'): a. Fue-0amaa are-eq yar-eaeeaF{iNMIe-are-ne eaaaatunarrtitaJJONE!). 9. Actions, Suite or Proceedings. Owner has no actual knowledge that any actions, suits or proceedings are pending or threatened before any coon, arbitration Inbunal, governmental department, commission, board, bureau, agency or instrumentality that would affect the Property or the right or ability of an owner or tenant to convey, occupy or utilize the Property, except (if there are no exceptions wme'NONE': 10. Governmental Proceedings. Owner has no actual knowledge of any existing or contemplated condemnation, environmental, zoning, redevelopment agency plan or other land use regulation proceedings which could detrimentally affect the value, use and operation of the Properly, except (i them are no exceptions "is NONE'): 11. Unrecorded Title Matters. Owner has no actual knowledge of any encumbrances, covenants, conditions, restrictions, easements, licenses, liens, charges or other matters which affect the Idle of the Property that are not recorded in the official records of the county recorder where the Property is located. except (if thew are no exceptions write "NONE'): 12. Leases. Owner has no actual knowledge of any leases, subleases or other tenancy agreements affecting the Property. except (if there are no exceptions write 'NONE): 13. Options. Owner has no actual knowledge of any options to Purchase, rgMs o1 ersl refusal, rights of 0rs1 offer or other similar agreements affecting the Property, except (if there are no exceptions write "NONE'): 19. Otherf-Hl-wie§e are samedJbeHhera ens ne atl0igaaaNMme�sWlah-wanenFANHesweunlessMeyaw se4lenM1inMuRf Page 2 of 3 02000- AIR Commercial Real Estate Association REVISED FORM PI-32100E The statements herein will be relied upon by Buy6rb SkxwS-buyers-leaseaarkreare and a1h.ra. Therefore. Owner e,u"h'0w"'—preWy Manager -has reviewed and modified this printed statement as necessary to accurately and completely stale all the known material facts concerning the Property. To the extent such modlficalions are not made, this statement may be relied upon as printed. This statement, however, shall not relieve a buyer or lessee of responsibility for independent Investigation of the Property. Owner agrees to promptly notify, in writing, all appropriate parties of any material changes which may occur in the statements contained herein from the date this statement is Signed until line to the Property is Iransferred,-SF the -lease -is exeaukd. Dale: /�/� 3a ,20� 'OWNER' (Fill in date of execution) SAINT-GO�BrA�IN CONTAINERS, INC. By' Ve Name Prin Title'. Buyer0essee hereby acknowledges receipt of a copy of this Propery, Information Sheet on FebnBt By: all ✓✓i llama Rmce V. HalkeRhorst Tige: City Administrator/City Clerk NOTICE: These forms are often modified to meet changing requirements of law and industry needs. Always write or call to make sure you are utilizing the most currenl to. AIR Commercial Real Estate Assogiation, 700 South Flower Street, Suite 600, Los Angeles. CA 90017, Telephone No, (213) 667-6777 Fax No.: (213) 667-6616. Page 3 of 3 020GO- AIR Commercial Real Estate Association REVISED FORM PI4-6100E CITY COUNCIL LBONIS C. MALBURG May" THOMAS A. YBARRA Maym Pro-Tem WM. "BILL" DAVIS Councilnan H.-LARRY" GONZALES Councilman W. MICHAEL McOORMICK Councilman BRUCEV MALKENHORST City Admirdst,ator/City Clark Chief Fxeavtive Oaicer of Light & Power ERIC T. FRESCH CityAttorney 170 JOHN KARNS Karns & Karabian Ce w Caned KEVIN WILSON Di,ertm of Community Services & Water STEVEN E. PARKER Fire Chief SOL BENUDIZ Pole Chief LEWIS J. POZZEBON Dimdm of Envnv nlar.W Health CITY HALL RORY BLTRNEIT 4305 SANTA PE AVENUE, VERNON, CALIFORNIA 90058 Gurary, Sdmeider & Co. LLP TELEPHONE (323) 583-0811 City Acmunta,t ENVIRONMENTAL HEALTH DEPARTMENT February 17, 2005 JeffForgang Saint-Gobain Containers 1509 Macedonia Avenue Muncie, ID 47302 SUBJECT: Soil Removal Action Work Plan for Hazardous Materials Establishment Closure; Saint-Gobain Containers, 4855 E. 52nd PL, Vemon 90040 Dear Mr. Forgang: Our department reviewed the subject work plan prepared by URS dated February 15, 2005. We are satisfied that the plan includes procedures to address the identified contaminated areas and potential areas that may be discovered during demolition activities at the Saint-Gobain facility. This letter formally approves the plan's implementation in conjunction with a separate demolition work plan. Please provide our department with at least 72 hours advance notice of contaminated soil removal and confirmation sampling activities. We look forward to reviewing the final documentation of demolition and remediation activities at the conclusion of the project. Thank you for your cooperation and the excellent work completed to date by URS. Please call me at (323)583-8811 ext. 229, if you have any questions or comments. /, Lewis J. Po Director/Health cer Xc: Kevin Wilson, City of Vemon Community Services and Water Department URS Corporation, Linda Conlan, RG, 2020 Fast Fast Street, Suite 400, Santa Ana, CA 92705 IplmydonLamtl/S1 Dobeie ramadieYm plan appo W "Exclusively Industrial" CRY COUNCIL LEONIS C. MALBURG Mayor THOMAS A. YBARRA Mayor Pro-Tem WM."BILL" DAVIS Councilman H."LARRY"GONZALES W. MICHAEL McCORMICK Councilman BRUCE V. MALKENHORST City Admirdstrati r/City Clerk Chid Executive Officer of Light & Power ERIC T. FRESCH City Attorney JOHN KARNS K. & Karabian General Cowisel KEVIN WILSON Director of Commmdty Services & Water STEVEN E. PARKER Fire Chief SOL BENUDIZ Police Chief LEWIS J. POZZEBON DlreCtor of Envim,m,ental Health RORY BURNER Guney, Schneider & Co. LLP City Acawntam February 3, 2005 ( R U J L( Hand Delivered ,\1"' Ms. Tina De Bow, Escrow Officer �\ n `0� q North American Title Company 520 N. Brand Blvd. Glendale, CA 91203Re: Escrow Escrow No. 222027-TD Ill/Vfro Seller: Saint-Gobain Containers, Inc. ' ■ Buyer: City of Vernon L Property: 4855 E. 52nd Place, Vernon, California Dear Ms. De Bow: CITY HALL 4305 SANTA FE AVENUE, VERNON, CALIFORNIA 9OD58 TELEPHONE (323) 583-811 Pursuant to your letter of January 31, 2005, enclosed please find the signed Property Information Sheet dated November 30, 2004, Seller's Mandatory Disclosure Statement dated November 30, 2004 and four JCP Reports dated November 16, 2004, with respect to the above -referenced escrow. If you have any questions respecting this matter, please do not hesitate to contact me. Very �///truly yours, Wi11ard1G. Y chi Chief Deputy t��orney jl Enclosures cc: Bruce V. Malkenhorst, "ty Administrator/City Clerk "Exclusively Industrial" 3JR C(TY COUNCIL LEONIS C. MALBURG Mayor THOMAS A. YBARRA Mayor Pro-Tem WM. "BILL" DAVIS Coundlmaa H.-LARRY" GONZALES Coundlman W. MICHAEL McCORMICK Coundlman BRUCE V. MALKENHORST City Administrator/City Clerk Chief Executive Offioer of Light & Power ERIC T. FRESCH City Attorney Hand Delivered CITY HALL 4305 SANTA FE AVENUE, VERNON, CALIFORNIA 90058 TELEPHONE (323) 583-g811 March 10, 2005 JOHN KARNS Karns & Karabian General Counsel KEVIN WI SON Director of Conarurdty Sery &Water STEVEN E. PARKER Fire Chief SOL BENUDIZ Poem Chief LEWIS J. POZZEBON Director of Envuorunental Health RORYBURNEI7 Gursry, Srhnoder & Co. LLP City Accountant Ms. Tina De Bow, Escrow Officer �'�� North American Title Company 520 N. Brand Blvd. Glendale, CA 91203 Re: Escrow No. 222027-TD Seller: Saint-Gobain Containers, Inc. Buyer: City of Vernon Property: 4855 E. 52"d Place, Vernon, California Dear Ms. De Bow: Enclosed please find the signed Buyer's Closing Statement (estimated), Preliminary Change of Ownership Report, Amended and/or Supplemented Escrow Instructions dated January 6, 2005, Amended and/or Supplemented Escrow Instructions dated January 18, 2005, and three signed First Amendment to Standard Offer, Agreement and Escrow Instructions for Purchase of Real Property and Remediation Agreement with respect to the above -referenced escrow. If you have any questions respecting this matter, please do not hesitate to contact me. Ve trufl/yy yours, Willard"G. chi Chief Deput y Attorney , jl Enclosures cc: Bruce V. Malkenhorst, Cj, ydmin's rafor/,C'j:y Clerk Pxc[usive�y 5naustrla� sai1l North American Title Company 520 North Brand Boulevard Glendale, CA 91203 _ (818) 2404912 Buyer Closing Statement Estimated OF VERNON, A BODY CORPORATE AND POLITIC Fscrm NO: Escrow Buyer CITY Escrow Branch: Glendale Escrow Officer: TINA DE BOW Preparer: TINA DE BOW Date Prepared: 3/91200510A7:44 AM Estimated Close: 3111I2005 I Property: 4855 E. 52ND PLACE VERNON1, CA 90040 DebO credit 11 PescrlPtlon Total Consideration $11,500 000.00 Total Consideration $250.ODO.00 DeposUEamest Money Prorations and Adjustments $8,041.38 URS reimb Inv.1445389 $1,000.00 padding refund excess to buyer Additional Charges $3,808A4 URS borings expense to URS i Title Charges est. endorsements to NORTH AMERICAN TRLE $5,000.00 $1 725 00 Upgrade to Abe Owners to NORTH AMERICAN TITLE $1,725.00 Inspection fee b NORTH AMERICAN TITLE Escrow Charges Settlement Fee to NORTH AMERICAN TITLE ESCROW $3,860.00 $11.624.224.52 $250,000.00 Sub Totals $11,274,224.52 Funds Due From Buyer $11,524,224.52 $11,524,224.52 Totals Buyers/Borro Read and APproved: and and agree that this is an estimatea 501-11 . items shown are subject to change at closing. TAR EXEMPT ENTITY BOE.Se2A (FRONT) REV.4(S02) PRELIMINARY CHANGE OF OWNERSHIP REPORT ITO be completed by transferee (buyer) poor to transfer of sub)ed property In accordance with Section 480.3 of the Revenue and Taxation Code.] A Prelbnhary Change of OwneMlp Report must be Hued with each conveyance In the County Recorders duce far aw county where the property Is located: this particular form may be used in all M counties d Cellfomla. THIS REPORT IS NOT A PUBLIC DOCUMENT FOR RECOGUM S USE ONLY SEU.ERrtRANSFEROR: Saint-Gobain Containers, Inc. BUYER/IRANSFERE E: CITY OF VERNON ASSESSORS PARCEL NUMBER(S): 6314-022-008, 6314-019-009, 6314-020-003, 6314-020-011 PROPERTY ADDRESS OR LOCATION: 066 E. 52ND PUCE, VERNON. CALIFORNIA MAIL TAX INFORMATION TO: Name Address NOTICE: A Ilan for property taxes applies to your pro June 30. One -hall of these taxes Is du following fiscal year, installment becomes July 1 through / ] before November 1 delinquent an December 10, and the second installm be responsible for to the owner of record. N this transfer occurs aft y, second ins illmani of taxes due February 1. /4 be / N� �ys� :emnined by the LOS The property which you acquired may subject \ I the LOS ANGELES ANGELES County Tax Assessor. For further infon County Tax Assessor. PART I: TRANSFER It IQ 7 s r h O Yes No ❑ ❑ A. Is this transfer solely between husban r(f settlement, a name, me a ❑ ❑ B. Is this transaction Dory a correction of r (tor example, a charge upon e ❑ ❑ C. Is this documentnt recorded tocreate, to U" Tninate, or reconvey a ❑ ❑ D. Is this transaction recorded only as e security interest (e.g., cosigner)? ❑ ❑ E. Is this document recorded to Substitute filar document? ❑ a F. Did this transfer result in the creation sins as one of the Joint tenants? �J' V 1 mr)4 ❑ ❑ G. Does this transfer return property to the ,.- ❑ a H. Is this transfer of properly. 1. to a trust for the benefit of the ❑ Grantor ❑ Grantor's spouse? 2. toa WstrevocablebythetmnsferoY! 3. to a trust from which the property reverts to the grantor within 12 years? ❑ ❑ 1. If this property is subject to a lease, is the remaining lease term 35 years or more including written options? ❑ ❑ J. Is this a transfer between ❑ parent(s) and child(ren)? ❑ or from grandparom(s) to grendchild(ren)? ❑ ❑ K Is this transaction to roplace a principal residence by a person 55 years of age or older? Within the Same county? ❑ Yes ❑ No ❑ ❑ L. Is this transaction to replace a principal residence by a person who is severely disabled as defined by Revenue and Taxation Code Section 69.5? Within the some county? ❑ Yes ❑ No 'If you checked yes to J. K or 1., you may qualify for a property tax reassessment exclusion, which may result in lower, taxes on your property. If you do not file a claim, your property will be reassessed. Please provide any other information that would help the Assessor to understand the nature of the transfer. If the conveying document constitutes an exclusion from a change In ownership as defined in section 62 of the Revenue and taxation Code for any reason other than those fisted above, set forth the specilk exclusions claimed: please II guestions in eact, section. fire sseb0c does nor aIxNY Indicate wiM'WA7 Sign and date at boUom ofsecondoaas. PART II: OTHER TRANSFER INFORMATION A Date of transfer If other Men recording date S. Type of transfer (please check appropriate box): ❑ Purchase ❑ Foreclosure ❑ Gift a Trade or Exchange ❑ Merger, Stock, or Partnership Acquisition ❑ Contract of Sale — Dale of Contract Other (please explain); ❑ Inheritance — Dale of Death ❑ Creation of a Lease ❑ Assignment of a Lease ❑ Termination of a Lease ❑ Sale/Leaseback ❑ Date lease began ❑ Original term In years (Including written options) ❑ Remaining term in years (including written options) Monthly Payment Remaining Term . . _ _ — su, u..e. l..aharo inw nw .base tmmsfared % BQES024 (HACK) REVA(102) B. FIRSTDEED OF TRUST%interest for _years. PymkJMo.S_(Pd^•& Ira.only) Amount Discount FHA (_ DLsunl Points) v Fixed rate o New ben v Conventional o VeriadBrate a Assumed savings g ben baance v VA( DBcourt Pdnls) v All inc and a D.T. ($_ Wreppetl) o Beak or ce Compa y ban o Cal -Vet g Loan carded by seller v Firxarice Company Balloon Payment o Yes v No Due Date Amount $ C. SECOND DEED OF TRUST %Ina reat for_ years. pymil (Prin. & Int. only) Amount $ v Bank or savings & loan v Fixed rate v New ben p Loan carded by seller o Variable rate o Assumed existing ban balance Balloon Payment v Yes v No Due Data Amount E D. OTHER FINANCING: Is other financing involved not covered In (b) or (c) above? v Yes o No Amount $ Type G %Interest for _ years. pymtsJMo.=3 (Pdn. S lnt only) v Bank or savings 8 ban v Fixed rate v New ban o Loan canned by seller v variable rate v Assumed eisting ben balance Balloon Payment v Yes v No Due Data Amount $ E_ WAS AN IMPROVEMENT BOND ASSUMED BY THE BUYER? v Yea v No Outstanding Balance: Amount $ F. TOTAL PURCHASE PRICE (oracquisNbn price, if traded or exchanged include real estate commission lipoid) TOTAL ITEMS A THROUGH E G. PROPERTY PURCHASED v Through a broker v Direct from Seller o From a family member o Other (Please explain): B purchased through a broker, provide bmkWs name and phone number: Please explain any special tennis, solar concesslons, or dancing and any other infommation that would help It. Assessor wderatand n me yr r=.�„ ........ ....��. v Single-familamll y residence v Agrictiltural o Timeshare o Coma a-famny residence (no. of units' o Gondominn-yourown o Manufactured Home v Commerdal/IntlusMal o Condominium v Unimproved lot ) o Other (Description: i.e., limber, mineral, water rights, etc. B. IS THIS PROPERTY INTENDED AS YOUR PRINCIPAL RESIDENCE? o Yes o No If yes, enter the date of occupancy 1— 20_ or intended occupancy (_. 20_ (month) (day) (year) (month) (day) (Year) C. IS PERSONAL PROPERTY INCLUDED IN THE PURCHASE PRICE? (Le., furniture, farm equipment, machinery. etc.) (other than a manufactured home sub)ect to local property tax?) o Yes o No ach eeldzee list al Personal If yes, enter the value of the personal property included in the purchase price i � Property.) D. IS A MANUFACTURED HOME INCLUDED IN PURCHASE PRICE? o Yes o No If yes. how much of the purchase price Is allocated to the manufactured home? S Is the manufactured home subleo to local pmPedy tale? v Yes v No What is the decal numbe(y E. DOES THE PROPERTY PRODUCE INCOME? v Yes v No If yes, Is the income from: o LeaselRent v Contract D Mineral rights o Other (please explain): F. WHAT WAS THE CONDITION OF THE PROPERTY AT THE TIME OF SALE? o Good v Average v Fair m Poor Please explain the physical condition of the property and provide any other information (such as resuictl0m, etc.) that would assist the Assessor in determining the value of the properly. v I C"lly that me foregoing is aue, correct and complains fe are beat allay knowledge and belief. o This dec/are0on is binding on each and every co-owner amgor Partner. Clerk iow: ine rw — ...ar._.....---- ._. -ownersh_ t Me rapport the rsm er may charge ears dditional ramming ee o twaltY dollars (S20g.) d a areankwr 520 North Brand Boulevard Glendale, CA, 91203 ev PHONE:(818)240-4912 • FAX:(818)551-53616 AMENDED AND/OR SUPPLEMENTED ESCROW INSTRUCTIONS January 6, 2005 Escrow No: 222027-TD RE: 4855 E. 52ND PLACE VERNON, CALIFORNIA TO: North American Title Company My previous instructions in the above numbered escrow are hereby amended and/or supplemented in the following particulars only: 1. The Outside posing Date as referenced in the original Agreement dated NOV. 3, 2004, Is hereby amended to be on or before January 21, 2005. 2. The Contingency expiration date as referenced in Paragraph 1.a: of the original escrow Instructions dated December 4, 20G4, is hereby amended to be January 14, 2005, 5:01) PM. *****ALL OTHER TERMS AND CONDITIONS SHALL REMAIN THE SAME.***** EACH OF THE UNDERSIGNED STATES THAT HE/SHE HAS READ THE FOREGOING INSTRUCTIONS AND UNDERSTANDS THEM AND DOES HEREBY ACKNOWLEDGE RECENT OF A COPY OF THESE INSTRUCTIONS. EACH OF THE UNDERSIGNED UNDERSTANDS THESE INSTRUCTIONS MAY BE EXECUTED IN COUNTERPARTS, ALL OF WHICH WHEN TAKEN TOGETHER SHALL BEDEEMED TO BE THE INSTRUMENT. SEL ERS' BUY13RS: SAINT�O V CITY OF VBRNON DAVIDW.KNIGHT.ASST BCRBTARYiY ,$race V. Halkenhorst, City Administrator APPRO (BD AS TO FORM: By: . rat Willard G. Y chi, hief Deputy City Attorney BRUCB V. MAL MNHORST, CrTY CLERIC 520 North Brand Boulevard Glendale, CA, 91203 PHOND:(818)240-4912 * FAx:(818)551-5361 AMENDED AND/OR SUPPLEMENTED _ ESCROW INSTRUCTIONS January 18, 2005 Escrow No: 222027-TD RE: 4855 E. 52ND PLACE VERNON, CALIFORNIA TO: North American Title Company My previous instructions In the above numbered escrow are hereby amended and/or supplemented in the following particulars only: 1. The Outside Closing Date as referenced in the original Agreement dated Nov. 23, 2004, is hereby amended to be on or before February 18, 2005. 2. The Contingency expiration date as referenced in Paragraph l.a. of the original escrow, Instructions dated December 4, 2DD4, is hereby amended to be February 4, 2005, 5:00 PM. 3. Any references made in any prior amendments referencing the original Agreement dated Nov. 3, 2004 Is amended and corrected to reflect the original Agreement dated Nov. 23, 20D4. *****ALL OTHER TERMS AND CONDITIONS SHALL REMAIN THE SAME.***** EACH OF THE UNDERSIGNED STATES THAT BE/SHE HAS READ THE FOREGOING INSTRUCTIONS AND UNDERSTANDS THEM AND DOES HEREBY ACKNOWLEDGE RECEIPT OF A COPY OF THESE INSTRUCTIONS. EACH OF THE UNDERSIGNED UNDERSTANDS THESE INSTRUCTIONS MAY BE EXECUTED IN COUNTERPARTS, ALL OF WHICH WHEN TAKEN TOGETHER SHALL BE DEEMED TO BE THE INSTRUMENT. SAINT'- AIN CONTAINERS, INC., a CITY OF VERNON, a body corporate and politic Delaware oration ji Br By. Bruce V. MaO:whotat _ D VID W. IINIGHT, ASS . ECRETARY Its: Administrator/City Clerk APPROVED AS TO FORM: - By: � iad rd GYF Yamaguchi Its: f Deputy City Attorney First Amendment to Standard Offer, Agreement and Escrow Instructions for Purchase of Real Property and Remediation Agreement This First Amendment to Standard Offer, Agreement and Escrow Instructions for Purchase of Real Property and Remediation Agreement (this "Amendment') is made as of March 9, 2005 by and between The City of Vernon (`Buyer") and Saint-Gobain Containers, Inc. ("Seller") in order to amend certain terms of the Standard Offer, Agreement and Escrow Instructions dated as of November 3, 2004 by and between the Buyer and Seller and the Addendum thereto dated November 3, 2004 (collectively, the "Agreement") covering that certain real property commonly described as 4855 E. 5206 Place, Vernon, California 90040 (the "Property'). Each initially capitalized tens used in this Amendment without definition shall have the definition ascribed to such term in the Agreement. For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows: 1. Purchase Price. The Purchase Price is hereby increased by the amount of $500,000.00, so that the Purchase Price is $11,500,000.00. 2. Demolition and Remediation Oblations. After the Closing, Seller, at Seller's sole cost and expense, shall perform the Demolition Work and the Remediation Work described below. Collectively, the Demolition Work and the Remediation Work are referred to as `Seller's Work". Upon execution of this Amendment and receipt of the certificate of insurance described in Paragraph 5, Buyer shall grant to Seller and Seller's contractors a revocable license to enter onto the Property in order to perform Seller's Work. 2.1 Demolition Work. A description of Seller's Demolition Work is set forth in the General Work Plan for Demolition of Plant Buildings, Foundations, Utilities, Concrete and Asphalt; Saint-Gobain Maywood Facility (the "Demolition Work Plan"). Any changes to the agreed upon contractor and Demolition Work Plan shall be subject to approval by Buyer and the City of Vernon's Department of Community Services (the "Community Services Department'), which approval shall not be unreasonably withheld. The Demolition Work shall be deemed complete when the Community Services Department has, in its reasonable judgment, approved the completion of the Demolition Work. 2.2 Remediation Work. Seller's Remediation Work and the name of the contractor who will be retained by Seller to perform the Remediation Work, as well as the time frame for completion of the Remediation Work, are set forth in the Soil Removal Action Work Plan prepared by URS dated February 15, 2005 (the `Remediation Work Plan'). Any changes to the agreed upon contractor and Remediation Work Plan shall be subject to approval by Buyer and the City of Vernon's Health Department (the "Health Department'), which approval shall not be unreasonably withheld. Issuance of the Certificate of Closure by the Health Department shall serve as evidence of completion of the Remediation Work. 0191WC014112292.6 3. Performance of Seller's Work. 3.1 Performance Standards for All of Seller's Work. Seller shall ensure that all of Seller's Work is conducted in a safe, prudent manner, in accordance with industry standards and in accordance with all applicable laws, including, without limitation, laws regulating the handling, transfer, storage, and disposal of all Hazardous Substances. Seller shall pay for all Seller's Work in accordance with the contracts between the Seller and the contractor, and shall ensure that all contractors and subcontractors are paid in full. Seller shall obtain all permits required to perform Seller's Work. 3.2 Performance Standards for Remediation Work. In addition to the standards set forth above, which shall apply to all of Seller's Work, the Remediation Work shall be performed by contractors competent and knowledgeable in removing and transporting Hazardous Substances. For purposes of applicable law, Seller shall be named as the responsible party on all manifests, licenses, and documents regarding the storage, release, and transfer of Hazardous Substances, and shall be listed on all disposal manifests as the responsible party. 4. Completion of Seller's Work. Seller shall use best efforts to cause the Seller's Work to be completed by September 9, 2005, subject to events which are beyond the Seller's control; provided, however, that failure to pay money shall not be an excuse for delay. Seller shall be excused from performance for the number of days of delay cause by events beyond Seller's control, and shall immediately thereafter commence and complete Seller's Work. Seller's Work shall not be deemed complete until Seller has delivered to Buyer full and complete lien releases from all contractors and subcontractors performing the Seller's Work. 5. Insurance. Prior to entering upon the Property after the Closing, Seller shall (i) procure, pay for and keep in full force and effect until the completion of Seller's Work, an occurrence form commercial general liability policy with respect to the Property and the activities of Seller, its agents, employees, contractors and consultants relating to the Property in which the limits with respect to personal injury or death and property damage shall not be less than Two Million Dollars ($2,000,000) per occurrence, (ii) procure, pay for and keep in full force and effect until the completion of Seller's Work, or require Seller's contractors to procure, pay for and keep in full force and effect until the completion of Seller's Work, an occurrence form pollution liability insurance policy with respect to the Property and the activities of Seller, its consultants, agents, employees, contractors and subcontractors, relating to the Property in which the limits shall not be less than Two Million Dollars ($2,000,000) per occurrence, and (iii) maintain in full force and effect until the completion of Seller's Work, Workers' Compensation and Employer's Liability Insurance as required by law with a limit of liability of at least $1,000,000 each occurrence/aggregate. Each of the foregoing policies under (i) and (ii) shall name Buyer as an additional insured party. The policy described in clause (i) shall include contractual liability coverage, oral and written, operations premises liability, personal injury, independent contractors, broad form property damage, and cross-hability coverage. Buyer shall provide Seller with certificates of insurance evidencing such insurance prior to entering or allowing its contractors to enter the Property. 01910(001e 112M.6 6. Indemnity. Seller shall indemnify, defend and hold harmless Buyer, its employees, elected officials, staff, agents, and representatives, from and against all claims, causes of action, obligations, liabilities, costs, and expenses (including, without limitation, reasonable attorneys' fees and costs) arising out of or related to (a) the condition of the Property from the date of the Closing through the completion of Seller's Work (the "Work Period'), including, without limitation, the continuing existence of any Hazardous Substances on the Property during the Work Period; (b) the entry by any person onto the Property during the Work Period; (c) the demolition and removal of structures and improvements; (d) any claims arising out of the Seller's Work (including, without limitation, claims related to injury, illness, or death, damage to property, or the removal, transfer, storage, or disposal of the Hazardous Substances); and (e) claims asserted against Buyer as a result of the existence of the disposal facility at which Hazardous Substances from the Property are disposed or the disposal of the Hazardous Substances from the Property at such site; provided, however, that Seller shall not be obligated to indemnify Buyer or any other person for damages resulting from Buyer's or such other person's own gross negligence or willful misconduct. 7. Security. During the Work Period, Seller shall, at its sole cost, maintain security at the Property, including, without limitation, installing and maintaining a fence or other form of enclosure and, if appropriate in terms of conditions at the Property, retaining a security guard at the Property. During the Work Period, Seller shall have sole liability for conditions at the Property and securing the safety of persons and property, and hereby releases Buyer, and its elected officials, employees, agents, and staff from any claim for any loss, theft, damage, or injury to person or property occurring on, at, or about the Property during the Work Period except to the extent such injury is the result of the gross negligence or willful misconduct of the Buyer, its elected officials, employees, agents, or staff. 8. Holdback of Funds for Demolition and Remediation. Seller and Buyer hereby agree that the amount of $2,500,000 (the "Holdback Funds') shall be withheld from the Purchase Price and be retained in Escrow. Seller shall notify Buyer that it has completed Seller's Work in accordance with the terms set forth in this Amendment. Buyer shall approve Seller's Work and the condition of the Property following the completion of Seller's Work if the City of Vernon has issued the Certificate of Closure and Community Services has otherwise approved the condition of the Property. After Buyer has approved the completion of Seller's Work, Buyer and Seller shall send mutual instructions to the Escrow Officer to release to Seller the Holdback Funds. If the Seller's Work is not completed to the reasonable satisfaction of the Buyer (based on the issuance of the Certificate of Closure, as to the Remediation Work, and based on the approval of the Community Services Department as to the Demolition Work) by September 9, 2005, subject to events beyond Seller's control as set forth in Paragraph 4, the Buyer may, but is not obligated to, perform the remaining portion of Seller's Work, in which event the cost of the portion of the work performed by Buyer shall be disbursed to the Buyer by the Escrow Holder. The Escrow Holder shall immediately reimburse to Buyer, in accordance with receipts delivered by Buyer to Escrow Holder (with copies to Seller) the cost of any portion of the Seller's Work performed by the Buyer, including, without limitation, the cost of transportation of Hazardous Substances, the cost of the disposal facility, and other related costs. Any remaining amounts left in the Holdback Funds shall be distributed to Seller after the Seller's Work has been completed. The Holdback 01910/0014112292.6 Funds are intended as a reasonable estimate of the possible costs that could be incurred by the Buyer performing the Seller's Work, and do not in any way limit the Seller's obligation for such costs. If the Buyer's costs for performing all or any portion of the Seller's Work exceed the Holdback Funds, Seller shall promptly after receipt of invoice and evidence of costs reimburse all costs incurred by Buyer in excess of the amount of the Holdback Funds. Buyer shall also have the right to list Seller on any manifests or documents required for removal, transfer, or storage at the disposal facility as the responsible party. 9. Removal Of Oxygen Plant Equipment. The parties acknowledge that the Oxygen Plant Equipment has been removed from the Property. The provisions regarding the removal of the Oxygen Plant Equipment set forth in Paragraph 26.1 of the Addendum are hereby deleted in their entirety. 10. Correction of Paragraph Reference; Effectiveness of Agreement. The parties hereby agree that Paragraph 6.6 contains an incorrect paragraph reference, and hereby amend the first line in Paragraph 6.6 of the Pre -Printed Form to read as follows: "If this transaction is terminated for non -satisfaction and non -waiver of a Buyer's Contingency, as defined in paragraph 7,". All other terms and provisions of the Agreement shall remain in full force and effect and, except as expressly amended or modified hereby, are hereby ratified and reaffirmed. In the event of any inconsistency between the provisions of this Amendment and the provisions of the Agreement, the provisions of this Amendment shall control. 11. Counterparts and Facsimile. This Amendment may be executed in one or more counterparts, each of which shall be deemed an original but all of which taken together shall constitute one and the same instrument. The parties acknowledge the validity of signatures by facsimile; provided, however, each party shall promptly deliver to the other party and to the Escrow Holder an originally signed document. 12. Assignment of Licenses. Seller (as successor in interest to Ball -Foster Glass Container Co., L.L.C.) is the licensee under six licenses granted by Los Angeles Junction Railway Company (the "Railway Company") that provide to the licensee certain rights to cross the railway tracks located on the Property. The six licenses are identified as A-39/JM-5003; LAJ-080; LAJ-122; LAJ-123; LAJ-197; and LAJ-291 (the "Licenses'). Seller has delivered to Buyer a "comfort letter" dated March 9, 2005 signed by in the Railway Company in connection with the assignment of the Licenses to Buyer. Seller shall use its best efforts to obtain the Railway Company's signed consent to the assignments of the Licenses on terms reasonably acceptable to Buyer within 30 days following the Closing, and Seller shall sign such consents and deliver them to Buyer promptly following receipt from the Railway Company. Buyer shall not be obligated to make any payment to Seller or the Railway Company in consideration of the assignment of the Licenses. 01910M14 112292.6 Executed as of the date first above written. Seller: Saint-Gobain Containers, Inc. Name: By: Buyer. CTTY OF VERNON By: �-✓ Bruce V. Malkenhorst, City Administrator APP VED AS TO FORM vWillard chi, 'efDeputy City Attomey Receipt of and agreement to the foregoing First Amendment by Escrow Holder is acinowledged by Escrow Holder. Dated: ESCROW HOLDER North American Title Company Tina De Bow 01910e014112M-6 SELLER'S MANDATORY DISCLOSURE STATEMENT (Required by law on transactions involving non-residential properties in California) DO NOT USE THIS FORM WITH REGARD TO THE SALE OF RESIDENTIAL PROPERTIES AIR Commercial Real Estate Association This disclosure statement is Intended to be a part of the AIR 0 STANDARD OFFER. AGREEMENT AND ESCROW INSTRUCTIONS FOR PURCHASE OF REAL ESTATE (See paragraph 9.1(8) of said document) or ❑ regarding that certain real property commonly known as: 4855 East 52nd Placer Vernon,California (the "Property")wherein SAINT-G013AIN CONTAINERS INC. is the Sellef and THE CITY OF VERNON - is the Buyer. Note: This disclosure statement is not designed nor inlentletl to be used rn place of the AIR slentlard ProcertY Information Sheet. Both documents should be used in every Iransaction Involving a sale. In Oder to comply with Slate Ise concerning disclosures to a potential purchaser. Seller elects to: 0 A. Utilize a report prepared by a professional consultant which has been approved by the AIR, is, JCP Geologists (800) 748-5233. A copy of their report is attached hereto. (Complete paragraphs 8 and 9 and sign this Statement in the Plata provided.) ❑ B. Utilize a report prepared by a different consultant, is (_) A copy of their report is attached hereto. (Complete paragraphs 8 and 9, sign this Statement in the place provided, and attach a copy of The Commercial Property Owner's Guide to Earthquake Safety) ❑ C. Complete this Disclosure Statement without the assistance of a professional consultant (Complete paragraphs 1 through 11 and sign this Statement in the place provided. Remember to attach a copy of The Commercial Property Owner's Guide to Earthquake Safety.) 1. EARTHQUAKE FAULT ZONES. If the Property is located within a delineated Earthquake Fault Zane is zone that encompasses a potentially or recently active trace of an earthquake fault that is deemed by the State Geologist to constitute a potential hazard to structures from surface faulting or fault creep). California Public Resources Code §2621 at seq. mandates that prospective purchasers ber advised that the Property is located within such a Zone, and that its development may require a geologic report from a state registered geologist. In accordance with such law, Buyer is hereby informed that the Property is ❑ or is not ❑ within a delineated Earthquake Fault Zone. 2. SEISMIC HAZARD ZONES. If the Property is touted within a Seismic Hazard Zone as delineated on a map prepared by the California Division of Mines avid Geology, California Public Resources Code 52690 at seq. mandates 1ha1 prospective purchasers be advised that the Property is located within such a Zone. In accordance with such law, Buyer is hereby informed that the Property Is ❑ or is not ❑ within a Seismic Hazard Zone. 3. EARTHQUAKE SAFETY. If (1) the improvements on the Property were consimded prior to 1975. and (2) said improvements include structures with (i) pre -card (e.g., Itfl-up) concrete or reinforced masonrywalls together with wood frame floors "MIS o (k) unreinforced masonry walls, Buyer must be provided with a copy of The Commercial Property Owner's Guide to Earthquake Safety (the "Booklel") published by the California Seismic Safely Commission. Buyer is hereby Informed that the Property' ❑ (a) meets the foregoing requirements, and a copy of the Booklet and a completed "Commercial Property Earthquake Weakness Disclosure Report is attached hereto. Within five business days of Buyers receipt of said Disclosure Report, Buyer shall deliver a duty counlersgned copy of the same to Escrow Holder, with a copy to Seller and Sellers Broker. Escrow Holder is hereby instructed that the Escrow shall not close unless and until Escrow Holder has received the Disclosure Report duly signed by both Seller and Buyer. ❑ (b) does not meet the foregoing requirements requiring the delivery of the Booklet. 4. FIRE PROTECTION. If the Property is located within a designated Slate Responsibility Area as delineated on a map prepared by the California Department of Forestry, California Public Resources Code §4136 mandates that prospective purchasers be advised that the Property is located within a wildfire area which may contain substantial forest fee risks and hazards, that the Stale may not be responsible to provide fire pmteclion services. and that the Property may be subject to the requirements of Public Resources Code §4291 which requires the periodic removal of brush, the maintenance of firebreaks, and Other similar activities. In accordance with such law, Buyer Is hereby informed that the Property is ❑ or is not ❑ within a designated State Responsibility Area. 5, FIRE HAZARD. If the Property is located within an area designated as a Very High Fire Hazard Seventy Zone pursuant to Government Code §S1178 at seq, §51183 5 mandates that prospective purchasers be advised that the Property is located within such a zone and that the Property may be subject to various maintenance. design and/or construction requirements and/or restrictions. In accordance with such law. Buyer is hereby informed that [be Properly is ❑ or is not ❑ within a designated Very High Fire Hazard Severity Zone. 6, AREA OF POTENTIAL FLOODING. If the Property is touted within an area of potential flooding in the event of the failure of a tlam as shown on an inundation map designated pursuant to Government Code §8589.5. 56589.4 mandates that prospective purchasers be advised that the Property is locatetl within such an area. In accordance with such law. Buyer is hereby Informed that the Property is ❑ or is not ❑ within a designated area of potential hooding. 7. FLOOD HAZARD AREAS. If the Property is located within a designated Federal Flood Hazard Area as delineated on a map prepared by the Federal Emergency Management Agency, Federal law, he 42 U.S.C. §4104a, mandates that prospective purchasers be advised that the Property is located within an area having special good hazards and that flood Insurance may b , required as a condition to obtaining financing. In accordance wish such law, Buyer is hereby informed! that the Property is ❑ or u not ❑ within a designated Federal Flood Hazard Area. Initials Page 1 of 2 Initials V998- AIR Commercial Real Estate Assorialion REVISED FOP.M SNIP A.BronF 8. FLOOD DISASTER INSURANCE. If the Seller or Sellers predecessorAn-interest has previously received Federal flood disaster assistance and said assistance was conditioned upon obtaining and maintaining flood insurance on the Property, Federal law, Ill. 42 U.S.C. §5154a, mandate, 'hat prospective purchasers be advised that they will be required to maintain such insurance on the Property and that if said insurance is not maintained and the Property is thereafter damaged by a flood disaster, the purchaser may be required to reimburse the Federal Government for the disaster relief provided. Buyer is hereby informed that to the best of the Sellers knowledge Federal Rood disaster assistance has 0 or has not 0 been previously received with regard to the Property. Note: if such disaster assistance has been received, the law speckles that the required notice be "contained in documents evidencing the transfer of ownership . f1--WATER-HFATFR-BRACING-1GJhe.P+eparFyionlains- or, aunerel healers Selarya re9uae9.ply..GalifamiaJleallhand-SalelY�ede 419211-1e-udpY-te-the-BayecJhalall cushwater heatarahawAeen-Wasea�irappe0.arglerananare0-in-Aso rdance withlai, puyscn rmreby-advised Matlhs+equireA-9rasb+9; sbappingand/er-aaaharaJrava9sr-have-ne469ean-rnslalled. 10. TITLE INSURANCE. In the event that the Purchase Agreement does not at present provide that title insurance will be obtained, Buyer is strongly urged to Consider purchasing such insurance, and, in accordance with California Civil Code §1057.6, is advised as follows: IMPORTANT: IN A PURCHASE OR EXCHANGE OF REAL PROPERTY, IT MAY BE ADVISABLE TO OBTAIN TITLE INSURANCE IN CONNECTION WITH THE CLOSE OF ESCROW SINCE THERE MAY BE PRIOR RECORDED LIENS AND ENCUMBRANCES WHICH AFFECT YOUR INTEREST IN THE PROPERTY BEING ACQUIRED. A NEW POLICY OF TITLE INSURANCE SHOULD BE OBTAINED IN ORDER TO ENSURE YOUR INTEREST IN THE PROPERTY THAT YOU ARE ACQUIRING. 11. OTHER. PLEASE NOTE: While the information contained in or attached to this Disclosure Statement is believed to be accurate as of the date that it was prepared, the applicable laws and the areas covered by the various natural hazard zones, etccan change from time to time. Prior to the close of escrow, Buyer may wish to again check the status of the Property. Also, the cry aillor County in which the Property is located may have established natural hazard zones in addilion to those Rated above. Buyer is advised to check with the appropriate too it agency or agencies. The descriptions contained within the above disclosure paragraphs are not Intended to be full and complete dissertations of all of the possible ramifications to the Buyer andlor the Property. in the event that this document Indicates that the Property is affected by one or more of the disclosures. Buyer is advised to: 1. Review the applicable laws In their entirety. 2. Seek advice of counsel as to the legal consequences of the Items disclosed. 0. Retain appropriate consultants to review and Investigate the Impact of said disclosures. Likewise no representation or recommendation is made by the AIR Commercial Real Estate Association or by any broker as to the legal sufficiency, legal affect, or consequences of this document or the Purchase Agreement to which It relates. Date: aA 2004 SAINT-GOBAIN CONTAINERS INC. Seiler Receipt of the above Seller's Mandatory Disclosure Statement is hereby acknowledged: of Vernon Date 4c� � F ruary 3, 2005 //�'/llw Buyer Bruce V. Malkenborst, City Administrator/City Clerk NOTE: These forms are often modified to ..at changing requlremenbs of law and needs of the Industry. Always write of call to make sure you are utilizing the most currant torn: AIR COMMERCIAL REAL ESTATE ASSOCIATION, 700 S. Flower Street. Suite 600, Los Angeles, Calif. 90017 Initials Page 2 of 2 Initials @1998-AIR Commercial Real Estate Association REVISED mnr,, CM^ , a I— JCP Commercial Natural Hazard Disclosure Report Property Address: 4855 E 52Nd PI, Vernon, Los Angeles County, CA 90040 APN: 6314 022 008 Report Number: 2004111600073 Date: 11/16/2004 ELLER S ACKNOWLEDGEMENT AND DISCLOSURES This section is provided for the Seller's convenience in providing cenain disclosures that may be applicable to the property and this transaction. This section is to be completed by the seller or their agent and provided to the purchaser. The following disclosures are provided by: ❑ Seller or ❑ Seller(s) Agent ❑ Seller or ❑ Seller(s) Agent Date Seller Disclosure — Earthquake Safety This structure was built prior to 1975 and has walls of (i) pre -cast (e.g. tilt -up) concrete or reinforced masonry together with wood frame floors or roofs or is constructed of (h) un-reinforced masonry Yes _ No _ ' Do not know If (1) the improvements on the property were Constructed prior to 1975, and (2) said improvements include structures with (i) pre -cast (e.g. ❑II -up) concrete or reinforced masonry walls together with wood theme floors or roofs or III) un-reinfoced masonry walls, Buyer must be provided With a copy of the Commercial Property Owner's Guide to Earthquake Safety (copy included with this report) published by the California Seismic Safely Commission (Caldomia Government Code §8893 at seq.). This booklet explains that owners of un-reinforced masonry buildings in Seismic Zone 4 (most of Califomia) who have received notice that their buildings have load -bearing un-reinforce masonry walls must post their buildings with signs warning that they may be unsafe in an earthquake (California government Code §8875.8). This information is provided by the Seller or Broker. JCP has not validated this information in any way and takes no responsibility for its accuracy. Seller Disclosure - Water Nasser Bracing Installation Yes _ No— Do not know _ No Free Standing Water Heater If the property contains one or more water heaters, Seller is required by California Health and Safely Code §19211 to certify to the Buyer that all such water heaters have been braced, strapped anclior anchored in accordance with have. This water healer bracing installation information is provided by the Seller or Broker. JCP has not validated this information in any way and takes no responsibility for its accuracy. Seller Disclosure - Title Insurance is provided by the Purchase Agreement. Yes _ No _ Do not know This Title Insurance information is provided by the Seller or Broker. JCP _ has not validated this information in any way and takes no responsibility for its accuracy. In the event that the Purchase Agreement does not at present provide that title insurance will be obtained, Buyer is strongly urged to consider purchasing such insurance, and, in accordance with California civil Code §1067.6. is advised as follows: IMPORTANT: IN A PURCHASE OR EXCHANGE OF REAL PROPERTY, IT MAY BE ADVISABLE TO OBTAIN TITLE INSURANCE IN CONNECTION WITH THE CLOSE OF ESCROW SINCE THERE MAY BE PRIOR RECORDED LIENS AND ENCUMBRANCES WHICH AFFECT YOUR INTEREST IN THE PROPERTY BEING ACQUIRED. A NEW POLICY OF TITLE INSURANCE SHOULD BE OBTAINED RECEIPT AND I(WE) HAVE READ AND UNDERSTOOD THE VE SELLER'S DISCLOSURES AS WELL AS THE NATURAL HAZARD, MILITARY 2 ORDyAN ,AND AIRPORT INFLUENCE DISCLOSURES, AND MOLD DVISOBY CONTAINED IN THIS REPORT. 7� � February 3. 2005 Signature of Buyer Bruce V. Malkenhoret, City Data Administrator/City Clerk (City of Vernon) Signature of Buyer Date Page I of 10 CP Geologists 321 '.V:, _ , CPGeoldgists 1 COIi meI'Clal Natural Hazard Disclosure Report Property Address: 4855 E 52Nd PI, Vernon, Los Angeles County, CA 90040 APN: 6314 022 008 Report Number: 2004111600073 Date: 11/16/2004 THE SUBJECT REAL PROPERTY LIES WITHIN THE FOLLOWING t. A SPECIAL FLOOD HAZARD AREA (Any type Zone 'A' or N") designated by the Federal Emergency Management Agency Yes _ No X Do rot know am information not available iron local jurisdiction _ JCP determination based on the officially adopted maps: Community is NOT participating in the National Flood Insurance Program. No panel available. - Yes X No - --. -........••• •o••��o „i"imanon map pursuant to Section 8589.5 o Me ovemment e. _ Do not krow arq information not available boor focal junsdction _ JCP determination based on the officially adopted maps: In an Area of Potential Flooding Caused BylDam Failure according to the maps adopted by The State of California Office of Emergency Services. Refer to the explanation section below for more information on this zone. property is subject to Me maintenance requirements of Section 51182 of the Government Cede. a ovemmen e. a owner o Yes_ No X JCP determination based on the oficially�edopted maps: NOT in an area of Very High Fire Hazard S''eeverlty Zone as defined on the state level maps (Gov. Code 51178). A local agency may exclude or include additional fire zones at their option. Concerned parties should contact their local fire services for more information. 4. A WILDLAND AREA THAT MAY CONTAIN SUBSTANTIAL FOREST FIRE RISK AND HAZARDS pursuant to Section 4125 of Me Public Resources Code. The owner of His property is subject to Me maintenance requirements of Section 4291 01 the Public Resources Cade. Additionally, it is rot Me state's responsibility to provide fire protection services to any building or structure located within Me wildlands unless Me Depantu nt of Forestry and Fire Protection has aMe sal into a cooperative agreement with a local agency for Hose Purposes pursuant to Section 4142 of Me Public Resources Code. Yes_ No X JCP determination based on the officially a3dopted maps: NOT in an official Stale Responsibility Area.IFire protection services for structures in this area are provided by local fire departments. Page 2 of 10 , IP Geologists 321 Warren Avenue Fremont CA 94539 800-748.5233 reoorfs@ic0-inc.com Wwvr jcomoorls rum (Cornf Commercial Natural Hazard Disclosure Report Property Address: 4855 E 52Nd PI, Vernon, Los Angeles County, CA 90040 APN: 6314 022 008 Report Number: 2004111600073 Date: 11/16/2004 S. AN EARTHQUAKE FAULT ZONE pursuant to Section 2622 of the Public Resources Code. Yes_ No ] JCP determination based on the officially adopted maps: NOT in an official Earthquake Fault Zone. There are no mapped active fault traces on the property. See the Alquist-Prielo Earthquake Fault explanation section for additional information. 6. A SEISMIC HAZARD ZONE pursuant to Section 2696 of the Public Resources Code. Yes (Landslide Zane)_ Yes (Liquefaction Zone) X No— Map rot yet released by slate _ JCP determination based on the officially adopted maps: In an Official Seismic Hazard Zone. Located in a Liquefaction Hazard Zone. Other Seismic Hazards that may eventually be addressed on these maps have not yet been evaluated for Los Angeles County. 1. County Level Geologic and Seismic Zone Information Based on the officially adopted natural hazard maps in the County's General Plan, the site is: NOT in a zone of high geologic hazard. Located on surficial alluvial materials of Low Liquefaction Susceptibility (Zone LL). Liquefaction is a loss of ground strength that may occur during strong earthquake shaking. Although large areas of the County have a potential for liquefaction, the phenomena rarely occurs. Also located in a dam inundation area. 9. City Level Geologic Hazard Zone Determination Based on the OMcially adopted natural hazard maps in the City's General Plan, the site is: Located in either an unincorporated area of the County or does not have officially adopted mapped information available to us at this time from which a geologic determination can be made. Page 3 of 10 CP Gee:�giss JCPGeololgfsts commercial Natural Hazard Disclosure Report Property Address: 4855E 52Ntl PI, Vem6n, Los Angeles County, CA 90040 APN: 6314 022 008 i Report Number: 20041116DO073 Date: 11/16/2004 The descriptions, explanations and natural hazard disclosures provided in this report are not intended to be full and complete disclosures of all possible hazards and their effects to the Buyer and/or the property. Identified natural hazards and any others that may exist but are not addressed in this report may limit the ability to develop the real property, to obtain insurance, or to receive assistance alter a disaster. In the event this document indicates the property is affected by one or more natural hazards, buyer(s) and 5eller(s) are advised to: 1. Review the applicable laws in their entirety. 2. Seek advice of counsel as to any legal consequences of the disclosed items. 3. Retain appropriate consultants to review and investigate the impact of said disclosures,. On-sfte inspections andor due diligence assessments by appropriately licensed engineers and experts are recommended prior to completing a real estate, loan, or insurance transaction. SPECIAL FLOOD HAZARD AREA Property in a Special Flood Hazard Area 'A[ or'V' is subject to flooding in a'100-year rainstorm.' Federally connected lenders are required to have homeowners maintain flood insurance in these zones. A 100-year flood occurs on average once every 100 years, but may not occur in 1,000 years or may occur in successive years. Other types of flooding, such as dam failure, are not considered in developing these zones. In some cases, the insurance requirement may be waived or modified by obtaining a -Letter of Map Revision' (LOMR) or 'Letter of Map Amendment" (LOMA) from the Federal Emergency Management Agency (FEMA). this might be possible where flooding is shallow and able but is not n the zone. act Cont fifl was Placed on the site, appropriate flood control measures were taken, or only the lot and no part of the structure is i FEMA directly for more information. Flood insurance for properties in Zones B. C. X or D is availzone. Cont Zones A, AO, AE, AN, Al-A30:Ama of'100-year flooding - a 1 % or greater chance of annual flooding. Zones V, V1-V30: Area of'100-year' Flooding in coastal (shore front) areas subject to wave action. Zone B: Area of moderate flood dsk, These are areas between the'100' and'500' year flood-nsk levels. Zones X: An area of moderate to minimal flood risk Zones C, D: NOT IN an area of'100-year' flooding. Area of minimal (Zone C) or undetermined (Zone D) flood hazard. AREA OF POTENTIAL FLOODING (DAM FAILURE) These areas are subject to potential flooding di a result. Most n the event of a sudden and total failure of a dam and injury could occur as areas are defiined assuming an instantaneous dam failure with a full reservoir. However, dams rarely fail instantaneously and reservoirs are not always filled to capacity. Not all dams in the state have inundation zones mapped. There may be exceptional conditions wheresuch a map was not delineated. i required by the OES; therefore, the zones are not $ VERY HIGH FlltE HAZARD SEVERITY ZONE (VHFHSZ) r: VHFHSZs are defined by the California Department of Forestry and Fire Protection (CDF) and local fire authorities in 'Local Responsibility Areas' where fire suppression is the responsibility of a local fire Department. In these zones Properties may have a higher risk for fire damage and are required to have a 'Class A' roof for new construction or replacement of existing roofs. In addition, the' property must be maintained in a fire-resistant condition through adequate vegetation clearance around and above the structure, spark screens on chimneys and slovepipes, leaf removal from roofs, and other basic fire -safety practice, Contact your fire department for a complete list of requirements and exceptions. Page 4 of 10 7P Geologists 321 Warren Avenue Fremont CA 94539 800. 748.5233 reoor(s@jcp-inc.com wvnv.lcpreports.cam ff)2004 Commercial Natural Hazard Disclosure Report Property Address: 4855 E 52Nd PI, Vernon, Los Angeles County, CA 90040 APN: 6314 022 008 Report Number: 2004111600073 Date: 11/16/2004 WILDLAND FIRE AREA (STATE RESPONSIBILITY AREA) A wildland area where the CDF's fire protection services are responsible for suppressing fires is called a'State Responsibility Area' (SRA). These are generally mral areas where a significant will land fire potential exists. Unless the county has assumed the fire suppression responsibility or has an agreement with a local fire agency, property owners in an SRA are responsible for organizing structural fire protection services. Such information is not available on maps; therefore, it cant be provided here. For very isolated properties with no local fire services there may be significant fire risk or only seasonal fire services. Property owners in an SRA are required to maintain adequate vegetation clearance around and above the structure, spark screens on chimneys and stovepipes, and other bask fire -safety practices. Contact your fire department for a complete list of requirements and exceptions. EARTHQUAKE FAULT ZONE Earthquake Fault Zones are delineated and adopted by California as part of the Alquisl-Priolo Earthquake Fault Zone Act of 1972. Property in an Earthquake Fault Zone does not necessarily have a fault trace existing on the site. Earthquake Fault Zones are areas or bands delineated on both sides of known active earthquake faults. In some places, the zones are more than one -quarter of a mile wide. The potential for 'fault rupture' damage (ground cracking along the fault trace) is relatively high only if a structure is located directly on a fault trace. If a structure is not on a fault trace, shaking will be the primary effect of an earthquake. During a major earthquake, shaking will be strong in the vicinity of the fault and may be strong at some distance from the fault depending on soil and bedrock conditions. It is generally accepted that properly constructed wood -frame houses are resistant to shaking damage. SEISMIC HAZARD MAPPING ACT ZONE Seismic Hazard Zone maps delineate areas subject to earthquake hazards. New development in a Seismic Hazard Zone is only permitted If it can be shown that mitigation makes the site acceptably safe. Maps are only available for limited areas now, but will eventually cover all of California. The hazards addressed are or will be: liquefaction, enhanced ground shaking, earthquake induced landslides, and various other ground failures. The first release of maps only addresses liquefaction and/or landslide zones. Liquefaction Hazard Zones are areas where there is a potential for, or an historic occurrence of liquefaction. Liquefaction is a rare soil phenomenon that can occur when loose, water saturated, fine-grained sands, and silty sands that lie within 50 feet of the ground surface, are shaken in a significant earthquake. The soil temporarily becomes liquid -like and structures may settle unevenly. Earthquake -Induced Landslide Hazard Zones are areas where there has been a recent landslide, or where the local slope, geological, geotechnical, and ground moisture conditions indicate a potential for landslides as a result of earthquake shaking. LOS ANGELES COUNTY GEOLOGIC ZONES DISCUSSION Fault Zones • Active Faults: Several faults and fault segments not included as part of the Earthquake Fauk Zone Act are considered active by the County. Zones from 1000 feet to 1.2 miles wide have been defined by the County around these faults. Properties in these zones are at some risk for fault rupture (surface cracking along the fault) • Potentially Active Faults: Faults active in the last 750.000 years but with no historical activity (past 10,000 years) are considered 'potentially active' by Los Angeles County. Zones from 1000 feet to 1.2 miles wide have been defined by the County around these faults. Properties In these zones may be at some risk for fault rupture, but the risk is probably lower than that for active faults. • Conditionally Active Faults: Faults active between 750,000 and 2,000,000 years ago are considered 'conditionally active' by Los Angeles County. Properties located directly on one of these faults are at an undetermined but relatively small risk of rapture. Page 5 of 10 OP Geologists 321 An:,ime r.-rant ra rr,,; ....,,., ;',..I J jUpGeolilg ists commercial Natural Hazard Disclosure Report Property Address: 4855 E 52Nd PI, Vernon, Los Angeles County, CA 90040 APN: 6314 022 008 Report Number: 2004111600073 Date: 11/1fir2004 • Slope Stability Zones The County Safety Element inventories landslides and skpe stability hazards. The minimum size of a slide is five acres, but clusters of slides may be shown as a single landslide. A delineated landslide is not a definitive statement of a site's stability, either now or in the future. Many slides are mitigated during development. For detailed stability information, a geotechnical consultant should be retained. . • Hillside Areas: Areas subject to Slope designated 'Hillside Area,' it does net ecessaily mean hat andslidelarly N sexst on the property oradients exceed 5 that landsliding is ient If a mminent or probable. • Area Impacted by Storm -Induced Landsliding: Areas that experienced storm -induced shallow landsliding during the particularly wet years of 1969, 1978, and 1980 have been delineated on the maps. • Area Impacted by Mud and Debris Flooding: Areas that have experienced storm -induced shallow landsliding mud and debris flows. Such flows may happen during penods of exceptionally high rainfall as that which occurred in 1969, 1978, and 1980. • Area of Shallow Sur icial Landslides: These �Ireal include regions in the Santa Monica and San Gabriel Mountains and the Puente Hills where abundant shallow landslides Aay occur. • Identified Bedrock Landslide: These inctuc i definite and probable landslides ranging from five to hundreds of acres in size. Liquefaction Zones Liquefaction is a liquid -like soil condition which may occur during strong earthquake shaking K the groundwater is shallow and the subsurface soils are loose and cohesionless (such as sands). The factors can combine to produce liquefaction in certain local areas. • Liquefiable Areas (Zone L): Groundwater is less than 30 feet deep in these areas, however, it does not necessarily mean that liquefaction will occur during earthquake shaking. This zone has a higher potential for liquefaction than other zones. • Potentially Liquefiable Areas (Zone PL): Flat -lying valley areas with a relatively low liquefaction Potential. • Low Liquefaction Susceptibility (Zone LL): Flat to gently sloping areas with relatively low liquefaction potential. • Very Low Liquefaction Susceptibility (Zone VL): Areas underlain by bedrock not normally susceptible to liquefaction. j Seismic Zones • Tsunami Inundation Area: This area has been designated as a zone of moderate risk for tsunami (seismic see wave or "idol wave') run-up. The tsunami zone may be inundated by waves which recur on average of once every 500 years. • Dam Inundation Area: These may be subject to flooding in the event of dam failure. They are defined assuming an instantaneous dam failure with a lull reservoir. However, dams rarely fail instantaneously and reservoirs are not always filled to capacity. CITY -LEVEL GEOLOGIC AND SEISMIC ZONES DISCUSSION This disclosure report reviews the officially adopted geologic hazard maps in the Safely Element that each incorporated city �faa in California is required to include in its General Plan. The city the subject property is located in has either not officially ,g adopted hazard zonation maps in its General Plan at an appropriate scale to delineate where hazards may exist on a single parcel basis or will not make such maps available outside city offices. However, potential natural hazards may exist and be delineated on other sources used by the city in its Planning, Engineering, or Building Departments. Such potential sources are not reviewed in this report. All parties should be aware that California is 'earthquake country.' Faults that may exist in this City or in neighboring regions could cause earthquake shaking or other fault related phenomena at the property. Other geologic hazards such as, but not limited to liquefaction (a type of soil 'settling that can occur when loose water -saturated sediments are shaken significantly in an earthquake) may occur in certain valley floor areas and landslides are a possibility in any hillside area. Page 6 of 10 -7R Geologists 321 Warren Avenue Fremont CA 94539 800.748.5233 reports@jcp-mc.com www_icomoorts.com i120(M f. JC Commercial Natural Hazard Disclosure Report Property Address: 4855 E 52Nd PI, Vernon, Los Angeles County, CA 90040 APN: 6314 022 008 Report Number: 20D4111600073 Date: 11/16/2004 NOTE: County and cfty-level information sources are developed independently of each other and do not necessarily define or delineate hazards in the same way. A site can be in a geologic hazard zone according to the city and not in zone according to the county and vice versa. Cities and counties may use other information in addition to their General Plan sources to determine it hazards exist at a site or which sites may require geologic studies prior to new or additional construction. Such information could be a matedal fact to be disclosed in addition to General Plan information. Additional natural hazards may exist and be delineated on other sources used by the City in its Planning, Engineering, or Building Departments. Such potential sources are not reviewed in this report. To investigate other sources of natural hazard information that may be available and used at the city level, contact the city Engineering, Planning or Building Departments. • END OF LOCAL AREA DISCLOSURES AND DISCUSSIONS SECTION Page 7 of 10 CP Geologists 21 YbD:an A-:"u, . Ficn of �A ?,Mg 300 32521Lt :el iA i j::{.. ino a,,,.... r , JCPGeologists Commercial Natural Hazard Disclosure Report Property Address: 4855 E 52Nd PI, Vernon, Los Angeles County, CA 90040 APN: 6314 022 008 Report Number. 2004111600073 Date: 11/16/2004 Determination The subject property is WITHIN one mile of a Formerly Used Defense (FUD) site containing military ordnance. Los Angeles Ordnance Depot RAC: 4 Two locations were used in the 1940's, the primary location was used as an ordnance depot. RAC Scoring: A risk assessment procedure was developed by U.S. Army Corps of Engineers (USACE) to prioritize the remedial actions at FUD sites. Each FUD she is given a Risk Assessment Code (RAC) score to describe the site status. The risk assessments based on the best available information resulting from records searches, reports of Explosive Ordnance Disposal (EOD) detachment actions, field observations, interviews, and measurements. The RAC is dependent on two factors: hazard severity and probability. Discussion FUD sites can include sites with common industrial waste (such as fuels), ordnance or other warfare materiel, unsafe structures to be demolished, or debris for removal. NOTE: nest FUDS sites do not contain unexploded ordnance. California Civil Code 1102 requires disclosure of those shas containing unexploded ordnance. 'Military ordnance- is any kind of munitions, explosive device/matedal or chemical agent used in military weapons. Unexploded ordnance are munitions that did not detonate. Only those FUO sites that the USACE has identified to contain Military Ordnance or have mitigation projects planned for them are disclosed in this report. Additional sites may be added as military installations are released under the Base Realignment and Closure (BRAG) Act. Active military sites are NOT included on the FUDS list. -_ .AIRPORT INFLUENCE AREA DISCLOSURE E Basetl on certain mapped Airport Influence Areas determined by a County Airport Land Use Commission, the following determination can be made: The property IS NOT IN an Airport Influence Area Discussion An "airport influence area; also known as an'airyort referral area; is the area in which current or future airport -related noise, over flight, safety, or airspace protection factors may significantly affect land uses or necessitate restrictions on those uses as determined by an airport land use commission. JCP uses the current Airport Influence Area maps Provided to us by County Airport Land Use Commissions. The inclusion of military and private airports vanes by County and therefore, depending on the County, military and private airpons may or may not be included in this disclosure. I Page 8 of 10 .P Geologists 321 Warren Avenue Fremont CA 94539 800-748.5233 reports Q lcp-inc.com wwwlcommorts.com @2004 - JCP:. Commercial Natural Hazard Disclosure Report Property Address: 4855 E 52Nd PI, Vernon, Los Angeles County, CA 90040 APN: 6314 022 008 Report Number: 200411160DO73 Date: 11/16/2004 MOLD ADVISORY The Buyer is hereby advised that naturally occurring molds may exist both inside and outside of any home and may not be visible to casual inspection. Persons exposed to extensive mold levels can become sensitized and develop allergies to the mold or other health problems. Extensive mid growth can damage a structure and its contents. All prospective purchasers of residential and commercial property are advised to thoroughly inspect the subject property for mold. Be sure to inspect the property inside and out for sources of excess moisture, current water leaks and evidence of past water damage. For molds to grow and reproduce, they need only a food source - any organic material, such as leaves, wood, paper, or dirt and moisture. Because molds grow by digesting the organic material, they gradually destroy whatever they grow on. Mold growth on surfaces can often be seen in the form of discoloration, frequently green, gray, brown, or black but also white and other colors. As pan of a buyers physical inspection of the condition of a property, the buyer may consider engaging an appropriate and qualified professional to inspect and lest for the presence of harmful molds and to advise the buyer of any potential risk and options available. This advisory is not a disclosure of whether harmful mid conditions exist at property o not JCP Geologists has not perfomad testing or inspections of any kind Any use of this form is acknowledgement and acceptance that JCP does not disclose, warrant or indemnify mold conditions at a property in any way and is not responsible in any way for mold conditions that may exist. Information is available from the California Department of Health Services Indoor Air Quality Section fact sheet entitled, 'Mold in My Home: What Do I Do?' The fact sheet is available at www.cal-iaq.org or by calling (510)540-2476. The Toxic Mold Protection Ad of 2001 requires that information be developed regarding the potential issues surrounding naturally occurring molds within a home. Information was written by environmental authorities for inclusion in the Environmental Hazards: A Guide for Homeowners, Buyers, Landlords and Tenants booklet developed by the California Environmental Protection Agency and the Department of Health Services. It is found in Chapter VI of that booklet, and includes references to sources for additional information. For local assistance, contact your County or City Department of Health, Housing, or Environmental Health. CONFIRMATION OF COVERAGE AND INDEMNIFICATION JCP Geologists has prepared a Natural Hazard Disclosure Report for the subject property identified above. This Confirmation of Coverage Statement applies only to the current transaction for which this JEP report was prepared, as of the date this report was prepared. This statement is confirmation that JCP Geologists is included as an insured under a $20 million Professional Liability policy for errors 8 omissions arising from the services JCP performs. Coverage, which is subject to specific terms and conditions in the policy, is provided for damages JCP is obliged to pay as a result of its negligent acts, errors or omissions arising out of its Natural Hazard Disclosure Professional Services provided for the above referenced residential property as of the date this report was prepared. JCP's Professional Liability insurance policies contain an agreement which, subject to the specific terms and conditions contained in the policy, indemnifies and provides defense of the Clients of JCP against claims caused by the negligent acts, errors or omissions of JCP that fall within the scope of a contractual indemnification obligation of JCP to its Clients. For this purpose, Clients of JCP are the contractual parties to this transaction and their respective real estate agents for which JCP has provided professional Services. Date: 11/16/2004 By: JCP Geologists Page 9 of 10 S� JCF`Geologists commercial Natural Hazard Disclosure Report Property Address: 4855 E 52Nd P1, Vernon, Los Angeles County, CA 90040 APN: 6314 022 008 Report Number. 2004111600073 Date: 11/16/2004 JCP Geologists (JCP) provides this Commercial Natural Hazard Disclosure Report as a disclosure of certain mandated natural hazard informon atiend transmission of certain Seller Provided disclosures. It provides the investor with an as diligence commw rly cost-effective guide to aid in d imarl decision making pow to entering into purchase negotiations for a prospecess prospective property aet. Use of this report e acknowledgement of and agreement to aMtle by all Terms and conditions set MM in this report. The report is specifically prepared for the land parcel(.) identified by Assessor Parcel Number(s) (APN's) or developers Tract and Lot numbers supplied to JCP by the client (or reasonably inferred from current owner Information it Mat was supplied instead). In the event Cot Me parcel identification provided us is incomplete. Me subject property tgs sesumetl to comprise a single lard parcel and is Itlentlfietl for the Purposes of Mis report by the corresponding single APN. All parties understand Mat to Information provided in Me tlfspowres does not apply M any other assessors parcel number other Clan those identified in this report For the Natural Hazard Disclosures, JCP examines only the following maps; (a) NFIP Flood Insurance Rats Maps (b) CaliMmia Office of Emergency Services Dam Failure Inundation maps, (c) As 8. Real Estate: disclosure (CDF) maps, (d) AICISS -Prlclo EeMqueke Fault Zone maps, (e)Califomia Seismic Hazards Mapping Act maps (where available) (Q ) certain LOMR's or LOMA's (rot all that exist maybe available to JCP), (g)ceriain natural hazard Safety Element maps adopted by Me county Ss part of its General MA'SPlan(Safety Element, (h) geologic and seismic r or Se maps adopted r lie city th s part of its General Plan's Safety Element only for location ei Me above property as identified by Me seller or sellers agent. JCP relies ou close olfidat sources for Me infomtation in this repon and does not produce, maintain w verity the information. Other hazard or disclosure information Mat may Must in a lunsdctional Safety Element, General Plan or any other source a cot Provided in this report. The following procedures and Ikodeftons apply M all of the disclosures on all pages d this report Our serrSoluices include, tlocale, thee site it appropriate, tt of Pv oopriateassaussim rolls, cetlastral type mope, photographic enlargements of maps and various cartographic techniques Purposes of denting property lines, Me The determination is matle as accurately as reasonably possible using close said maps. For determination procedures and JCP will not�l ablef orssuch anon. ou�l maps are used. Any erroM in MB assessors rolls may effect the Decisions by jurisdictions relative to required Studies, reports, ed. may be made using the information disposed in this repo", as well as other inforcnatiou in their files and/or local ordinances and procedures. Additional information which may be material to this transaction may exist In Other sowces It used in this report; however, research of such possible sources of the Information in such sources is beyond the scope of this report and will not be sainted here. The disclosure information in this repo" cannot be coesbued as a substitute for a geologic or engineering sbdy rear that a city or county will not require such studies. No visual examination of Me subject site was performed It was a Study of any )uosdiction's Hies or other sources made to determine Me existence of any hazard which may exist on the site. This repo" is lox to Purpose is Wain map -based, real estate transaction al parties disclosures only and is not a substitute Iw the broker/agent property inspection. Due to changes disclosure maps, laws and contractual parties, Mis repo" cannot btu relied upon for oMer properties or for /inure Me of of clue sublect property. All parties should be aware Maf the Me is subject to change. JCP is not responsible for advising parties of any changes Mat may occur alley the date of this report. Upon request s. within six months of tasue'll Mis report, JCP will update Me report for ro additional charge Mr OleOccur same thendat eof Col' j Alle represantatlona regarding earthquake safety, water heater bracing, and title Insurance presented in this repo" are provided far Mbuyer's convenience by Me seller(s) or agent(.) of the subject property. JCP has not validated this information end takes no 3 responsibility for its accuracy. If any party to this transaction has concerns relative to the stability or condition of the property or If 'red flags' are observed during sa any Party's Inspection, we suggest Mat a consultant be retained to Study the site and render an opinion. This report is provided for 9 the single property for which it was Issued as of the data of this report, and has been Prepared for Me exclusive use of the current sellens), their agent(s), and potential buyers of this property. The findings are not Intended for use by other parties and may not F contain Sufficient Information for Me purposes of other parties or other use.. Our professional services are performed using a degree of care and skill ordinarily exercised under similar circumstances b re utable consultants. No other warran Implied, is matle as to Me professional advice presented in this report. y p ty. expressed or I u Page t0 of 10 -P Geologists 321 Warren Avenue Fremont CA 94539 800.748,5233 reports@jco-inc.com wvvwirnrennrts rnm Cpnnd Commercial Natural Hazard Disclosure Report Property Address: 4855 E 52Nd PI, Vernon, Los Angeles County, CA 90040 APN: 6314 020 003 Report Number: 20D4111600076 Date: 11/16/2004 SELLER ACKNOWLEDGEMENTAND DISCLOSURES This section is provitletl for the Seller's convenience in providing certain disclosures mat may be applicable to the property and this transaction. This section is to be completed by the seller or their agent and provided to the purchaser. The following disclosures are provided by: ❑ Seller or ❑ Seller(s) Agent ❑ Seller or ❑ Sellerls) Agent Date Seller Disclosure - Earthquake Safety This structure was built prior to 1975 and has walls of (i) pre -cast (e.g. lilt -up) concrete or reinforced masonry together with wood frame facts, or roofs or is constructed of (if) un-reinforced masonry Yes No _ . Do not know _ If (1) the improvements on the property were constructed prior to 1975, and (2) said improvements include structures with (i) pre -cast (e.g. tilt -up) concrete or reinforced masonry walls together with wood frame floors or roofs or (if) un-refnfomed masonry walls. Buyer must be provided with a copy of the Commercial Property Owner's Guide to Earthquake Safety (copy Included with this report) published by the California Seismic Safely Commission (California Government Code §8893 et seg.). This booklet explains that owners of un-reinforced masonry buildings in Seismic Zone 4 (most of California) who have received notice that their buildings have load -bearing un-reinforce masonry walls must post their buildings with signs warning that they may be unsafe in an earthquake (California government Code §8875.8). This information is Provided by the Seller or Broker. JCP has not validated this information in any way and takes no responsibility for its accuracy. Seller Disclosure -Water Heater Bracing Installation Yes _ No _ Do not know _ No Free Standing Water Heater If the property contains one or more water heaters, Seller is required by California Health and Safety Code §19211 to certify to the Buyer that all such water heaters have been braced, strapped and/or anchored in accordance with lawThis water heater bracing installation information is provided by the Seller or Broker. JCP has not validated this information in any way and takes no responsibility for its accuracy. Seller Disclosure - Title Insurance Is provided by the Purchase Agreement. Yes _ No— Do not know _ This Title Insurance information is provided by the Seller or Broker. JCP has not validated this information in any way and takes no responsibility for its accuracy. In the event that the Purchase Agreement does not at present provide that title insurance will be obtained, Buyer is strongly urged to consider purchasing such insurance, and, in accordance with California civil Code §1057.6, is advised as follows: IMPORTANT: IN A PURCHASE OR EXCHANGE OF REAL PROPERTY, IT MAY BE ADVISABLE TO OBTAIN TITLE INSURANCE IN CONNECTION WITH THE CLOSE OF ESCROW SINCE THERE MAY BE PRIOR RECORDED LIENS AND ENCUMBRANCES WHICH AFFECT YOUR INTEREST IN THE PROPERTY BEING ACQUIRED. A NEW POLICY OF TITLE INSURANCE SHOULD BE OBTAINED END SELLER'S DISCLOSURES. BEGIN REPORT RECEIPT I(WE) HAVE READ AND UNDERSTOOD THE ABOVE SELLER'S DISCLOSURES AS WELL AS THE NATURAL HAZARD, MILITARY ORD/NyecE, ANp AIRPORT INFLUENCE CLOSURES, AND MOL DVISORY CONTAINED IN THIS REPORT. /,( //� ✓/ �t�3- ebruary 3, 2005 Signature WBuyer Bruce V. Malkenhorst, City Date Administrator/City Clerk (City of Vernon) Signature of Buyer Date Page t of 10 �AF4 JCPGeolo, ' , commercial Natural Hazard Disclosure Report Property Address: 4855 E 52Nd PI, Vernon, Los Angeles County, CA 90040 APN: 6314 020 003 Report Number. 2004111600076 Date: 11/162004 THE SUBJECT REAL PROPERTY LIES WITHIN THE 1. A SPECIAL FLOOD HAZARD AREA (Any tyP§ Zone •A• Or-V') designsted by the Federal Emergency Management Yes — No X DO not know and information not available from local junsdiction Agency. _ JCP determination based on the officially adopted maps: Community is NOT participating in the National Flood Insurance Program. No panel available. - -- --- - •••�••••e.— ump pursuant to Section 8519.5 of the Gornm veent Code. Yes % No _ Do not know and Information not available from local jurisdiction _ JCP determination based on the officiallyjadopted maps: In an Area of Potential Flooding Caused By Dam Failure according to the maps adopted by The State of Calffomia Office of Emergency Services. Refer to the explandlion section below for more information on this zone. Linen ject to the maintenance requirements of Section WINO' Govemmenr Code. or 0 a ovemmen e. a ow er o IE No X ination based on the officially adopted maps: rea of Very High Fire Hazard Severity Zone as defined on the State level maps (GovCade 51178). A local exclude or include additional fire zones at their option. Concerned parties should contact Neir local fire ore infortnalion. 4. A WILDLAND AREA THAT MAY CONTAIN SUBSTANTIAL FOREST FIRE RISK AND HAZARDS pursuant W Section 4125 of the Public Resources Cade. The owner of this Property is subject to the maintenance requirements of Section 4291 of rho Public Resources Code. Addifionally, it is not me BMW's responsibility to provide fire protection services to any building or structure wiltllands unless the Department of Forestry and Fire Protection has amend into a cooperative agreement with a ocaled within the Purposes pursuant to Section 4142 of the Public Resources Code. local agency for those Yes_ No X I JCP determination based on the officially adopted maps: NOT in an official State Responsibility Area. Fire protection services for structures in this area are Provided by local fire departments. Page 2 of 10 'P GeologistS 321 l•Valm'! Avenue Fremont CA 94539 800.748.5233 mPO1ts0i,v--,nc •_Om www.icOTenoriS.COm kYJflf:.4 C0mmercial Natural Hazard Disclosure Report Property Address: 4855 E 52Nd PI, Vernon, Los Angeles County, CA 90040 APN: 6314 020 003 Report Number: 2004111600076 S. AN EARTHOUAKE FAULT ZONE pursuant to Section 2622 of the Public Resources Code. Yes_ NOX_ Date: 11/16/2004 JCP determination based on the officially adopted maps: NOT in an official Earthquake Fault Zone. There are no mapped active fault traces on the property. See the Alquist-Priolo Earthquake Fault explanation section for additional information. 6. A SEISMIC HAZARD ZONE pursuant to Section 2696 of the Public Resources Code. Yes (Landslide Zone) _ Yes (Liquefaction Zme) X No— Map not yet released by state _ JCP determination based on the officially adopted maps: In an Official Seismic Hazard Zone. Located in a Liquefaction Hazard Zone. Other Seismic Hazards that may eventually be addressed on these maps have not yet been evaluated for Los Angeles County. T. County Level Geologic and Seismic Zone Information Based on the officially adopted natural hazard maps in the County's General Plan, the site is: NOT in a zone of high geologic hazard. Located on sudicial alluvial materials of Low Liquefaction Susceptibility (Zone LL). Liquefaction is a loss of ground strength that may occur during strong earthquake shaking. Although large areas of the County have a potential for liquefaction, the phenomena rarely occurs. Also located in a dam inundation area. 6. City Level Geologic Hazard Zone Determination Based on the officially adopted natural hazard maps In the City's General Plan, the site is: Located in either an unincorporated area of the County or does not have officially adopted mapped information available to us at this time from which a geologic determination can be made. Page 3 of 10 CP Geoloclists , JCFIGeOE),;:; Commercial Natural Hazard Disclosure Report Property Address: 4855 E 52Nd PI, Vernon, Los Angeles County, CA 90040 APN: E314 020 003 Report Number: 2004111600076, Date: 11/16/2004 The descriptions, explanations and natural hazard disclosures provided in this report are not intended to be full and complete disclosures of all possible hazards and their effects to the Buyer and/or the property. Identified natural hazards and any others that may exist but are not, addressed in this report may lime the ability to develop the real property, to obtain insurance, or to receive assistance after a disaster. In the event this document indicates the property is affected by one or more natural hazards, buyer(s) and seller(s) are advised to: 1. Review the applicable laws in their entirely. 2. Seek advice of counsel as to any legal consequences of the disclosed items. 3. Retain appropriate consultants to review and investigate the impact of said disclosures,. On -see inspections and/or due diligence assessments by appropriately licensed engineers and experts are recommended prior to completing a real estate, loan, or insurance transaction. SPECIAL FLOOD HAZARD AREA Property in a Hazard Area lenders re required specialFlood have homeowners maintain n flood Insuranc'V' Is subject to e inithese zonng in a es. A 100 year Flood occurs on aver- Federally age once every 100 years, but may not occur in 1,000 years or may occur in successive years. Other types of flooding, such as dam failure, are not considered in developing these zones. In some cases, the insurance requirement may be waived or modified by obtaining a 'Letter of Map Revision' (LOMR) or 'Letter of Map Amendment" (LOMA) from the Federal Emergency Management Agency (FEMA). This might be possible where flooding is shallow and fill was placed on the site, appropriate flood control measures were taken, or only the lot and no part of the structure is in the zone. Contact FEMA directly for more information. Flood insurance for properties in Zones B, C, X or D is available but is not required. Zones A, AD, AE, AH, Al-A30:Area of "100-year, flooding - a 1% or greater chance of annual flooding. Zones V, VI-V30: Area of'100-year' flooding in coastal (shore front) areas subject to wave action. Zone B: Area of moderate flood risk These are areas between the'100- and'500- year flood -risk levels. Zones X: An area of moderate to minimal flood risk Zones C, D: NOT IN an area of'100 year flooding. Area of minimal (Zone C) or undetermined (Zone D) flood hazard. AREA OF POTENTIAL FLOODING (DAM FAILURE) These areas are subject to potential flooding 'in the event of a sudden and total failure of a dam and injury could occur as a result. Most areas are defined assuming an instantaneous dam failure with a full reservoir. However, dams rarely fail instantaneously and reservoirs are not always filled to capacity. Not all dams in the state have inundation zones mapped. There may be exceptional conditions where such a map was not required by the DES; therefore, the zones are not delineated. i VERY HIGH VHFHSZs are defined by the California Del 'Local Responsibility Areas- where fire sul Properties may have a higher risk for fire of replacement of existing roofs. In addition, tht vegetation clearance around and above the roofs, and other basic fire -safety practices exceptions. HAZARD SEVERITY ZONE (VHFHSZ) rrtment of Forestry and Fire Protection (CDF) and local fire authorities in rression is the responsibility of a local fire department. In these zones mage and are required to have a 'Class A' roof for new construction or property must be maintained in a fire-resistant condition through adequate structure, spark screens on chimneys and stovepipes, leaf removal from Contact your fire department for a complete list of requirements and Page 4 of 10 'F Geologists 321 Warren Avenue Fremont CA 94539 500.748.5233 rep. rts@lcp-inc.corn www.ioDrewrts.com kn004 JCPc. COI1 mercial Natural Hazard Disclosure Report Property Address: 4855 E 52Nd PI, Vernon, Los Angeles County, CA 90040 APN: 6314 020 003 Report Number: 2004111600076 Date: 11/16/2004 WILDLAND FIRE AREA (STATE RESPONSIBILITY AREA) A wildland area where the CDFs fire protection services are responsible lot suppressing fires is called a "State Responsibility Area' (SRA). These are generally rural areas where a significant wildland fire potential exists. Unless the county has assumed the fire suppression responsibility or has an agreement with a local fire agency, property owners in an SRA are responsible for organizing structural fire protection services. Such information is not available on maps; therefore, it can't be provided here. For very isolated properties with no local fire services there may be significant fire risk or only seasonal fire services. Property owners in an SRA are required to maintain adequate vegetation clearance around and above the structure, spark screens on chimneys and stovepipes, and other basic fire -safety practices. Contact your fire department for a complete list of requirements and exceptions. EARTHQUAKE FAULT ZONE Earthquake Fault Zones are delineated and adopted by California as part of the Alquist-Priolo Earthquake Fault Zone Act of 1972. Property in an Earthquake Fault Zone does not necessarily have a fault trace existing on the site. Earthquake Fault Zones are areas or bands delineated on both sides of known active earthquake faults. In some places, the zones are more than one -quarter of a mile wide. The potential for "fault rupture' damage (ground cracking along the fault trace) i5 relatively high only lt a structure is located directly on a fault trace. If a structure is not on a fault trace, shaking will be the primary effect of an earthquake. During a major earthquake, shaking will be strong in the vicinity of the fault and may be strong at some distance from the fault depending on soil and bedrock conditions. It is generally accepted that property constructed wood -frame houses are resistant to shaking damage. SEISMIC HAZARD MAPPING ACT ZONE Seismic Hazard Zone maps delineate areas subject to earthquake hazards. New development in a Seismic Hazard Zone is only permitted if it can be shown that mitigation makes the site acceptably safe. Maps are only available for limited areas now, but will eventually cover all of California. The hazards addressed are or will be: liquefaction, enhanced ground shaking, earthquake induced landslides, and various other ground failures. The first release of maps only addresses liquefaction and/or landslide zones. Liquefaction Hazard Zones are areas where there is a potential for, or an historic occurrence of liquefaction. Liquefaction is a rare soil phenomenon that can occur when loose, water saturated, fine-grained sands, and silty sands that lie within 50 feet of the ground surface, are shaken in a significant earthquake. The soil temporarily becomes liquid -like and structures may settle unevenly. Earthquake -Induced Landslide Hazard Zones are areas where then: has been a recent landslide, or where the local slope, geological, geotechnical, and ground moisture conditions indicate a potential for landslides as a result of earthquake shaking. LOS ANGELES COUNTY GEOLOGIC ZONES DISCUSSION Fault Zones • Active Faults: Several faults and fault segments not included as part of the Earthquake Fault Zone Act are considered active by the County. Zones from 1000 feet to 1.2 miles wide have been defined by the County around these faults. Properties in these zones are at some risk for fault rupture (surface cracking along the fault) • Potentially Active Faults: Faults active in the last 750.000 years but with no historical activity (past 10,000 years) are considered 'potentially active' by Los Angeles County. Zones from 1000 feet to 1.2 miles wide have been defined by the County around these faults. Properties in these zones may be at some risk for fault rupture, but the risk is probably lower than that for active faults. • Conditionally Active Faults: Faults active between 750,000 and 2,000,000 years ago are considered 'conditionally active' by Los Angeles County. Properties located directly on one of these faults are at an undetermined but relatively small risk of rupture. Page 5 of 10 CP Geologists .\,:.... c�a.. i. JCPGeologist Commercial Natural Hazard Disclosure Report Property Address: 4855 E 52Nd Pi, Vernon, Los Angeles County, CA 90040 APN: 6314 020 003 Report Number: 2004111600076 Date: 11/16/2004 • Slope Stability Zones The County Safety Element inventories landslides and slope stability hazards. The minimum sae of a slide is five acres, but clusters of slides may be shown as a single landslide. A delineated landslide is net a definitive statement Of a site's stability, ether now or in the future. Many slides are mitigated during development. For detailed stability information, a geotechnical consultant should be retained. • Hillside Areas: Areas subject to slope instability, particularly 9 slope gradients exceed 25 percent. If a PmPedy is in a designated 'Hillside Area,' it does not necessarily mean that landslides exist on the property or that landsliding Is imminent or probable. • Area Impacted by Storm -Induced Landsliding: Areas that experienced storm -induced shallow landsliding during the particulady wet years of 1969, 1978, and 1980 have been delineated on the maps. • Area Impacted by Mud and Debris Flooding: Areas that have experienced stone -induced shallow landsliding mud and debris flaws. Such flows may happen during periods of exceptionally high rainfall as that which occurred in 1969, 1978, and 1980. • Area of Shallow Surficial Landslides : These areas include regions in the Santa Monica and San Gabriel Mountains and the Puente Hills where abundant shallow landslides rimy occur. • trienfified Bedrock Landslide: These included definite and probable landslides ranging from five to hundreds of acres in sae. Liquefaction Zones -like soil condition which may occur during strong earthquake shaking it the groundwater is shallow and Liquefaction is a liquid the subsurface soils are loose and cohesionless! (such as sands). The factors can combine to produce liquefaction in certain local areas. . • Liquefiable Areas (Zone L): Groundwater is less than 30 feet deep in these areas, however, it does not necessarily mean that liquefaction will occur during earthquake shaking. This zone has a higher potential for liquefaction than other zones. • Potentially Liquefiable Areas (Zone PL): FlaFlying valley areas with a relatively low liquefaction potential. • Low Liquefaction Susceptibility (Zone LL): Flat to gently sloping areas with relatively low liquefaction potential. •Very Low Liquefaction Susceptibility (Zone VL): Areas underlain by bedrock not normally susceptible to liquefaction. Seismic Zones • Tsunami Inundation Area: This area has been designated as a zone of moderate risk for tsunami (seismic sea wave or 'tidal wave') run-up. The tsunami zone may be inundated by waves which recur on average of once every 500 years. • Dam Inundation Area: These may be subject to flooding in the event of dam failure. They are defined assuming an instantaneous dam failure with a full reservoir. However, dams rarely fail instantaneously and reservoirs are not always filled to capacity. CITY -LEVEL GEOLOGIC AND SEISMIC ZONES DISCUSSION This disclosure report reviews the officially adopted geologic hazard maps in the Safety Element that each incorporated city in Caldomia is required to include in its General Plan. The city the subject property is located in has either not officially adopted hazard zonation maps in its General Plan at an appropriate scale to delineate where hazards may exist on a single parcel basis or will not make such maps available outside city offices. However, potential natural hazards may exist and be delineated on other sources used by the city in its Planning, Engineering, or Building Departments. Such potential sources are not reviewed in this report. i All parties should be aware that Califomia is 'earthquake country." Faults that may exist in this City or in neighboring regions could cause earthquake shaking or other fault related phenomena at the property. Other geologic hazards such as, but not limited to liquefaction (a type of soil settling that can occur when loose, water -saturated sediments are shaken significantly in an earthquake) may occur in certain valley floor areas and landslides are a possibility in any hillside area. Page 6 of 10 =p Geologists 321 Warren Avenue Fremont CA 94539 800 748.5233 reports@jcp-inc.com WwwwortmOTIS.rAm ©2004 Ciommerciel Natural Hazard Disclosure Report Property Address: 4855 E 52Nd PI, Vernon, Los Angeles County, CA 90040 APN: 6314 020 003 Report Number: 2004111600076 Date: 11/16/2004 NOTE: County and city -level information sources are developed independently of each other and do not necessarily define or delineate hazards in the same way. A site can be in a geologic hazard zone according to the city and not in zone according to the county and vice versa. Cities and counties may use other information in addition to their General Plan sources to determine it hazards exist at a site or which silos may require geologic studies prior to new or additional construction. Such information could be a material fact to be disclosed in addition to General Plan information, Additional natural hazards may exist and be delineated on other sources used by the City in its Planning, Engineering, or Building Departments. Such potential sources are not reviewed in this report. To investigate other sources of natural hazard information that may be available and used at the city level, contact the city Engineering, Planning or Building Departments. • END OF LOCAL AREA DISCLOSURES AND DISCUSSIONS SECTION Page 7 of 10 CP Gleeiopists 321 'v r. of; A. cnue Wamonl I ru;J.748..1233 ,el- - , . P _ ' i =¢= ; JCPGeo!cci Commercial Natural Hazard Disclosure Report Property Address: 4855 E 52Nd Pi, Vernon, Los Angeles County, CA 90040 APN: 6314 020 003 Report Number: 2004111600076 Date: 11/16/2004 FORMER MILITARY ORDNANCE SITE DISCLOSURE Determination The subject property is NOT WITHIN one mile of a Formerly Used Defense (FUD) site containing military ordnance RAC Scoring: A risk assessment Procedure was developed by U.S. Army Corps of Engineers (USAGE) to prioritize the remedial actions at FUD sites. Each FUD site is given a Risk Assessment Code (RAC) score to describe the site status. The risk assessment is based on the best available information resulting from records searches, reports of Explosive Ordnance Dispose, (EOD) detachment actions, field observations, interviews, and measurements. The RAC is dependent on two factors: hazard severity and probability. Discussion FUD sties can include sties with common industrial waste (such as fuels), ordnance or other warfare materiel, unsafe structures to be demolished, or debris for removal. NOTE: most FUDS sites do not contain unexploded ordnance. California Civil Code 1102 requires disclosure of Nose sites containing unexploded ordnance. 'Military ordnance' is any kind of munitions, explosive device/matenal or chemical agent used in military weapons. Unexploded ordnance are munitions that did not detonate. Only those FUD sites that the USACE has identified to contain Military Ordnance or have mitigation projects planned for them are disclosed in this report. Additional sites may be added as military installations are released under the Base Realignment and Closure (BRAG) Act. Active military sites are NOT included on the FUDS list. Based on certain mapped Airport Influence Areas determined by a County Airpotl Lantl Use Commission, the determination can be made: The property IS NOT IN an Airport Influence Area . Discussion An 'airport influence area; also known as an `airport referral area; is the area in which current or future airport -related noise, over Bight, safety, or airspace protection factors may significantly affect land uses or necessitate restrictions on those uses as determined by an airport land use commission. JCP uses the current Airport Influence Area maps provided to us by County Airport Land Use Commissions. The inclusion of military and private airports varies by County and therefore, depending on the County, military and private airports may or may not be included in this disclosure. Page 8 of 10 P Geologists 321 Warren Avenue Fremont CA 94539 800.748.5233 reportsftp-mc.com www.icoreoorts.com 02004 Commercial Natural Hazard Disclosure Report Property Address: 4655 E 52Nd PI, Vernon, Los Angeles County, CA 90040 APN: 6314 020 003 Report Number: 2004111600076 MOLD ADVISORY Date: 11/16/2004 The Buyer is hereby advised that naturally occurring molds may exist both inside and outside of any home and may not be visible to casual inspection. Persons exposed to extensive mold levels can become sensitized and develop allergies to the mold or other health problems. Extensive mold growth can damage a structure and its contents. All prospective purchasers of residential and commercial property are advised to thoroughly inspect the subject property for mold. Be sure to inspect the property inside and out for sources of excess moisture, current water leaks and evidence of past water damage. For molds to grow, and reproduce, they need only a food source - any organic material, such as leaves, wood, paper, or dirt and moisture. Because molds grow by digesting the organic material, they gradually destroy whatever they grow on. Mold growth on surfaces can often be seen in the form of discoloration, frequently green, gray, brown, or black but also white and other colors. As part of a buyers physical inspection of the condition of a property, the buyer may consider engaging an appropriate and qualified professional to inspect and test for the presence of harmful molds and to advise the buyer of any potential risk and options available. This adv'sory is not a disclosure of whether harmful mold conditions exist at a Property or not. JCP Geolooists has not performed testing or inspections of any kind. Any use of this form is acknowledgement and acceptance that JCP does not disclose, warrant or indemnify mold conditions at a property in any way and is not responsible in any way for mold conditions that may exist. Information is available from the California Department of Health Services Indoor Air Quality Section fact sheet entitled, 'Mold in My Home: What Do I Do?' The fact sheet is available at www.mI-iaq.org or by calling (510)540-2476. The Toxic Mold Protection Act of 2001 requires that information be developed regarding the potential issues surrounding naturally occurring molds within a home. Information was written by environmental authorities for inclusion in the Environmental Hazards: A Guide for Homeowners, Buyers, Landlords and Tenants booklet developed by the Califomia Environmental Protection Agency and the Department of Heath Services. It is found in Chapter VI of that booklet, and includes references to sources for additional information. - For local assistance, contact your County or City Department of Health, Housing, or Environmental Health. CONFIRMATION OF COVERAGE AND INDEMNIFICATION JCP Geologists has prepared a Natural Hazard Disclosure Report for the subject property identified above. This Confirmation of Coverage Statement applies only to the current transaction for which this JCP report was prepared, as of the date this report was prepared. This statement is confirmation that JCP Geologists is included as an insured under a $20 million Professional Liability policy for errors & omissions arising from the services JCP performs. Coverage, which is subject to specific terms and conditions in the policy, is provided for damages JCP is obliged to pay as a result of its negligent acts, errors or omissions arising out of its Natural Hazard Disclosure Professional Services provided for the above referenced residential property as of the date this report was prepared. JCP's Professional Liability insurance policies contain an agreement which, subject to the specific terms and conditions contained in the policy, indemnifies and provides defense of the Clients of JCP against claims caused by the negligent acts, errors or omissions of JCP that fall within the scope of a contractual indemnification obligation of JCP to its Clients. For this purpose, Clients of JCP are the contractual parties to this transaction and their respective real estate agents for which JCP has provided professional services. Date: 11/16/2004 By: JCP Geologists Page 9 of 10 ICP Geolo_nct . -1.. - _ =" XplGeologists COfT Mercial Natural Hazard Disclosure Report Property Address: 4855 E 52Nd PI, Vernon, Los Angeles County, CA 90040 APN: 6314 020 003 Report Number: 2004111600076 Date: 11/16)1 JCP Geologists (JCP) Provides this Commercial Natural Hazard Disclosure Report as a disclosure of certain mantlaled natural hazard information and b us missem of certain Seller provided disclosures. It provides he investor with an early 11 mrshcost-Maud guide la rat in due digenco commitments or decision making Prior, to entering the purchase negotiations for o prospective property asset. Use of his report is acknowledgement of and agreement to abide by all Terms arM conditions set forth in this report The report is specifically prepared for the lark parcels) identified by Assessor Parcel Numbers) (APN's) or developers Tract and Lot numbers supplied to JCP by the client (or reasonably Inferred from current owner information it that was suPPlied instead). In Me event hat Me Parcel identification provided us is incomplete, Me subject Property sis assumed to comprise a single lark parcel and is identified for he purposes of his report by the conesponding single APN. All parties understand that he information provided in the disclosures does to any other assessors Parcel number oher Ian those identified in his repod. not apply For Me Natural Hazard Disclosures, JCP examines only the Waving maps: (a) NFIP Flood Insurance Rate Maps, (b) California Office of Emergency Services Dam Failure Inundation maps, (c) AB 6. Real Estate: dsciowre (CDF) maps, (d) Alquist-Prmlo Earthquake Fault Zone maps, (e)Califomta Seismic Hazards Mapping Act maps (where available) (Q ) certain LOMR's on LOMA's (not all that exist may be available to JCP), (g)cedain natural hen and Safety Element maps adopted by he county as part of its General Plan's Safety Element, (h) gadogic and seismic hazard maps adopted by the city as a part of its General Plan's Safety Element only for location of Me above property as identified by the seller or sellers agent. JCP relies on Mesa pfficial sources for the information in Iis report and does not produce, maintain or verify he information. Other hazaml or disclosure Information that may exist in a itinsdctional Safety Element, General Plan or any other source is not Provided in this report. The following procedures and Ii nda"Ohe apply to all of he disclosures on all pages of this report. Our services include, where appropriate, use of he assessors mils, dasbal-type maps, Photographic enlargements of maps and various cartographic tecMtquas to locale the site on the appropriate map. Them determination is made as accurately as reasonably possible using these Mid maps. For Purposes of defining property lines, Me assessors parcel number and parcel maps are used. Any errors in he assessors rolls may affect thedetermination procedures and JCP will not be liable for such errors Decisions by jurisdictions relative to required studies, reports, etcmay be mad. using he information disclosed in this report, as well as other Information in that, files andror local ordinances and procedures. Additional information which may be material to this transaction may ever in other sources not used in Iis report; however, research of such Possible sources of the information in such sources is beyond he scope of this report and will not be reported here. The disclosure Information in this report cannot be condoned as a substitute for a geologic or engineering study her that a city or county will not require such studies. NO visual examination of the subject site was Performed her was a study of any judsdlction's files or other sources made to determine Me existence of any hazard which may exist on he site. This repon is for Me pupates of certain map -based, mal estate transaction disclosures only and is nor a substitute for the baker/agent property Inspection. Due to changes disclosure maps, laws and contractual pales, his repod cannot be relied upon for other properties or for future transactions of he subject property. All parties should be aware hat the information is sublecr to change. JCP is net responsible for tunetradvising pales of any charges Thal may occur atler the date of Iis report. Upon request within six months of issuing this report, JCP will update ha report for no additional charge for he same transaction. All representations regarding earthquake safety, water heater bracing, and title insurance presented In this report are provided for the buyer's convenience by the seller(s) or agent(.) of the subject property. JCP has not validated this information and takes no responsibility for its accuracy. If any Party to this transaction has concerns relative to the stability or condition of the property or if "red flags" are observed during any party s inspection, we suggest that a consultant be retained to study Me site and render an opinion. This report to provided for the single property for which it was issued as seller(.), their agent(.), and potential buyers of of the date of this report, and has been prepared for the exclusive use of the current thisProperty. :j contain auHicienl information for the purposes of otherr Parties or otherr uses. Our pro are not intended esalonal sefor use rvices parties and may not ices are Performed using a .I degree of care and skill ordinarily exercised under similar circumstances by reputable consultants. No other warranty, expressed or Implied, is made as to the professional advice present" In this report. i Page to of to 1f' Geologists 321 N/o ren Avenue Fremont CA 94539 800.748.5233 reports@ico-inc.com www.icnrpnnrtc rnm rwnne Commercial Natural Hazard Disclosure Report Property Address: 4855 E 52Nd PI, Vernon, Los Angeles County, CA 90040 APN: 6314 019 009 Report Number: 200411160DO74 Date: 11/16/2004 ELLER ACKNOWLEDGEMENT AND DISCLOSURES wassail This section Is provided for the Seller's convenience in provding certain disclosures that may be applicable to the property and this transaction. This section is to be completed by the seller or their agent and provided to the purchaser. The following disclosures are provided by: ❑ Seller or ❑ Seller(s) Agent ❑ Seller or ❑Seller(s) Agent Date Seller Disclosure - Earthquake Safety This structure was built prior to 1975 and has walls of (i) pre -cast (e.g. tilt -up) concrete or reinforced masonry together with wood frame floors or roofs or is Constructed of (ii) un-reinforced masonry Yes _ No _ . Do not know _ If (1) the improvements on the property were constructed prior to 1975, and (2) said improvements include structures with (I) precast (e.g. lift -up) concrete or reinforced masonry walls together with wood frame floors or roofs or III) un-reinforced masonry walls, Buyer must be provided with a copy of the Commercial Property Owner's Guide to Earthquake Safety (copy included with this report) published by the California Seismic Safely Commission (California Government Code §8893 at seri This booklet explains that owners of un-reinforced masonry buildings in Seismic Zone 4 (most of California) who have received notice that their buildings have bad -bearing un-reinforce masonry walls must post their buildings With signs warning that they may be unsafe in an earthquake (California government Code §8875.8). This information is provided by the Seller or Broker. JCP has not validated this information in any way and takes no responsibility for its accuracy. Seller Disclosure - Water Heater Bracing Installation Yes _ No _ Do not know _ No Free Standing Water Healer If the property contains one or more water heaters, Seller is required by California Health and Safety Code §1Slit 1 to certify to the Buyer that all such water heaters have been braced, strapped andfor anchored in accordance with law. This water heater bracing installation information is provided by the Seller or Broker. JCP has not validated this information in any way and takes no responsibility for its accuracy. Seller Disclosure - Title Insurance is provided by the Purchase Agreement. Yea _ No _ Do not know This Title Insurance information is provided by the Seller or Broker. JCP has not validated this information in any way and takes no responsibility for its accuracy. In the event that the Purchase Agreement does not at present provide that title insurance will be obtained, Buyer is strongly urged to consider purchasing such insurance, and, in accordance with California civil Code §1057.6, is advised as follows: IMPORTANT: IN A PURCHASE OR EXCHANGE OF REAL PROPERTY, IT MAY BE ADVISABLE TO OBTAIN TITLE INSURANCE IN CONNECTION WITH THE CLOSE OF ESCROW SINCE THERE MAY BE PRIOR RECORDED LIENS AND ENCUMBRANCES WHICH AFFECT YOUR INTEREST IN THE PROPERTY BEING ACQUIRED. A NEW POLICY OF TITLE INSURANCE SHOULD BE OBTAINED END SELLER'S DISCLOSURES. BEGIN REPORT RECEIPT AND ADDITIONAL THIRD PARTY DISCLOSURES A BUYER(S)ACKNOWLEDGEMENT =_ I(WE) HAVE READ AND UNDERSTOOD THE ABOVE SELLER'S DISCLOSURES AS WELL AS THE NATURAL HAZARD, MILITARY ORDNgl10E�PORINFLUENCE A �el DISCLOSURES, AND MOOLLy ADVISORY CONTAINED IN THIS REPORT. yV// 1 1/ February 3, 2005 Signature of Buyer Bruce V. Malkenhorst, City Date Administrator/City Clerk (City of Vernon) Signature of Buyer Dale Page 1 of 10 -%. JCPGeologists CommePClai Natural Hazard Disclosure Report Property Address: 4855 E 52Nd PI, Vernon, Los Angeles County, CA 90040 APN: 6314 019 009 Report Number: 2004111600074 Date: 11/16/2004 THE SUBJECT REAL PROPERTY LIES WITHIN THE FOLLOWING AREA(S): 1. A SPECIAL FLOOD HAZARD AREA (Any type Zane "A" or -W) designated by the Federal Emergency Management Agency. Yes _ No X Do not know am inkarreu1g1 not available Imm local jurisdiction _ JCP determination based on the officially adopted maps: Community, is NOT participating in the National Flood Insurance Program. No panel available. a uwn on a earn failure mundatlo Yes X No Do not know and informn mappursuant to ation not available here local jurisdiction o me ovemmenl Cade. JCP determination based on the Officially adopted maps: In an Area of Potential Flooding Caused By Failure according to the maps adopted by The Stale of California Office of Emergency Services. Refer to the ezplttion section below for more information on this zone. I Property is subject to the maintenance requirements of Section 51182 of the Gove Or e, i Codel Yes_ No % JCP determination based on the officially clopted maps: NOT in an area of Very High Fire Hazard Severity Zone as defined on the State level maps (Gov Code 51178). A local agency may exclude or include additional fire zones at their option. Concerned parties should contact their local fire services for more information. 4. A WILDLAND AREA THAT MAY CONTAIN SUBSTANTIAL FOREST FIRE RISK AND HAZARDS pursuant to Section 4125 of the Public Resources Code. The .net of this Property is subject to the maintenance requirements of Section 4291 of the Public Resources Code. Additionally, it is not the Slate's responsibility to provide fire protection services to any building or structure located within the Oldiands undess the Department of Forestry and fre Preactlon has entered into a cooperative agreement with a local agency for those Purposes pursuant to Section 4142 of the Public Resources Code. Yes_ No X JCP determination based on the officially dopled maps: NOT in an official Slate Responsibility Area. Fire protection services for structures in this area are provided by local fire departments. Page 2 of 10 Geologists 321 VVBren Avenue Relnnnt CA 94539 800.748-5233 reuortsGIcp-inccom www.icpreoortscom C':2004 i Commercial Natural Hazard Disclosure Report Property Address: 4855 E 524d PI, Vernon, Los Angeles County, CA 90040 APN: 6314 019 D09 Report Number: 2004111600074 Date: 11/16/2004 S. AN EARTHOUAKE FAULT ZONE pursuant Io Section 2622 of the Public Resources Code. Yes_ No X JCP determination based on the officially adopted maps: NOT in an official Earthquake Fault Zone. There are no mapped active fault traces on the property. See the Alquist-Paolo Earthquake Fault explanation section for additional information. 6. A SEISMIC HAZARD ZONE pursuant to Section 2696 of the Public Resources Code. Yes (Landslide Zone) _ Yes (Liquefaction Zone) X No— Map not yet released by state _ JCP determination based on the officially adopted maps: In an Official Seismic Hazard Zone. Located in a Liquefaction Hazard Zone, Other Seismic Hazards that may eventually be addressed on these maps have not yet been evaluated for Los Angeles County. 7. County Level Geologic and Seismic Zone Information Based on the officially adopted natural hazard maps in the County's General Plan, the site is: NOT in a zone of high geologic hazard. Located on surticial alluvial materials of Low Liquefaction Susceptibility (Zone LL). Liquefaction is a loss of ground strength that may occur during strong earthquake shaking. Although large areas of the County have a potential for liquefaction, the phenomena rarely occurs. Also located in a dam inundation area. S. City Level Geologic Hazard Zone Determination Based on the officially adopted natural hazard maps In the City's General Plan, the site is: Located in either an unincorporated area of the County or does not have officially adopted mapped information available to us at this time from which a geologic determination can be made. Page 3 of 10 04 JCPGeologists M_ Commercial Natural Hazard Disclosure Report Property Address: 4855 E 52Nd PI, Vernon, Los Angeles County, CA 90040 APN: 6314 019 009 Report Number: 2004111600074 Date: 11/16/2004 The descriptions, explanations and natural hazard disclosures provided in this report are not intended to be full and complete disclosures of all possible hazards and their effects to the Buyer and/or the property. Identified natural hazards and any others that may exist but are not,addressed in this report may limit the ability to develop the real property, to obtain insurance, or to receive assistance after a disaster. In the event this document indicates the property is affected by one or more natural hazards, buyers) and seller(s) are advised to: 1. Review the applicable laws in their entirety. 2. Seek advice of counsel as to any legal consequences of the disclosed items. 3. Retain appropriate consultants to review and investigate the impact of said disclosures,. On -site inspections and/or due diligence assessments by appropriately licensed engineers and experts are recommended prior to completing a real estate, loan, or insurance transaction. SPECIAL FLOOD HAZARD AREA Property in a Special Flood Hazard Area 'A' or -W is subject to flooding in a '100-year minstomu' Federally connected lenders are required to have homeowners maintain flood insurance in these zones. A 100-year flood occurs on average once every 100 years, but may not occur in 1,000 years or may occur in successive years. Other types of flooding, such as dam failure, are not considered in developing these zones. In some cases, the insurance requirement may be waived or modified by obtaining a 'Letter of Map Revision' (LOMR) or 'Letter of Map Amendment' (LOMA) from the Federal Emergency Management Agency (FEMA). This might be possible where flooding is shallow and fill was placed on the site, appropriate flood control measures were taken, or only the lot and no part of the structure is in the zone. Contact FEMA directly for more information. Flood insurance for properties in Zones B, C. X or D is available but is not required. Zones A, AO, AE, AH, At-A30:Area of "100-year' flooding - a 1% or greater chance of annual flooding. Zones V, V7-V30: Area of'100-year flooding in coastal (shore front) areas subject to wave action. Zone B: Area of moderate flood risk. These are areas between the'100" and "500' year flood -risk levels. Zones X: An area of moderate to minimal flood risk Zones C, D: NOT IN an area of'100-year• flooding. Area of minimal (Zone C) or undetermined (Zone D) flood hazard. AREA OF POTENTIAL FLOODING (DAM FAILURE These areas are subject to potential flooding gI in the event of a sudden and total failure of a dam and injury could Occur as a result. Most areas are defined assuming an instantaneous dam failure with a full reservoir. However, dams rarely fail instantaneously and reservoirs are not always filled to capacity. Not all dams in the state have inundation zones mapped. There may be exceptional conditions where such a map was not required by the OES; therefore, the zones are not delineated. VERY HIGH FIRE HAZARD SEVERITY ZONE (VHFHSZ) VHFHSZs are defined by the California Department of Forestry and Fire Protection (CDF) and local fire authorities in 'Local Responsibility Areas' where fire suppression is the responsibility of a local fire Department. In these zones Properties may have a higher risk for fire damage and are required to have a 'Class A" roof for new construction or replacement of existing roofs. In addition, the property must be maintained in a lire -resistant condition through adequate vegetation clearance around and above the structure, spark screens on chimneys and stovepipes, roofs, and other basic fire -safety practices. Contact your fire department for a complete list of leaf removal from requirements and exceptions. Page 4 of 10 ")P Geologists 321 Warren .Avenue Fremont CA 94539 800748.5233 reports Y?iCD-1nccom www.icoraoorls.com l02004 Commercial Natural Hazard Disclosure Report Property Address: 4855 E 52Nd PI, Vernon, Los Angeles County, CA 90040 APN: 6314 019 009 Report Number: 2004111600074 Date: 11/16/2004 WILDLAND FIRE AREA (STATE RESPONSIBILITY AREA) A wildland area where the CDF's lire protection services are responsible for suppressing fires is called a'Slale Responsibility Area' (SRA). These are generally rural areas where a significant wildland lire potential exists. Unless the county has assumed the fire suppression responsibility or has an agreement with a local lire agency, property owners in an SRA are responsible for organizing structural fire protection services. Such information is not available on maps; therefore, ff can't be provided here. For very isolated properties with no local fire services there may be significant lire risk or only seasonal fire services. Property owners in an SRA are required to maintain adequate vegetation clearance around and above the structure, spark screens on chimneys and stovepipes, and other basic fire -safety practices. Contact your fire department for a complete list of requirements and exceptions. EARTHQUAKE FAULT ZONE Earthquake Fault Zones are delineated and adopted by California as part of the Alquist-Priolo Earthquake Fault Zone Act of 1972. Property in an Earthquake Fault Zone does not necessarily have a fault trace existing on the site. Earthquake Fault Zones are areas or bands delineated on both sides of known active earthquake faults. In some places, the zones are more than one -quarter of a mile wide. The potential for "fault rupture' damage (ground cracking along the fault trace) is relatively high only I a structure is located directly on a fault trace. It a structure is not on a fault trace, shaking will be the primary effect of an earthquake. During a major earthquake, shaking will be strong in the vicinity of the fault and may be strong at some distance from the (suit depending on soil and bedrock conditions. It is generally accepted that property constructed wood -frame houses are resistant to shaking damage. SEISMIC HAZARD MAPPING ACT ZONE Seismic Hazard Zone maps delineate areas subject to earthquake hazards. New development in a Seismic Hazard Zone is only permitted ff it can be shown that mitigation makes the site acceptably sale. Maps are only available for limited areas now, but will eventually cover all of California. The hazards addressed are or will be: liquefaction, enhanced ground shaking, earthquake induced landslides, and various other ground failures. The first release of maps only addresses liquefaction and/or landslide zones. .. -.. Liquefaction Hazard Zones are areas where there is a potential for, or an historic occurrence of liquefaction. Liquefaction is a rare soil phenomenon that can occur when loose, water saturated, fine-grained sands, and silly sands that lie within 50 feet of the ground surface, are shaken in a significant earthquake. The soil temporarily becomes liquid -like and structures may settle unevenly. Earthquake -Induced Landslide Hazard Zones are areas where them has been a recent landslide, or where the local slope, geological, geotechnical, and ground moisture conditions indicate a potential for landslides as a result of earthquake shaking. LOS ANGELES COUNTY GEOLOGIC ZONES DISCUSSION Fault Zones • Active Faults: Several faults and fault segments not included as part of the Earthquake Fault Zone Act are considered active by the County. Zones from 1000 feet to 1.2 miles wide have been defined by the County around these faults. Properties in these zones are at some risk for fault rupture (surface cracking along the fault) • Potentially Active Faults: Faults active in the last 750.000 years but with no historical activity (past 10,000 years) are considered 'potentially active' by Los Angeles County. Zones from 1000 feet to 1.2 miles wide have been defined by the County around these faults. Properties in these zones may be at some risk for fault rupture, but the risk is probably lower than that for active faults. • Conditionally Active Faults: Faults active between 760,000 and 2,000,000 years ago are considered 'conditionally active" by Los Angeles County. Properties located directly on one of these faults are at an undetermined but relatively small risk of rupture. Page 5 of 10 OP Geologists JCP1 Geologists =ems=_... _ __ Commercial Natural Hazard Disclosure Report Property Address: 4855 E 52Nd PI, Vernon, Los Angeles County, CA 9OG40 APN: 6314 019 009 Report Number: 2004111600074 Date: 11/16/2004 • Slope Stability Zones The County Safety Element inventories landslides and slope stability hazards. The minimum size of a slide is five acres, but clusters of slides may be shown as a single landslide. A delineated landslide is not a definitive statement of a site's stability, either now or in the future. Many slides are mitigated during development. For detailed stability information, a geotechnical consultant should be retained. • Hillside Areas: Areas subject to slope instability, particulady if slope gradients exceed 25 percent. If a property is in a designated "Hillside Area,' it does not necessarily mean that landslides exist on the property or that landsliding is imminent or probable. • Area Impacted by Stom 4nduced Landslfding: Areas that experienced storm -induced shallow landsliding during the particulady wet years of 1969, 1978, and 1980 have been delineated on the maps. • Area Impacted by Mud and Debris Flooding: Areas that have experienced stone -induced shallow landsliding mud and debris flows. Such flows may happen during periods of exceptionally high rainfall as that which occurred in 1969, 1978, and 1980. • Area of Shallow Sudicial Landslides: These areas include regions in the Santa Monica and San Gabriel Mountains and the Puente Hills where abundant shallow landslides may Occur. • Identified Bedrock Landslide: These included definite and probable landslides ranging from five to hundreds of acres in size. Liquefaction Zones Liquefaction is a liquid -like soil condition which may occur during strong earthquake shaking a the groundwater is shallow and the subsurface soils are loose and cohesionlesw (such as sand,). The factors can combine to Produce liquefaction in certain local areas. • Liquefiable Areas (Zone L): Groundwater is less than 30 feet deep in these areas, however, it does not necessarily mean that liquefaction will occur during earthquake shaking. This zone has a higher potential for liquefaction than other zones. • Potentially Liquefiable Areas (Zone PL): Flat -lying valley areas with a relatively low liquefaction potential. • Low Liquefaction Susceptibility (Zone LL): Flat to gently sloping areas with relatively low liquefaction potential. • Very Low Liquefaction Susceptibility (Zone VL): Areas underlain by bedrock not normally susceptible to liquefaction. Seismic Zones • Tsunami Inundation Area: This area has been designated as a zone of moderate risk for tsunami (seismic we wave or'lidal wave') run-up. The tsunami zone may be inundated by waves which recur on average of once every 500 years. • Dam Inundation Area: These may be subject to flooding in the event of dam failure. They are defined assuming an instantaneous dam failure with a full reservoir. However, dams rarely fail instantaneously and reservoirs are not always filled to capacity CITY -LEVEL GEOLOGIC AND SEISMIC ZONES DISCUSSION This disclosure report reviews the officially adopted geologic hazard maps in the Safety Element that each incorporated city in California is required to include in its General Plan. The city the subject property is located in has either not officially adopted hazard zonation maps in its General Plan at an appropriate scale to delineate where hazards may exist on a single Parcel bass or will not make such maps available outside city offices. However, are not reviewed in this report. potential natural hazards may exist and be delineated on other sources used by the city in its Planning, Engineering, or Building Departments. Such potential sources All parties should be aware that California is 'earthquake country.- Faults that may exist in this City or in neighboring regions could cause earthquake shaking or other fault related phenomena at the property. other geologic hazards such as, but not limited to liquefaction (a type of soil sealing that can occur when loose, water -saturated sediments are shaken significantly in an earthquake) may occur in certain valley floor areas and landslides are a possibility in any hillside area. Page 6 of 10 ,� Geologists 321 Warren Avenue Fremont CA 94539 800.748.5233 reports@jcp-inc.com www.ICprepOrts.com 02004 JCPGenJo'-jists commeFCl81 Natural Hazard Disclosure Report Property Address: 4855 E 52Nd PI, Vernon, Los Angeles County, CA 90040 APN: 6314 019 009 Report Number: 2004111600074 Date: 11/16/2004 NOTE: County and city -level information sources are developed independently of each other and do not necessarily define or delineate hazards in the same way. A site can be in a geologic hazard zone according to the city and not in zone according to the county and vice versa. Cities and counties may use other information in addition to their General Plan sources to determine if hazards exist at a site or which sites may require geologic studies prior to new or additional construction. Such information could be a material lad to be disclosed in addition to General Plan information. Additional natural hazards may exist and be delineated on other sources used by the City in its Planning, Engineering, or Building Departments. Such potential sources are not reviewed in this report. To investigate other sources of natural hazard information that may be available and used at the city level, contact the city Engineering, Planning or Building Departments. END OF LOCAL AREA DISCLOSURES AND DISCUSSIONS SECTION Page 7 of 10 :P Geologists 321 b8u, i - ;.'nu? F1erun,t i n tp R, JCp'eol0gi6t3 Commercial Natural Hazard Disclosure Report Property Address: 4855 E 52Nd PI, Vernon, Los Angeles County, CA 90040 APN: 6314 019 009 Report Number: 2004111600074 Date: 11116/2004 Determination The subject property is WITHIN one mile of a Fonnedy Used Defense (FUD) she containing military ordnance. Los Angeles Ordnance Depot RAC: 4 Two locations were used in the 1940's, the primary location was used as an ordnance depot. RAC Scoring: A risk assessment procedure was developed by U.S. Army Corps of Engineers (USACE) to prioritize the MITI actions at FUD sites. Each FUD she is given a Risk Assessment Code (RAC) more to describe the site status. The risk assessment is based on the best available information resulting from records searches, reports of Explosive Ordnance Disposal (EOD) detachment actions, field observations, interviews, and measurements. The RAC is dependent on two factors: hazard severity and probability. Discussion FUD sites can include sites with common industrial waste (such as fuels), ordnance or other warfare materiel, unsafe structures to be demolished, or debris for removal. NOTE: most FUDS sites do not contain unexploded ordnance. California Civil Code 1102 requires disclosure of those sites containing unexploded ordnance. 'Military ordnance' is any kind of munitions, explosive device/material or chemical agent used in military weapons. Unexploded ordnance are munitions that did not detonate. Only those FUD sites that the USACE has identified to contain Military Ordnance or have mitigation projects planned for them are disclosed in this report, Additional sites may be added as military installations are released under the Base Realignment and Closure (BRAC) Act. Active military sites are NOT included on the FUDS list. Based on certain 11pped made: Airport Influence Areas determinination can be maddetermined by a County Airpon Land Use Commission, the follawinn The property IS NOT IN an Airport Influence Area . Discussion An 'airport influence area,' also known as an 'airport referral area,' is the area in which current or future airport -related noise, over flight safety, or airspace protection factors may significantly affect land uses or necessitate restrictions on those uses as determined by an airport land use commission. JCP uses the current Airport Influence Area maps provided to us by County Airport Land Use Commissions. The inclusion of military and private airports varies by County and therefore, depending on the County, military and private airports may or may not be included in this disclosure. Page 8 of 10 ••-7P Geologists 321 warren Avenue Fremont CA 94539 800,748.5233 reportsi�ico-inc.com w•ww.icnreoortscom @2004 JCP,: Commercial Natural Hazard Disclosure Report Property Address: 4855 E 52Nd PI, Vernon, Los Angeles County, CA 90040 APN: 6314 019 009 Report Number: 2004111600074 Date: 11/16/2004 The Buyer is hereby advised that naturally occurring molds may exist both inside and outside of any home and may not be visible to casual inspection. Persons exposed to extensive mold levels can become sensitized and develop allergies to the mold or other health problems. Extensive mold growth can damage a structure and its contents. All prospective purchasers of residential and commercial property are advised to thoroughly inspect the subject property for mold. Be sure to inspect the property inside and out for sources of excess moisture, current water leaks and evidence of past water damage. For molds to grow and reproduce, they need only a food source - any organic material, such as leaves, wood, paper, or dirt and moisture. Because molds grow by digesting the organic material, they gradually destroy whatever they grow on. Mold growth on surfaces can often be seen in the form of discoloration, frequently green, gray, brown, or black but also white and other colors. As pad of a buyees physical inspection of the condition of a properly, the buyer may consider engaging an appropriate and qualified professional to inspect and test for the presence of harmful molds and to advise the buyer of any potential risk and options available. This advm— m _.._...... ,,.,,.,,, u, „s -nuns or anv xina. Any use of this tone is acknowledgement and acceptance that JCP does not disclose, warrant or indemnify mold conditions It a property in any way and is not responsible in any way for mold condilions that may exist. Information is available from the California Department of Heakh Services Indoor Air Quality Section fact sheet entitled, 'Mold in My Home: What Do I Do?' The fact sheet is available at www.cal-iaq.org or by calling (510)540-2476. The Toxic Mold Protection Act or 2001 requires that information be developed regarding the potential issues surrounding naturally occurring molds within a home. Information was written by environmental authorities for inclusion in the EnviEnvironmental Protmental aection Agency and the Department of He�hoervices. Itrds and s found nants klet C Chapter that by he California booklet, and Includes references to sources for additional information. For local assistance, contact your County or City Department of Health, Housing, or Environmental Health. JCP Geologists has prepared a Natural Hazard Disclosure Report for the subject property identified above. This Confirmation of Coverage Statement applies only to the current transaction for which this JCP report was prepared, as of the date this report was prepared. This statement is confirmation that JCP Geologists is included as an insured under a $20 million Professional Liability policy for errors & omissions arising from the services JCP performs. Coverage, which is subject to specific terms and conditions in the policy, is provided for damages JCP is obliged to pay as a result of its negligent acts, errors or omissions arising out of its Natural Hazard Disclosure Professional Services provided for the above referenced residential property as of the date this report was prepared. JCP's Professional Liability insurance policies contain an agreement which, subject to the specific terms and conditions contained in the policy, indemnifies and provides defense of the Clients of JCP against claims caused by the negligent acts, errors or omissions of JCP that fall within the scope of a contractual indemnification obligation of JCP to its Clients. For this purpose, Clients of JCP are the contractual parties to this transaction and their respective real estate agents for which JCP has provided professional services. Date: 11/16/2004 Ely: JCP Geologists Page 9 of 10 :P Geologists 321 1A ax JCPGeologists Commercial Natural Hazard Disclosure Report Property Address: 4855 E 52Nd PI, Vernon, Los Angeles County, CA 90040 APN: 6314 019 009 Report Number: 2004111600074 Date: 11/16/2004 Terms & Conditions JCP Geologists (JCP) provides this Commercial Natural Hazard Disclosure Report as a disclosure of certain mandated natural hazard information and Vansmissbn of certain Seller provided disclosures. It provides the investor with an eady cost-effective guide to aid in due diligence commitments or decision making prior to entering into purchase negotiatiwrs for a prospective property asset. Use of this report is acicwwletlgement of antl agreement to abide by all Terms and Conditions set form in Nis report, The report is specifically preparetl for the land parcel(s) identified by Assessor Parcel Numbers) (APN's) or developers Tract and Lot numbers supplied to JCP by Me client (or reasonably inferred from current owner information it mat was supplied instead). In the event that Me parcel identification provided us is incomplete, the subject property file assumed to comprise a single land parcel arid is identified for We purposes of this report by the corresponding single APN. All parties understand that the information provided In the disclosures does not apply to any other assessors parcel number other than those identified in this report. For the Natural Hazard Disclosures, JCP examines only Me following maps: (a) NFIP Flood Insurance Rate Maps, (b) California Office of Emergency Services Dam Failure Inundation maps, (c) AB 6. Real Estate: disclosure (CDF) maps, (d) Alquist-Paolo Earthquake Fault Zone maps, (e)Califomia Seismic Hazards Mapping Act maps (where available) (f) ) certain LOMR's or LOMA's (not all Nat exist may be available to JCP), (g)certain rafural hazard Safety Element maps adopted by Me county as part of its General Plan's Safety Element M) geologic and seismic hazard maps adopted by the city as a part of its Gmreal man's Safety Element only for location of the above property as identified by me seller or "Bees agent. JCP relies on these omdal sources for the information in this report and does not produce. maintain or verity the infomation. Other hazard or disclosure information that may exist in a jurisdictional Safety Element General Plan or any other source is rot provided in this report- The following procedures and limitations apply ro all of the disclosures on all pages of this report Our services include, where appropriate, use of the assessors rolls, cadastral-type maps, photographic enlargements of maps and various cartographic techniques to locate the site on the appropriate map. The determination is made as accurately as reasonably possible using these said maps. For purposes of defining property lines, Me memb er's parcel number and parcel maps are used. Any seers in the assessors role may affect the determination procedures and JCP will not be liable for such erors Decisions by jurist ictims relative to required studies, reports, ern. may be made using the information disclosed in this report, as well as other information in their files and/or local ordinances and procedures. Additional Information which may be material to Nis transaction may exist In other sources not used in this raped; however, research of such possible sources of the information in such sources is beyond the scope of this report and will not be reported hare. The disclosure information in this repon cannot be, connoted as a substitute for a geologic or engineering study her Nat a city a county will net require such shies. No visual examination of the subject site was performed nor was a study of any junsdictints files or other sources made to determine me existence of any hazed which may exist on the site. This report is for the purpose of come map -based, real estate transaction disclosures only and is not a substitute for the broker/agent property inspection. Due to changes disclosure maps. laws and contractual parties, this resod carnet be relied upon for other properties or for future transactions of the subject property. All parties should be aware that the information is subject to change. JCP is net responsible for advising pages of any changes mat may occur after the date of Nis report. Upon request within six months of issuing this Won. JCP will update the report for he additional charge for the same transaction. All representations regarding earthquake safety, water heater bracing, and title Insurance presented In this report are provided for the buyer's convenience by the seller(s) or agent(s) of me subject property. JCP has not validated this Information and takes no responsibility for its accuracy. If any party to this transaction has concerns relative to the stability or condition of the property or it'red flags' are observed during any party's inspection, we suggest that a consultant be retained to study the site and render an opinion. This report is provided for the single property for which it was issued as of the data of this report, and has been prepared for me exclusive use of me current seller(s), their agents), and potential buyers of this property. The findings are not intended for use by other parties and may not contain sufficient information for the purposes of other parties or other uses. Our professional services are performed using a degree of care and skill ordinarily exercised under similar circumstances by reputable consultants. No other warranty, expressed or implied, is made as to the professional advice presented in this report. Page 10 of 10 JCP Geologists 321 Warren A,a'-,ue Fremont CA 94539 800748.5233 reporls@icp-me.com www.jcpreports.com (92004 J'., a_ Commercial Natural Hazard Disclosure Report Property Address: 4855 E 52Nd PI, Vernon, Los Angeles County, CA 90040 APN: 6314020 Off Report Number: 2004111600075 Date: 11/16/2004 SELLER(S)ACKNOWLEDGEMENT AND DISCLOSURES This seam is provided for the Seller's convenience in providing certain disclosures that may be applicable to the property and this transaction. This section is to be completed by the seller or their agent and provided to the purchaser. The following discosures are provided by: ❑ Sao& or ❑Selleds)Agent ❑ Seller at ❑Sellegs)Agent care Seller Disclosure - Earthquake Safety This structure was built prior to 1975 and has walls of (i) precast (e.g. lilt -up) concrete or reinforced masonry together with wood frame floors or roofs or is constructed of (11) un-reinforced masonry Yes _ No Do not know If (1) the improvements on the property were constructed prior to 1975, and (2) said improvements include structures with (i) pre -cast (e.g. tilt -up) concrete or reinforced masonry walls together with wood Ireme floors or roofs or Ili) un-reinforced masonry walls. Buyer must be provided with a copy of the Corrlmerdal Property Owners Guide to Earthquake Safety (copy Included with this report) published by the California Seismic Safely Commission (California Government Code §8893 et seq.). This booklet explains that owners of un-reinforced masonry buildings in Seismic Zone 4 (most of California) who have received notice that their buildings have bad -bearing un-reinforce masonry walls must post their buildings with signs warning that they may be unsafe in an earthquake (California government Code §8875.8). This information is provided by the Seller or Broker. JCP has not validated this information in any way and takes no responsibility for its accuracy. Seller Disclosure— Water Heater Bracing Installation Yea _ No _ Do not know _ _ No Free Standing Water Healer If the property contains one or more water healers, Seller k required by California Health and Safety Code §79211 to certify to the Buyer that all such water heaters have been braced, strapped andfor anchored in accordance with law. This water healer bracing installation information is Provided by the Seller or Broker. JCP has not validated this information in any way and takes no responsibility for its accuracy. Seller Disclosure - Title Insurance is provided by the Purchase Agreement. Yes No— Do not know _ This Title Insurance information is provided by the Seller or Broker. JCP has not validated this information in any way and takes no responsibility for its accuracy. In the event that the Purchase Agreement does not at present provide that till, insurance will be obtained, Buyer is strongly urged to consider purchasing such insurance, and, in accordance with California civil Code §1057.6, is advised as follows: IMPORTANT: IN A PURCHASE OR EXCHANGE OF REAL PROPERTY, IT MAY BE ADVISABLE TO OBTAIN TITLE INSURANCE IN CONNECTION WITH THE CLOSE OF ESCROW SINCE THERE MAY BE PRIOR RECORDED LIENS AND ENCUMBRANCES WHICH AFFECT YOUR INTEREST IN THE PROPERTY BEING ACOUIRED. A NEW POLICY OF TITLE INSURANCE SHOULD BE OBTAINED Tn FNSI mC Vr1110 IlaTeoter lu END ADDITIONAL fipi HAVE READ AND UNDERSTOOD THE ABOVE SELLER'S DISCLOSURES AS WELL AS THE NATURAL HAZARD, MILITARY ORDNIINCEIAND AIRPOgy1N. F�IEN AREA DISCLOSURES, AND MOLD ADVISORY CONTAINED IN THIS REPORT. ✓/ I'/ �/J' ✓Pebruary 3, 2005 Slgnatureof Buyer Bruce V. Nalkenhorst, City Date Administrator/City Clerk (City of Vernon) Signature of Buyer Page 1 of 10 DP Gec:. JCP„ Commercial Natural Hazard Disclosure Report Property Address: 4855 E 52Nd PI, Vernon, Los Angeles County, CA 90040 APN: 6314 020 011 Report Number: 2GO4111600075 THE SUBJECT REAL PROPERTY t ins wrruiu ma cni Date: 11/16/2004 1. A SPECIAL FLOOD HAZARD AREA (Any type Zone W or N') designated by Die Federal Emergency Management Agency. Yes _ No X Do not know and information hot available ft. local jurisdiction JCP determination based on the officially adopted maps: Community is NOT participating in the National Flood Insurance Program. No panel available. 2. AN AREA OF POTENTIAL LOODING shown on i dam fare iluinuntlafion map pursuant to echon 8589.5 o the ovemment Code. Yes % No _ Do not know, and information not available from local jurisdiction JCP detemlination based on the officially adopted maps: In an Area of Potential Flooding Caused By Dam Failure according to the maps adopted by The State of California Office of Emergency Services. Refer to the explanation section below for more information on this zone. pursuan o ec ion o e overnmen o e. a owner or this Property is subject to the maintenance requirements of Section 51182 of the Government Cotle. Yes_ No X JCP determination based on the officially adopted maps: NOT in an ama of Very High Fire Hazard Seventy Zone as defined on the State level maps (Gov. Code 51178). A local agency may exclude or include additional fire zones at their option. Concerned parties should contact their local fire services for more information. 4. A WILDLAND AREA THAT MAY CONTAIN SUBSTANTIAL FOREST FIRE RISK AND HAZARDS pursuant to Section 4125 of the Pudic Resources Code. The owner of this property is subject to the maintenance requirements of Section 4291 of the Public Resources Code. Additionally, it is not the States responsibility to provide fire protection services m any building or structure located within me midlands unless the Department of Forestry and Fire Protection has entered into a cooperative agreement with a local agency for those pugwsas pursuant to Section 4142 of the Public Resources Code. Ves_ No X JCP determination based on the officially adopted maps: NOT in an official State Responsibility Area. Fire protection services for structures in this area departments. are provided by local fire Page 2 of 10 :r Geologists 321 Warren Avenue Fremont CA 94539 800 748.5233 reportsrg'icp-mcCom www;cpreports.com 02004 Commercial Natural Hazard Disclosure Report Property Address: 4855 E 52Nd PI, Vernon. Los Angeles County, CA 90040 APN: 6314 020 011 Report Number: 2004111600075 Date: 11/16/2004 5. AN EARTHQUAKE FAULT ZONE pursuant to Section 2622 of the Public Resources Code. Yes _ No X JCP determination based on the officially adopted maps: NOT in an official Earthquake Fault Zone. There are no mapped active fault traces on the property. See the Alquist-Paolo Earthquake Fault explanation section for additional information. i 6. A SEISMIC HAZARD ZONE pursuant to Section 2696 of the Public Resources Code. Yes (Landslide Zone) _ Yes (Liquefaction Zone) X No _ Map not yet released by state _ JCP determination based on the officially adopted maps: In an Official Seismic Hazard Zone. Located in a Liquefaction Hazard Zone, Other Seismic Hazards that may eventually be addressed on these maps have not yet been evaluated for Los Angeles County. T. County Level Geologic and Seismic Zone information Based on the officially adopted natural hazard maps in the County's General Plan, the site is: NOT in a zone of high geologic hazard. Located on sur icial alluvial materials of Low Liquefaction Susceptibility (Zone LL). Liquefaction is a loss of ground strength that may occur during strong earthquake shaking. Although large areas of the County have a potential for liquefaction, the phenomena rarely occurs. Also located in a dam inundation area. a. City Level Geologic Hazard Zane Dalerminelinn Based on the officially adopted natural hazard maps in the City's General Plan, the site is: Located in either an unincorporated area of the County or does not have officially adopted mapped information available to us at this time from which a geologic determination can be made. Page 3 of 10 :P G, J CPGeo log i sts Commercial Natural Hazard Disclosure Report Property Address: 4855 E 52Nd PI, Vernon, Los Angeles County, CA 90040 APN: 6314 020 011 Report Number: 2004111600075 Other. Risk Exposures Date: 11/16/2004 The descriptions, explanations and natural hazard disclosures provided in this report are not intended to be full and complete disclosures of all possible hazards and their effects to the Buyer and/or the property. Identified natural hazards and any others that may exist but are not addressed in this report may limit the ability to develop the real property, to obtain insurance, or to receive assistance after a disaster. In the event this document indicates the property is affected by one or more natural hazards, buyer(s) and sellers) are advised to: 1. Review the applicable laws in their entirety. 2. Seek advice of counsel as to any legal consequences of the disclosed items. 3. Retain appropriate consultants to review and investigate the impact of said disclosures,. On -site inspections and/or due diligence assessments by appropriately licensed engineers and experts are recommended prior to completing a real estate, loan, or insurance transaction. SPECIAL FLOOD HAZARD AREA Property in a Special Flood Hazard Area 'A' or'V' is subject to flooding in a'100-year rainstorm.' Federally connected lenders are required to have homeowners maintain flood insurance in these zones. A 100-year flood occurs on average once every 100 years, but may not occur in 1,000 years or may occur in successive years. Other types of flooding, such as dam failure, are not considered in developing these zones. In some cases, the insurance requirement may be waived or modified by obtaining a 'Letter of Map Revision' (LOMR) or 'Letter of Map Amendri l' (LOMA) from the Federal Emergency Management Agency (FEMA). This might be possible where flooding is shallow and fill was placed on the she, appropriate flood control measures were taken, or only the lot and no pan of the structure is in the zone. Contact FEMA directly for more information. Flood insurance for properties in Zones B. C. X or D is available but is not required. Zones A, AO, AE, AH, Al-A30:Area of '100-year flooding - a 1 h or greater chance of annual flooding, Zones V, V1430: Area Of'100-year' flooding in coastal (shore front) areas subject to wave action. Zone B: Area of moderate flood risk These are areas between the'100' and'500' year Hood -risk levels. Zones X: An area of moderate to minimal flood risk Zones C, D: NOT IN an area of'100-year' flooding. Area of minimal (Zone C) or undetermined f7nne n1 u—d ua.e AREA OF POTENTIAL FLOODING (DAM FAILURE These areas are subject to potential flooding in the event of a sudden and total failure of a dam and injury could occur as a result. Most areas are defined assuming an instantaneous dam failure with a full reservoir. However, dams rarely fail instantaneously and reservoirs are not always filled to capacity. Not all dams in the state have inundation zones mapped. There may be exceptional conditions where such a map was not required by the OES; therefore, the zones are not delineated. VERY HIGH FIRE HAZARD SEVERITY ZONE (VHFHSZ) VHFHSZs are defined by the Cations Department of Forestry and Fire Protection (CDF) and local fire authorities in 'Local Responsibility Areas' where fire suppression is the responsibility of a local fire Department. In these zones properties may have a higher risk for fire damage and are required to have a 'Class A' mot for new construction or replacement of existing roofs. In addition, the property must be maintained in a fire-resistant condition through adequate vegetation clearance around and above the structure, spark screens on chimneys and stovepipes, leaf removal from roofs, and other basic fire -safety practices. Contact your lire department for a complete list of requirements and exceptions. Page 4 of 10 " Geologists 321 Warren Avenue Fremont CA P4339 800748.5233 reports@jep-tnc.com www.Icp(aporls.com 72004 =£ C',P - Commercial Natural Hazard Disclosure Report Property Address: 4855 E 52Nd PI, Vernon, Los Angeles County, CA 90040 APN: 6314 020 011 Report Number: 2004111600075 Date: 11/16/2004 WILDLAND FIRE AREA (STATE RESPONSIBILITY AREA) A wildland area where the CDF's fire protection services are responsible for suppressing fires is called a *State Responsibility Area' (SRA). These are generally rural areas where a significant wildland fire potential exists. Unless the county has assumed the fire suppression responsibility or has an agreement with a local lire agency, property owners in an SRA am responsible for organizing structural lire protection services. Such information is not available on maps; therefore, it can't be provided here. For very Isolated properties with no local lire services there may be significant fire risk or only seasonal fire services. Properly owners in an SRA are required to maintain adequate vegetation clearance around and above the structure, spark screens on chimneys and stovepipes, and other basic fire -safety practices. Contact your fire department for a complete list of requirements and exceptions. EARTHQUAKE FAULT ZONE Earthquake Fault Zones are delineated stiff adopted by California as part of the Alquist-Pnolo Earthquake Fault Zone Act of 1972. Property in an Earthquake Fault Zone does not necessarily have a fault trace existing on the site. Earthquake Fault Zones are areas or bands delineated on both sides of known active earthquake faults. In some places, the zones are more than on"ifarter of a mile wide. The potential for 'fault mplure' damage (ground cracking along the fault trace) is relatively high only if a structure is located directly on a fault trace. It a structure is not on a fault hate, shaking will be the primary effect of an earthquake. During a major earthquake, shaking will be strong in the vicinity of the fault and may be strong at some distance from the fault depending on soil and bedrock conditions. It is generally accepted that properly constructed wood -frame houses are resistant to shaking damage. SEISMIC HAZARD MAPPING ACT ZONE Seismic Hazard Zone maps delineate areas subject to earthquake hazards. New development in a Seismic Hazard Zone is only permitted it it can be shown that mitigation makes the site acceptably sale. Maps are only available for limited areas now, but will eventually cover all of California. The hazards addressed are or will be: liquefaction, enhanced ground shaking, earthquake induced landslides, and various other ground failures. The first release of maps only addresses liquefaction and/or landslide zones. Liquefaction Hazard Zones are areas where there is a potential for, or an historic occurrence of liquefaction. Liquefaction is a rare soil phenomenon that can occur when loose, water saturated, fine-grained sands, and silty sands that lie within 50 feet of the ground surface, are shaken in a significant earthquake. The soil temporarily becomes liquid -like and structures may settle unevenly. Earthquake -Induced Landslide Hazard Zones are areas where there has been a recent landslide, or where the local slope, geological, geotechnical, and ground moisture conditions indicate a potential for landslides as a result of earthquake shaking. LOS ANGELES COUNTY GEOLOGIC ZONES DISCUSSION Fault Zones • Active Faults: Several faults and fault segments not included as part of the Earthquake Fault Zone Act are considered active by the County. Zones from 1000 feet to 1.2 miles wide have been defined by the County around these faults. Properties in these zones are at some risk for fault rupture (surface cracking along the fault) • Potentially Active Faults: Faults active in the last 750.000 years but with no historical activity (past 10,000 years) are considered 'potentially active' by Los Angeles County. Zones from 1000 feet to 1.2 miles wide have been defined by the County around these faults. Properties in these zones may be at some risk for fault rupture, bud the risk is probably lower than that for active faults. • Conditionally Active Faults: Faults active between 750,000 and 2,000,000 years ago are considered 'conditionally active' by Los Angeles County. Properties located directly on one of these faults are at an undetermined but relatively small risk of rupture. Page 5 of 10 JP GeolOgtstc 3.21 Vwat,eo A�. oiie Fc n..1.; i. : R Jl.rG2ologists s commercial Natural Hazard Disclosure Report Property Address: 4855 E 52Nd PI, Vernon, Los Angeles County, CA 90040 APN: 6314 020 011 Report Number: 2004111600075 Date: 11/16(2004 • Slope Stability Zones The County Safety Element inventories landslides and slope stability hazards. The minimum size of a slide is five acres, but clusters of slides may be shown as a single landslide. A delineated landslide is not a definitive statement of a site's stability, either now or in the future. Many slides are mitigated during development. For detailed stability information, a geolechnical consultant should be retained. • Hillside Areas: Areas subject to slope instability, particularly if slope gradients exceed 25 percent. If a property is in a designated "Hillside Area; If does not necessarily mean that landslides exist on the property or that landsliding is imminent or probable. • Area Impacted by Storm -Induced Landsliding: Areas that experienced stone -induced shallow landsliding during the particularly wet years of 1969. 1978, and 1980 have been delineated on the maps. • Area Impacted by Mud and Debris Flooding: Areas that have experienced storm -induced shallow landsliding mud and debris flows. Such flows may happen during periods of exceptionally high rainfall as that which occurred in 1969, 1978, and 1980. • Area of Shallow Surficial Landslides: These areas include regions in the Santa Monica and San Gabriel Mountains and the Puente Hills where abundant shallow landslides may occur. • Identified Bedrock Landslide: These included definite and probable landslides ranging from foe to hundreds of acres in size. Liquefaction Zones Liquefaction is a liquid -like soil condition which may occur during strong earthquake shaking if the groundwater is shallow and the subsurface soils are loose and cohesionless (such as sands). The factors can combine to produce liquefaction in certain local areas. • Liquefiable Areas (Zone L): Groundwater is less than 30 feet deep in these areas, however, it does not necessarily mean that liquefaction will occur during earthquake shaking. This zone has a higher potential for liquefaction than other zones. • Potentially Liquefiable Areas (Zone PL): Flat -tying valley areas with a relatively low liquefaction potential. • Low Liquefaction Susceptibility (Zone LL): Flat to gently sloping areas with relatively low liquefaction potential. •Very Low Liquefaction Susceptibility (Zone VL): Areas underlain by bedrock not normally susceptible to liquefaction. Seismic Zones • Tsunami Inundation Area: This area has been designated as a zone of moderate risk for tsunami (seismic sea wave or •8dal wave') run-up. The tsunami zone may be inundated by waves which recur on average of once every 500 years. • Dam Inundation Area: These may be subject to flooding in the event of dam failure. They are defined assuming an instantaneous dam failure with a full reservoir. However, dams rarely fail instantaneously and reservoirs are not always filled to capacity. CITY -LEVEL GEOLOGIC AND SEISMIC ZONES DISCUSSION This disclosure report reviews the officially adopted geologic hazard maps in the Safety Element that each incorporated city in California is required to include in its General Plan. The city the subject property is located in has either not officially adopted hazard zonation maps in its General Plan at an appropriate scale to delineate where hazards may exist on a single parcel basis or will not make such maps available outside City offices. However, potential natural hazards may exist and be delineated on other sources used by the city in its Planning. Engineering, or Building Departments. Such potential sources are not reviewed in this report. All parties should be aware that California is 'earthquake country.' Faults that may exist in this City or in neighboring regions Could cause earthquake shaking or other fault related phenomena at the property. Other geologic hazards such as, but not lindted to liquefaction (a type of soil settling that can occur when loose, water -saturated sediments are shaken Significantly in an earthquake) may occur in certain valley floor area and landslides are a possibility in any hillside area. Page 6 of 10 '' Geologists 321 Ni3rren Avenue Fremont CA 94539 800.748.5233 reports gicp-inc.com www.icoreoorts.com C12004 -= JC:Pc t Commercial Natural Hazard Disclosure Report Property Address: 4855 E 52Nd PI, Vernon, Los Angeles County, CA 90040 APN: 6314 020 011 Report Number: 2004111600075 Date: 11/1612004 NOTE: County and city -level information sources are developed independently of each other and do not necessarily define or delineate hazards in the same way. A site can be in a geologic hazard zone according to the city and not in zone according to the county and vice versa. Cities and counties may use other information in addition to their General Plan sources to determine if hazards exist at a site or which sites may require geologic studies prior to new or additional construction. Such information could be a material fact to be disclosed in addition to General Plan information. Additional natural hazards may exist and be delineated on other sources used by the City in its Planning, Engineering, or Building Departments. Such potential sources are not reviewed in this report. To investigate other sources of natural hazard information that may be available and used at the city level, contact the city Engineering, Planning or Building Departments. END OF LOCAL AREA DISCLOSURES AND DISCUSSIONS SECTION t. F Page 7 of 10 DIR Geologists 321 Wanes Avenue Fipmcml (7 r 300 ,... .. I 11, JCPGeologists commercial Natural Hazard Disclosure Report Property Address: 4855 E 52Nd PI, Vernon, Los Angeles County, CA 90M APN: 6314 020 011 Report Number: 200411160DO75 Date: 11/16/2004 FORMER MILITARY ORDNANCE SITE DISCLOSURE Determination The subject property is NOT WITHIN one mile of a Formerly Used Defense (FUD) site containing military ordnance. RAC Scoring: A risk assessment procedure was developed by U.S. Army Corps of Engineers (USAGE) to prioritize the remedial actions at FUD sites. Each FUD she is given a Risk Assessment Code (RAC) score to describe the site status. The risk assessment is based on the best available information resulting from records searches, reports of Explosive Ordnance Disposal (EOD) detachment actions, field observations, interviews, and measurements. The RAC is dependent on two factors: hazard seventy and probability. Discussion FUD sites can include sites with common industrial waste (such as fuels), ordnance or other warfare materiel, unsafe structures to be demolished, or debris for removal. NOTE: most FUDS sites do not contain unexploded ordnance. California Civil Code 1102 requires disclosure of those sites containing unexpected ordnance. 'Military ordnance' is any kind of munitions, explosive device/material or chemical agent wed in military weapons. Unexploded ordnance are munitions that did not detonate. Only those FUD sites that the USACE has identified to contain Military Ordnance or have mitigation projects planned for them are disclosed in this report. Additional sites may be added as military installations are released under the Base Realignment and Closure (BRAG) Act. Active military sites are NOT included on the FUDS list. AIRPORT INFLUENCE AREA DISCLOSURE' •+ Based on certain mapped Airport Influence Areas determined by a County Airport Land Use Commission, the following determination can be made: '1 The property IS NOT IN an Airport Influence Area +In Discussion ' An 'airport influence area; also known as an'ai reBrea; is the area in which current or future airport -related noise, may over flight, safely, or airspace protection factors may significantly affect land uses or necessitate restrictions on those uses as ,_.4 determined by an airport land use commission. _ - JCP uses the current Airport Influence Area maps provided to us by County Airport Land Use Commissions. The inclusion of military and private airports varies by County and therefore, depending on the County, military and private airports may or may not be included in this disclosure. Page a of 10 �P Geologists 321 P/arrrn Avenue Fremont CA 94539 800748.5233 rettorts OIcp-inc.com www;coreoorls.com 02004 Commercial Natural Hazard Disclosure Report Property Address: 4855 E 52Nd PI, Vernon, Los Angeles County, CA 90040 APN: 6314 020 011 Report Number: 2004111600075 Date: 11/16/2004 MOLD ADVISORY The Buyer is hereby advised that naturally occurring molds may exist both inside and outside of any home and may not be visible to casual inspection. Persons exposed to extensive mold levels can become sensitized and develop allergies to the mold or other health problems. Extensive mold growth can damage a structure and its contents. All prospective purchasers of residential and commercial property are advised to thoroughly inspect the subject property for mold. Be sure to inspect the property inside and out for sources of excess moisture, current water leaks and evidence of past water damage. For molds to grow and reproduce, they need only a food source - any organic material, such as leaves, wood, paper, or dirt and moisture. Because molds grow by digesting the organic material, they gradually destroy whatever they grow on. Mold growth on surfaces can often be seen in the forth of discoloration, frequently green, gray, brown, or black but also white and other colors. As part of a buyees physical inspection of the condition of a property, the buyer may consider engaging an appropriate and qualified professional to inspect and test for the presence of harmful molds and to advise the buyer of any potential risk and options available. This advisory is not a disclosure of whether harmful mold conclitiQns exist at a Property or not, JCP Geobaists has not perforated testing or inspections of any kind Any use of this form is acknowledgement and acceptance that JCP does not disclose, warrant or indemnify mold conditions at a property in any way and is not responsible in any way for mold conditions that may exist. Information is available from the California Department of Health Services Indoor Air Quality Section fact sheet entitled, "Mold in My Home: What Do I Do?' The fact sheet is available at www.cal-iaq.org or by calling (510)540-2476. The Toxic Mold Protection Act of 2001 requires that information be developed regarding the potential issues surrounding naturally occurring molds within a home. Information was written by environmental authorities for inclusion in the Environmental Hazards: A Guide for Homeowners, Buyers, Landlords and Termis booklet developed by the California Environmental Protection Agency and the Department of Health Services. It is found in Chapter VI of that booklet, and includes references to sources for additional information. For local assistance, contact your County or City Department of Health, Housing, or Environmental Health. CONFIRMATION OF COVERAGE AND INDEMNIFICATION JCP Geologists has prepared a Natural Hazard Disclosure Report for the subject property identified above. This Confirmation of Coverage Statement applies only to the current transaction for which this JCP report was prepared, as of the date this report was prepared. This statement is confirmation that JCP Geologists is included as an insured under a $20 million Professional Liability policy for errors & omissions arising from the services JCP performs. Coverage, which is subject to specific terms and conditions in the policy, is provided for damages JCP is obliged to pay as a result of its negligent acts, errors or omissions arising out of its Natural Hazard Disclosure Professional Services provided for the above referenced residential property as of the date this report was prepared. JCP's Professional Liability insurance policies contain an agreement which, subject to the specific terms and conditions contained in the policy, indemnifies and provides defense of the Clients of JCP against claims caused by the negligent acts, errors or omissions of JCP that fall within the scope of a contractual indemnification obligation of JCP to its Clients. For this purpose, Clients of JCP are the contractual parties to this transaction and their respective real estate agents for which JCP has provided professional services. Date: 11/16/2D04 By: JCP Geologists Page 9 of 10 .!' Geolog-•dam- - . - jPGerlogisis Commercial Natural Hazard Disclosure Report Property Address: 4855 E 52Nd PI, Vernon, Los Angeles County, CA 90040 APN: 6314 020 011 Report Number: 2GO4111600075 Date: 11/162G04 Terms &Conditions - JCP Geologists (JCP) provides this Commercial Natural Hazard Disclosure Heport as a disclosure of certain mardated natural hazard iformaton and transmission of certain Seller provided disclosures. It provides the investor with an early cost-effective guide to aid in due diligence commitments or decision making prior to enledng into purchase negotiations for a prospective property asset. Use of this report is acknowledgement of and agreement o abide by all Terms and Conditions set forth in this report. The report is specifically prepared for the land parcels) identified by Assessor Parcel Number(s) (APN'a) or developers Tract and Lot numbers Supplied to JCP by the client (or reasonably interred from current owner fi forabon it that was supplied instead). In Me event that Me parcel identification provided us is incomplete, the subject property 8is assumed to comprise a single land Parcel and is identified for the purposes of this report by the corresponding single APN. All parties understand Mal the information provided in the disclosures does rat apply to any other assessors parcel number other than those identified In MIS report. For the Nakwal Hazard Disclosures, JCP examines only the following maps: (a) NFIP Food Insurance Rate Maps, (b) California office of Emergency Services Dam Failure Inundation maps. (c) AD 6, Real Estate: disclosure (CDF) maps, (d) Alquist-P iod o Earthquake Fault Zone maps, (e)Cslifomia Seismic Hazards Mapping Act maps (where available) in ) certain LOMR's or LOMA'S (not all that exist may be available o JCP), (g)cedain natural hazard Safety Element maps adopted by Me county as part of its General Plan's Safety Element, (h) geologic and seismic hazard maps adopted by the city as a part of its General Plan's Safety Element only for location of Me above property as identified by Me seller or settees agent. JCP relies on these official spumes for the information in this report and does not produce, maintain or verity the Information. Other hazard or disclosure Information that may exist in a jurisdictional Safety Element, General Plan or any other source is not provided in this report. The Mowing procedures and limitations apply to all of the disclosures on all pages of this report Our services include, where appropriate, use of the assessors rills, cadassal-type, maps, photographic enlargement of maps and various cartographic techniques to locate Me site on the appropriate map. The determination is made as accurately as reasonably Possible using these said maps. For purposes of defining property lines, the assessors parcel number and parcel maps are used. Any more in the assessors rolls may affect Me determination procedures and JCP will not be liable for such errors Decisions by jurisdictions relative fo required afts ies, reports, etc. may be made using the information disclosed in this report, as well as other information in their files andfor local ordinances and procedures. Additional information which may be material to MIS transaction may exist in other sources not used in MIS report; however, research ofsuch Possiba sources of the information in such sources is beyond the scope of MIS report antl will not be reported here. The disclosure information in Ma report cannot be construed as a Substitute for a geologic or engineering study nor that a city or county will not require such studies. No visual examination of Me subject site was performed nor was a study of any jurisdiction's files or other sources made to determine the existence of any hazard which may exist on the site. This report Is for Me purpose of certain map -based, real Seale transaction disclosures only and is not a substitute for the broker/agent property inspection. Due to changes disclosure maps, awe and contractual Parties, this report cannot be relied upon for other properties or for future transactions of the subject property. All parties should be aware that the information Is subject to change. JCP is not responsible for advising parties of any changes Mat may occur after the date of MIS report. Upon request within six months of issuing Ws repot, JCP will update Me report for no additional charge for the same transaction. ' All representations regarding earthquake safety, water heater bracing, and title insurance presented in this report are provided for the buyer's convenience by the seller(s) or agent(s) of the subject property. JCP has not validated this Information and takes no responsibility for its accuracy. If any party to this transaction has concerns relative to the stability or condition of the property or if'red flags* are observed during any party's Inspection, we suggest that a consultant be retained to study the site and render an opinion. This report Is provided for the single property for which it was issued as of the date of this report, and has been prepared for the exclusive use of the current selleds), their agent(s), and potential buyers of this property. The findings are not intended for use by other parties and may not contain sufficient information for the purposes of other parties or other uses. Our professional services are performed using a degree of care and skill ordinarily exercised under similar circumstances by reputable consultants. No other warranty, expressed or implied, is made as to the professional advice presented in this report. Page 10 of 10 Geologists 321 Warren Avenue Fremont CA 94539 800. 748.5233 reoorts€r'ico-incalm www.icn reruns com 2121A14