Resolution No. 8920
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RESOLUTION NO. 8920
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
VERNON APPROVING AND AUTHORIZING THE EXECUTION OF A
STANDARD OFFER, AGREEMENT AND ESCROW INSTRUCTIONS
FOR PURCHASE OF REAL ESTATE AND ADDENDUM BY AND
BETWEEN THE CITY OF VERNON AND FASHION INCUBATOR
LLC FOR PROPERTY LOCATED AT 3375 E, SLAUSON AVENUE
WHEREAS, the City of Vernon desires to sell certain real
in the City consisting of approximately 39,900 square feet,
with all existing structures and improvements, commonly known
as 3375 E, Slauson Avehue (the "Property") to Fashion Incubator LLC
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("Fashion") for the sum of $3,417,000; and
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WHEREAS, Fashion has agreed to buy the Property from the
City on negotiated terms, which the City has determined to be fair and
reasonable; and
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Property to Fashion and that the necessary documents to implement the
WHEREAS, City staff has recommended that the City sell the
sale be executed.
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NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL ~F THE
CITY OF VERNON AS FOLLOWS:
SECTION 1:
The City Council of the City of Vernon hereby
and correct.
finds and determines that the recitals contained hereinabove are true
SECTION 2:
The City Council of the City of Vernon hereby
approves the Standard Offer, Agreement and Escrow Instructions for
Purchase of Real Estate and Addendum to Standard Offer, Agreement and
Escrow Instructions for Purchase of Real Estate with Fashion, in
substantially the same form as the copy which is attached hereto as
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1 Exhibit A and incorporated by reference.
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SECTION 3:
The City Council of the City of Vernon hereby
3 authorizes the Mayor to execute the Agreement and Addendum for, and on
4 behalf of, the City of Vernon and the Acting City Clerk is hereby
5 authorized to attest thereto,
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SECTION 4:
The City Council of the City of Vernon hereby
7 authorizes the Acting City Clerk, or his designee, to execute any and
8 all documents as shall be required to complete the sale of the
9 Property and to accomplish the close of escrow consistent with the
10 terms of said Agreement and Addendum approved herein.
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SECTION 5:
The Acting City Clerk of the City of Vernon
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13 thereafter the same shall be in full force and effect.
14 APPROVED AND ADOPTED this 7th day of December, 2005,
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- LEONIS c-:- MAL URG, ayor
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21 BRUCE V, ALKENHORST, JR.
Acting City Clerk
ATTEST:
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1 STATE OF CALIFORNIA
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4 I, BRUCE V. MALKENHORST, JR., Acting City Clerk of the City of
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COUNTY OF LOS ANGELES
5 Vernon, do hereby certify that the foregoing Resolution, being
6 Resolution No. 8920, was duly adopted by the City Council of the City
7 of Vernon at a regular meeting of the City Council duly held on
8 Wednesday, December 7, 2005, and thereafter was duly signed by the
Mayor of the City of Vernon.
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BRU~MALKEN~JR'
Acting City Clerk
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(SEAL)
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EXHIBIT
A
of'- '.
STANDARD OFFER, AGREEMENT AND ESCROW
INSTRUCTIONS FOR PURCHASE OF REAL ESTATE
(Non-Residential)
November 2, 2005
(Date for Reference Purposes)
1. Buyer
1.1 Fashion Incubator LLC, a California limited liability company ("Buyer") hereby offers to purchase
the real property, hereinafter described, from the City of Vernon ("Seller") (collectively, the "Parties" or
individually, a "Party"), through an escrow ("Escrow") to close on a date mutually agreed to by the Parties
that is 60 calendar days following Buyer's written notice of its election to approve the transaction and close
the Escrow, which notice is to be delivered by Buyer on or before the last day of the Due Diligence Period, as
defined in Paragraph 7.1 ("Closing Date"). The Closing shall be held by Lawyers' Title, 251 S. Lake
Avenue, Suite 400, Pasadena, California 91101 (Attn: Mr. Raul Contreras) ("Escrow Holder"), Phone No.
626-304-2700 or 661-478-1508 (cell), Facsimile No. 626-795-0788, upon the terms and conditions set forth in
this agreement ("Agreement"). Upon written notice to Seller and Escrow Holder, Buyer may assign this
Agreement to a creditworthy affiliate; provided, however, that no assignment of this Agreement by Buyer
shall be deemed to relieve Buyer of any responsibilities or obligations under this Agreement and Buyer and its
assignee shall be jointly and severally liable under this Agreement and bound by all of its provisions,
including the release provisions contained herein.
1.2 The term "Date of Agreement" shall be the date when by execution and delivery 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 ofthe property located at
3375 E. Slauson Ave., City of Vernon, State of California, consisting of approximately 39,900 square feet, and
with the APN to be determined in Escrow.
2.2 The legal description of the Property shall be completed to meet the requirements of Lawyers' Title
(Attn: Mr. Raul Contreras) ("Title Company"), which shall issue the title policy hereinafter described.
2.3 The Property shall be delivered with all existing structures and improvements in their currently
existing, with all faults, AS IS condition.
2.4 All personal property is specifically excluded from the sale of the Property and will remain the
property of Seller, and be removed from the Property prior to the Close of Escrow; provided, however, that the
pallet jack and the reception area desk/counter top that is attached to the wall shall be part of the Property and
included in the sale to Buyer.
3, Purchase Price
3.1 The purchase price ("Purchase Price") to be paid by Buyer to Seller for the Property shall be
$3,417,000. The Purchase Price shall be payable all cash at the Closing, provided, however, that the Deposit,
as defined below, shall be applied to the Purchase Price at the Closing; There is no loan contingency.
4, Deposits
4.1 Within two business days following the mutual execution of this Agreement, Buyer will deliver to
Escrow Holder by wire transfer the sum of Twenty-Five Thousand Dollars ($25,000), along with an executed
copy of this Agreement, as a refundable Deposit, subject to payment of Title Company and Escrow Holder
cancellation fees and costs, as described in Paragraph 6.6, and costs of indemnification and repair of any
damages caused by Buyer or its agents, if any.
4.2 Buyer shall wire transfer to Escrow Holder an additional Twenty-Five Thousand Dollars ($25,000)
within two business days following the last day of the "Due Diligence Period" (as defined in Paragraph 7.1)
if Buyer has not terminated this Agreement prior to the last day ofthe Due Diligence Period.
4.3 Escrow Holder shall deposit the funds deposited with it by Buyer pursuant to Paragraphs 4.1 and
4.2 (collectively, 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 Numberis . NOTE: Such interest bearing account cannot be opened until Buyer's
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Federal Tax Identification number is provided. Buyer must give prior written approval to any instrument
purchased by the Escrow Holder with the Deposit.
4.4 After the last day of the Due Diligence Period, the Deposit shall be non-refundable to Buyer, but
shall be fully applicable to the Purchase Price. If Buyer does not give written notice of its election to approve
the transaction on or before the last day ofthe Due Diligence Period, the Deposit shall be refundable, subject
to the terms of Paragraphs 4.1 and 6.6:
5, Real Estate Brokers
Buyer is represented by Colliers Seeley ("Broker"), and Seller is not represented by a broker. Buyer
and Seller each represent and warrant to the other that, except for Broker, Buyer and Seller have had no
dealings with any person, firm, broker or finder in connection with the negotiation of this Agreement or the
consummation of the purchase and sale contemplated herein, and no other broker or other person, firm or
entity, 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 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, except for Seller's obligation to compensate Broker in accordance with the terms of a
separate agreement between Seller and Broker, which commission shall be payable out of the Escrow if and
only if there is a Closing.
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. Subject to the reasonable approval ofthe Parties, Escrow Holder may, however,
include its standard general escrow provisions; provided, however, that in the event of a conflict between the
terms of this Agreement, and Escrow Holder's instructions, the terms of this Agreement shall control.
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 Paragraph 1.2 and advise the Parties, 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 ofthe Internal Revenue Code.
6.3 Subject to satisfaction or waiver of the Buyer's Contingencies, Escrow Holder shall close this
Escrow (the "Closing" or the "Close of Escrow") 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 additional
endorsements or AL T A coverage, if obtained by Buyer.
6.5 Escrow Holder shall verify that all of Buyer's Contingencies have been satisfied or waived in
writing prior to Closing.
6.6 If this transaction is terminated for non-satisfaction and non-waiver of a Buyer's Contingency, as
defined in Paragraph 7.1, 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, unless termination is caused by Seller's breach, default, or the election of Seller per the terms of
this Agreement to terminate the Escrow, in which case, Seller shall be responsible for such costs. In addition,
Buyer shall pay any costs of indemnification required hereunder and repair of any damages caused by Buyer
or its agents.
6.7 The Closing shall occur on the Closing Date, or as soon thereafter as the Escrow is in condition for
Closing; provided, however, that if the Closing does not occur within 15 days after the Closing Date and said
Closing 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 Holder's fees and costs or constitute a waiver, release or discharge of
any breach or default that has occurred in the performance ofthe obligations, agreements, covenants or
warranties contained therein.
6.9 If this Escrow is terminated for any reason other than Seller's breach or default, then at Seller's
request, and as a condition to the return of Buyer's deposit, Buyer shall within 5 business days after written
request deliver to Seller, at no charge, copies of all surveys, engineering studies, soil reports, maps, master
plans, feasibility studies and other similar items prepared by or for Buyer that pertain to the Property.
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7, Contingencies to Closing
7.1 The Closing of this transaction is contingent upon the satisfaction or waiver of the following
contingencies and any other matter in the sole discretion of Buyer. Buyer may terminate this Agreement and
cancel the Escrow if Buyer disapproves, at Buyer's sole discretion, of any item during the Due Diligence
Period ("Buyer's Contingencies"). IF BUYER FAILS TO NOTIFY ESCROW HOLDER AND SELLER,
IN WRITING, OF THE APPROVAL OF ANY OF BUYER'S CONTINGENCIES WITHIN THE TIME
SPECIFIED HEREIN, 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. Buyer's period for approval or disapproval of the Buyer's
Contingencies set forth in Paragraph 7 shall end at 5:00 P.M., California time, on the 45th calendar day after
the Date of Agreement (which 45 day period shall be extended to the next business day if it ends on a Friday,
weekend, or holiday) (the "Due Diligence Period").
(a) Disclosure. Seller shall make to Buyer, through Escrow, all of the applicable disclosures
required by law (per AIR Commercial Real Estate Association ("AIR") standard form entitled "Seller's
Mandatory Disclosure Statement") and provide Buyer with a completed Property Information Sheet
("Property Information Sheet") concerning the Property, duly executed by or on behalf of Seller in the
current form or equivalent to that published by the AIR within 7 business days following the Date of
Agreement. All disclosures set forth in the Seller's Mandatory Disclosure Statement and the Property
Information Sheet shall be true and correct to the current actual knowledge of Kevin Wilson, the Director of
Community Services, without duty of investigation, and with the understanding that Seller has recently
acquired the Property. Seller shall deliver to Buyer a report paid for by Seller and prepared by a professional
provider containing the Natural Hazard Disclosures concerning the Property. Unless otherwise noted by
Seller to Buyer in writing, Seller is unaware of any inaccuracies in the Natural Hazard Disclosures. Seller
shall provide to Buyer, within 7 business days following the Date of Agreement, all materials in Seller's
possession or reasonably available to Seller that affect the nature or use of the Property, including, but not
limited to, environmental reports (including any existing Phase I environmental survey in the possession of the
Seller), demolition reports, all as-built building plans and CAD files, landscaping and topography plans,
certificate of occupancy, and copies of any written contracts, agreements, or warranties that affect the
Property, including all maintenance contracts and service agreements. All documents provided to Buyer that
were prepared by third parties are subject to the terms of Paragraph 10.4. Buyer may request in writing
specific documentation or information from Seller during the Due Diligence Period, and if Seller is unable to
provide Buyer specific documentation or information as required herein, Seller shall promptly inform Buyer
of such in writing. Notwithstanding the generality of the foregoing, Seller shall not provide copies of any
appraisals, internal analyses, valuations, or memorandum, or any attorney-client documents related to the
Property, if any, or any operating income and expense documentation, such as rent rolls, leases, costs of
insurance or taxes, or other similar documents. Seller will use its reasonably diligent efforts to deliver to
Buyer the requested ,documentation, but does not warrant that it will find every document, report, or file
related to the Property, as such documents may be located in various different files in different departments,
held by different personnel.
(b) Physical Inspection. Buyer has 45 days from the Date of Agreement to satisfy itself with
regard to the physical aspects and size of the Property.
(c) Hazardous Substance Conditions Report. Buyer has 45 days from the Date of Agreement to
satisfy itself with regard to the environmental aspects ofthe 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 has 45 days from the Date of Agreement to 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.
(e) Governmental Approvals. Buyer has 45 days from the Date of Agreement to 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 01 Title. Escrow Holder shall cause a preliminary title report ("Title Report")
concerning the Property issued by the Title Company, as well as legible copies of all documents referred to in
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the Title Commitment ("Underlying Documents") to be delivered to Buyer within 15 calendar days following
the Date of Agreement. Buyer has 45 days from the Date of Agreement to satisfy itself with regard to the
condition oftitle. 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 has 45 days from the receipt of the Title Report and Underlying Documents to
satisfy itself with regard to anyALTA 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 survey and approved the ALTA title supplement,
Buyer may elect within the period allowed for Buyer's approval of a survey to have an AL T A extended
coverage owner's form of title policy, in which event Buyer shalI pay any additional premium attributable
thereto.
(h) Other Agreements. Seller shall within to calendar days from the Date of Agreement provide
Buyer with legible copies of all other agreements ("Other Agreements") readily available to Seller that will
affect the Property after Closing. Buyer has 45 days from the receipt of said Other Agreements to satisfy itself
with regard to such Agreements.
(i) 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.
(j) Warranties. That 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. To the actual knowledge, without duty of inquiry, of the Director
of Community Services of the City of Vernon, Seller has not failed to disclose a material fact of importance to
the Buyer in regard to the condition of the Property that was known to the Director of Community Services of
the City of Vernon; provided, however, that Seller shall not be liable for a breach of this representation and
warranty if such material fact was actually known or suspected or should have been known or
suspected by Buyer as a result of Buyer's prudent due diligence or Buyer's use and occupancy as a tenant at
the Property. The Director of Community Services is the Supervisor of the Department that manages, among
other departments, the Building Division and the Planning Division of the City of Vernon and is therefore the
person probably mOst qualified and knowledgeable to make the above representation. This warranty shall
survive for a period of six months following the Close of Escrow.
7.2 All of the contingencies specified in the sub-paragraphs of Paragraph 7.1 are for the benefit of, and
may be waived by, Buyer.
7.3 If any Buyer's Contingency or any other matter subject to Buyer's approval is disapproved as
provided for herein in a timely manner ("Disapproved Item"), Seller shall have the right within 10 days
following the receipt of notice of Buyer's disapproval to elect to cure such Disapproved Item prior to the
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 Closing Date shall be conclusively
presumed to be Seller's 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 Seller's 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, the time
periods for the Due Diligence Period and the Closing Date shall each be deemed extended by the cumulative
business days during which the elections of Buyer and Seller are satisfied for Disapproved Items as described
above.
7.4 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 Buyer acknowledges that it has been advised by Seller to consult its own
technical and legal experts with respect to the possible presence of Hazardous Substances on the Property or
adjoining properties, and Buyer is not relying upon any investigation by or statement of Seller with respect
thereto. Buyer assumes all responsibility for the impact of such Hazardous Substances.
7.5 Notwithstanding .anything else herein to the contrary, prior to the expiration of Due Diligence
Period, Buyer may terminate this Agreement in its sole and absolute discretion, and any deposits shall be
refunded to Buyer, less costs, if any pursuant to Paragraphs 6.6 and 4.1.
8, Documents Required at or before Closing:
8.1 By the Closing date Escrow Holder shall obtain an updated Title Report concerning the Property
from the Title Company and provide copies thereofto each of the Parties.
8.2 Seller shall deliver to Escrow Holder in time for delivery to Buyer at the Closing:
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(a) Grant deed, duly executed ~d in recordable form, conveying fee title to the Property to
Buyer.
(b) 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 Buyer at least 3 business days prior to the Closing, Escrow Holder
shall at the Closing deduct from Seller's proceeds and remit to Internal Revenue Service such sum as is
required by applicable Federal law with respect to purchases from foreign sellers.
(c) 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 Buyer 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.
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 Closing Date.
(b) 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 AL T A
extended, if elected by Buyer) owner's form policy oftitle 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.
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 supple~ental 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.
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 Expenses. Utilities and operating expenses shall be prorated as of the date of Closing.
9.4 Security Deposit. All security deposits will be credited or delivered to Buyer upon Closing.
10, Limited Representations and Warranties of Seller and Disclaimers,
10.1 Buyer acknowledges that there is common ownership between individuals or entities that have an
ownership interest in the Buyer and the current tenant at the Property. Therefore, Buyer has had the
opportunity to evaluate the condition of the Property and the viability of the Property for Buyer's business.
Buyer is not relying on Seller's knowledge of the condition of any buildings, structures, or improvements on
the Property, including the condition of the foundation, roof,. walls, building systems, sewer system; whether
the Property and buildings are in compliance with law, and whether there are Hazardous Substance Conditions
on the Property. Buyer is relying solely and exclusively on its own knowledge of the condition of the Property
and its own inspections, if any, and waives any claims against Seller for any tauIts or defects on the Property
or any Hazardous Substance that may be in, on, under, or around the Property, and covenants to disclose to
Seller any defect in the "Property Condition" (as described in this Paragraph 10.1) of which Buyer is aware.
Seller has not made any representation or warranty as to the "Property Condition". "Property Condition"
means and refers to each and every matter of concern or relevance to Buyer relating to the Property, including,
without limitation, the financial, legal, title, physical, geological and environmental condition and sufficiency
of the Property and all improvements and structures thereon; applicable governmental laws, regulations, and
zoning, building codes, and the extent to which the Property complies therewith; the fitness of the Property for
Buyer's contemplated use; the presence of Hazardous Substances; and the value of the Property. Seller hereby
makes only 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 sell, convey and transfer the Property to Buyer as provided herein, and to perform Seller's
obligations hereunder.
(b) Representations in Paragraph 7.1. Nothing set forth in this Agreement negates Seller's
representations set forth in Paragraph 7.1 of this Agreement.
10.2 Buyer hereby acknowledges that Buyer is purchasing the Property in its current "AS IS" condition,
with all faults and that Buyer will, by the time called for herein, make or have waived all inspections of the
Property that Buyer believes are necessary to protect its own interest in, and its contemplated use of, the
Property. The Parties acknowledge that, except as specifically set forth in this Agreement, including
Paragraph 7 hereof, no representations, inducements, promises, agreements, assurances, oral or written,
concerning the Property, the value of the Property, or any aspect of the Property, Hazardous Substance laws,
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or any other act, ordinance or law, have been made by either Party or Seller, or relied upon by Buyer. Seller
has no obligation to repair, correct or compensate Buyer for any Property Condition.
10.3 In the event that Buyer 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, demolition reports, and any other documents
which were prepared by third party consultants and provided to Buyer by Seller or Seller's representatives,
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.
10.5 Upon Closing, Buyer shall be deemed to have waived any and all objections to the Property
Condition, whether or not known to Buyer. Upon Closing, Buyer hereby waives, releases, acquits, and forever
discharges Seller, and Seller's agents, beneficiaries, heirs, successors, and assigns to the maximum extent
permitted by law from any and all claims, actions, causes of action, demands, rights, liabilities, damages, costs
(including, without limitation, reasonable attorneys' fees and costs), losses, expenses, or compensation
whatsoever, direct or indirect, known or unknown, foreseen or unforeseen, that it now has or which may arise
in the future on account of or in any way related to or in connection with the Property Condition, except as set
forth in Paragraph 7.1. BUYER EXPRESSLY WAIVES ANY RIGHTS OR BENEFITS IT MAY HAVE
UNDER CALIFORNIA CIVIL CODE SECTION 1542, WHICH PROVIDES AS FOLLOWS: A GENERAL
RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS FA VOR AT THE TIME OF EXECUTING THE RELEASE WHICH IF
KNOWN BY HIM MUST HA VB MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.
Buyer's Initials (3 managers)
Seller's Initials
11, Possession,
Possession of the Property shall be given to Buyer at the Closing.
12, 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.
13, Attorneys' Fees,
Ifany 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.
14, Prior Agreements/Amendments,
14.1 This Agreement is the entire agreement between the Parties as to the matters described herein, and
supersedes any and all prior negotiations, discussions, writings, documents, and agreements, whether oral or
written, between Seller and Buyer regarding the Property or the transactions contemplated by this Agreement.
14.2 Amendments to this Agreement are effective only ifmade in writing and executed by Buyer and
Seller.
15, Notices,
15.1 Whenever any Party or Escrow Holder 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, or by overnight courier, to the address set
forth in this Agreement or by facsimile transmission.
15.2 Service of any such communication shall be deemed made on the date of actual receipt or refusal to
accept delivery. 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. Ifsuch communication is received on a Friday, Saturday, Sunday or legal
holiday, it shall be deemed received on the next business day.
15.3 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.
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16. Duration of Offer,
16.1 If a signed copy of this offer (with Paragraphs 10.5, and 17 initialed) is not received by Seller on or
before 5:00 P.M. according to the time standard applicable to the city of Los Angeles on the date of December
5,2005, it shall be deemed automatically revoked, and if Seller has not signed this offer by 5:00 P.M. on
January 5, 2006, it shall be deemed automatically revoked.
16.2 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 of a
duly executed writing unconditionally accepting the last outstanding offer or counteroffer.
17, LIQUIDATED DAMAGES, (This Liquidated Damages paragraph is applicable only if initialed by both
Parties.)
THEP ARTIES AGREE THAT IT WOULD BE IMPRACTICABLE OR EXTREMELY DIFFICULT TO
FIX, PRIOR TO SIGNING THIS AGREEMENT, THE ACTUAL DAMAGES WHICH WOULD BE
SUFFERED BY SELLER IF BUYER FAILS TO PERFORM ITS OBLIGATIONS UNDER THIS
AGREEMENT. THEREFORE, IF, AFTER THE SATISFACTION OR WAIVER IN WRITING OF ALL
CONTINGENCIES PROVIDED FOR THE BUYER'S BENEFIT, BUYER BREACHES THIS
AGREEMENT, SELLER SHALL BE ENTITLED TO LIQUIDATED DAMAGES IN THE AMOUNT OF
THE DEPOSIT. UPON PAYMENT OF SAID SUM TO SELLER, BUYER SHALL BE RELEASED FROM
ANY FURTHER LIABILITY TO SELLER, AND ANY ESCROW CANCELLATION FEES AND TITLE
COMPANY CHARGES SHALL BE PAID BY SELLER.
Buyer's Initials (3 managers)
Seller's Initials
18, Miscellaneous,
18.1 Binding Fffect. This Agreement shall be binding on the Parties if signed and if the paragraphs
requiring initials are initialed by both of the Parties.
18.2 Applicable Law. This Agreement shall be governed by the laws of the State of California.
18.3 Time of Essence. Time is of the essence of this Agreement.
18.4 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.
18.5 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.
18.6 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, 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. When the words "business days" are used, the term shall
include Monday through and including Thursday, and shall exclude Friday, Saturday, Sunday, and all
holidays, it being the long time practice of the City of Vernon to be closed on Fridays. 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.
20, Additional Provisions:
See Addendum with Paragraphs 21 through 27.
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:
The undersigned Buyer offers .and agrees to buy the Property on the terms and conditions stated and
acknowledges receipt of a copy hereof.
BUYER:
Fashion Incubator, a California limited liability
company
By:
Name Printed: Jeffrey Best
Title: Manager
Date:
Address:
Telephone:
Facsimile:
Email:
Federal ID No.
By:
Name Printed: Michael Muellerleile
Title: Manager
Date:
Address:
Telephone:
Facsimile:
Email:
Federal ID No.
By:
Name Printed: Kenneth Jones
Title: Manager
Date:
Address:
Telephone:
Facsimile:
Email:
Federal ID No.
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,"
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. Seller acknowledges receipt of a copy hereof and has delivered a
signed copy to Buyer.
SELLER:
City of Vernon
By:
Leonis C. Malburg, Mayor
Attest:
Bruce V. Malkenhorst, Jr.
Acting City Clerk
Approved As to Form
By:
Eric T. Fresch, City Attorney
Address: 4305 Santa Fe Avenue
Vernon, CA 90058
Telephone: 323-583-8811
Fax: 323-826-1438
Dated:
Federal ID No.: 95-6000808
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Addendum to Standard OtTer, Agreement
And Escrow Instructions for Purchase of Real Estate
Buyer:
Seller:
Premises:
Dated:
Fashion Incubator LLC, a California limited liability company
City of Vernon
3375 E, Slauson Avenue, Vernon, California
November 2, 2005
In the event ofa contlict between the terms of the Standard Offer, Agreement and Escrow
Instructions (the "Pre-Printed Agreement") and this Addendum, the terms of this Addendum
shall control. Any initialIy capitalized term used in this Addendum that is not defined herein
shall have the meaning ascribed to such term in the Pre-Printed Agreement. Collectively, the
Pre-Printed Agreement and this Addendum are referred to as the "Purchase Agreement".
21, Buyer's Due Diligence: Other than those items to be provided by Seller in accordance with
Paragraph 7.1, alI other inspections and reports shall be at Buyer's expense. Upon mutual
execution ofthe Purchase Agreement, Buyer shall cause the tenant at the Property (the "Tenant")
to add both the Buyer and the City as an additional insured under the Tenant's existing insurance
coverage, such coverage to remain in full force and effect until the Closing or the termination of
this Purchase Agreement. Buyer and its agents shalI have access to the Property to allow for
necessary inspections and testing; provided, however, that Buyer may not conduct any intrusive
tests or borings without the prior written consent of the Seller, and provided further that Seller
shall arrange any such testing so that a representative of Seller will be present at the testing.
Buyer shall deliver to Seller any analyses, tests, reports, or studies prepared by or for Buyer in
connection with the Property.
Notwithstanding any provisions of this Purchase Agreement to the contrary, Buyer may not
conduct any invasive or other testing of the Property, including but not limited to any soil
borings, groundwater sampling or Phase II site assessment investigation, except on and subject to
the following terms and conditions:
(a) Buyer and its consultant shall submit a proposed work plan ("Work Plan") to
Seller prior to commencing the proposed work and Seller shall have ten (10) business days after
receipt of such Work Plan to object and/or suggest modifications to the Work Plan. In the event
Seller objects and/or suggests modifications to the Work Plan, Buyer and Seller shall attempt to
reach agreement on a mutually acceptable Work Plan, both parties acting diligently and in good
faith. If the parties are unable to agree upon an acceptable Work Plan, either party may
terminate this Purchase Agreement by written notice to the other within ten (IO) days after
reaching such impasse. If the parties are able to agree upon an acceptable Work Plan, Buyer
shall proceed with such Work Plan in accordance with this Paragraph 2 I. Any changes to the
agreed upon Work Plan shall be subject to approval by Seller, which shall not be withheld
unreasonably.
(b) Seller, its agent(s) and/or consultant(s) shall have the right to accompany Buyer
and its consultants on all inspections of the Property and shall have the right to take "split"
samples of all soil, groundwater and other samples collected by Buyer and/or its consultants on,
in, from or at the Property so long as Seller does not unreasonably delay Buyer's inspections of
the Property, and so long as Seller pays for its share of such split samples.
(c) Any environmental documents, reports or information obtained by Buyer or its
consultants with respect to the Property shall be received, held and used confidentially in the
same manner and on the same terms and conditions as the Confidential Documents pursuant to
Paragraph 24 below.
(d) Buyer shall provide copies of all environmental data, documents, reports and
information obtained by Buyer or its consultants with respect to the Property to Seller within five
(5) days after receipt of same.
(e) Tenant or Buyer and the contractors and consultants retained by Buyer shall
provide evidence of additional insurance to cover the invasive or other environmental testing in
01910/0032 127162.2
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amounts and types reasonably satisfactory to Seller. Seller shall be named as an additional
insured under such coverage.
22. Condition of Property: Seller shall deliver the Property to Buyer at the Close of Escrow in
its "AS IS" condition, with all defects and/or environmental impairments accepted with no offset
against the Purchase Price. As a material inducement to the execution and delivery of the
Purchase Agreement by Seller and the performance by Seller of its duties and obligations
hereunder, Buyer does hereby acknowledge, represent, warrant and agree, to and with Seller that,
subject to any express representations and warranties set forth in the Purchase Agreement,
including Paragraph 7 hereof, and subject to law: (a) Buyer is purchasing the Property in its
"AS-IS", "WHERE IS" condition; (b) Seller shall have no obligation to repair or correct any
faults, defects, or conditions with respect to the Property; (c) by ~he expiration of the Due
Diligence Period, Buyer shall have undertaken all such physical inspections and examinations of
the Property as Buyer deems necessary or appropriate under the circumstances, and Buyer is not
relying upon any representations or warranties of Seller (other than those expressly set forth in
the Purchase Agreement); and (d) except for the representations and warranties set forth in the
Purchase Agreement, Seller is not making and has not made any warranty or representation with
respect to all or any part of the Property as an inducement to Buyer to enter into this Purchase
Agreement and thereafter to purchase the Property or for any other purpose.
Except for the obligations, agreements, representations, warranties, and indemnities set forth
in this Purchase Agreement, Buyer hereby releases Seller from any and all rights and claims that
Buyer may on its own allege, assert, or have against Seller with respect to the condition ofthe
Property.
23. Role of City Health Department: It is understood that nothing in this Purchase Agreement
affects or limits the City Health Department's responsibilities in the administration of local, state
and federal law with respevt 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 Purchase Agreement.
24. Confidentiality: All documents provided to Buyer by Seller or its agents, or that Buyer
obtains during the Due Diligence Period that are not otherwise public are confidential and are
referred to herein as the "Confidential Documents". The Confidential Documents will be
provided to Buyer with the understanding and on the condition that they will be received, held
and used confidentially and that copies may be given to third parties only after each such party
has given written assurance to Buyer that it will comply with the confidentiality provisions set
forth in this Paragraph 24; provided, however, that Buyer may provide copies ofthe Confidential
Documents to its accountants, attorneys, consultants, professional advisors, and employees with
a need to know (collectively, the "Permitted Recipients") without obtaining the consent of Seller
and without obtaining written assurances concerning compliance with the confidentiality
provisions set forth herein. Neither Buyer nor any third party may give the Confidential
Documents to any other person or entity (except for the Permitted Recipients) nor disclose any of
the information contained therein to any other person or entity (except for the Permitted
Recipients) without the prior written consent of Seller, except as required by law. Unless and
until Buyer acquires the Property, Buyer and any third party to whom the Confidential
Documents are given in accordance with the preceding sentence shall safeguard the Confidential
Documents against accidental loss or disclosure. If Buyer does not acquire the Property, all
originals and copies of the Confidential Documents shall be returned to Seller upon Seller's
demand. All of Buyer's obligations related to the Confidential Documents shall cease and be of
no further force and effect immediately upon the Closing if Buyer acquires the Property.
25. Exchange: The parties agree to cooperate with one another, at no cost, liability or expense
to the cooperating party, to enable each to accomplish an exchange transaction under Section
1031 of the Internal Revenue Code and to perform any and all further acts as are reasonably
requested to effectuate such an exchange. The foregoing notwithstanding, the party requesting
the cooperation shall not be released from its obligations under this Purchase Agreement on
account of any such assignment. The scheduled Closing Date may be extended by an additional
60 days; however, in such case, Buyer shall be required to increase the Deposit by $25,000 for
each additional 30 day period prior to and as a condition of each such 30 day extension.
01910/0032 127162.2
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26. Operation of Property. Seller shall operate and maintain the Property in substantially the
same manner as prior to Seller's execution of the Purchase Agreement. Seller shall not make or
institute any material changes in such operation and maintenance without the Buyer's prior
written approval, which changes may include but are not limited to the physical alteration of the
Property, tennination of any service or maintenance contracts, or entering into any new leases.
27. Destruction of Property. If the Property is materially damaged or destroyed between the
execution of this Purchase Agreement and the Closing Date, and if the damage or destruction is
not the result of Seller's action or omission, the Purchase Agreement, at Buyer's election, may be
tenninated. If tenninated, Buyer and Seller shall be relieved of any obligation to each other
under this Purchase Agreement and any Deposit shall be returned to Buyer less costs, if any,
pursuant to Paragraph 6.6. If Buyer elects to accept the Property in its then condition, all
proceeds of insurance payable to Seller by reason of such damage or destruction shall be paid to
Buyer upon the successful completion of the transaction contemplated in this Purchase
Agreement.
Executed as of the date first above written.
SELLER:
City of Vernon
By:
Leonis C. Malburg, Mayor
Attest:
Bruce V. Malkenhorst, Jr., Acting City Clerk
Approved As to Fonn
By:
Eric T. Fresch, City Attorney
BUYER:
Fashion Incubator LLC,
a California limited liability company
By:
Jeffrey Best
Its: Manager
By:
Michael Muellerleile
Its: Manager
By:
Kenneth Jones
Its: Manager
0191010032 127162.2
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SUPPORTING
DOCUMENTS
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STANDARD OFFER, AGREEMENT AND ESCROW
INSTRUCTIONS FOR PURCHASE OF REAL ESTATE
(Non-Residential)
November 2, 2005
(Date for Reference Purposes)
1. Buyer
1.1 Fashion Incubator LLC, a California limited liability company ("Buyer") hereby offers to purchase
the real property, hereinafter described, from the City of Vernon ("Seller") (collectively, the "Parties" or
individually, a "Party"), through an escrow ("Escrow") to close on a date mutually agreed to by the Parties
that is 60 calendar days folloWing Buyer's written notice of its election to approve the transaction and close
the Escrow, which notice is to be delivered by Buyer on or before the last day of the Due Diligence Period, as
defined in Paragraph 7.1 ("Closing Date"). The Closing shall be held by Lawyers' Title, 251 S. Lake
Avenue, Suite 400, Pasadena, California 91101 (Attn: Mr. Raul Contreras) ("Escrow Holder"), Phone No.
626-304-2700 or 661-478-1508 (cell), Facsimile No. 626-.795-0788, upon the terms and conditions set forth in
this agreement ("Agreement"). Upon written notice to Seller and Escrow Holder, Buyer may assign this
Agreement to a creditworthy affiliate; provided, however, that no assignment of this Agreement by Buyer
shall be deemed to relieve Buyer of any responsibilities or obligations under this Agreement and Buyer and its
assignee shall be jointly and severally liable under this Agreement and bound by all of its provisions,
including the release provisions contained herein.
1.2 The term "Date of Agreement" shall be the date when by execution and delivery 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 the property located at
3375 E. Slauson Ave., City of Vernon, State of California, consisting of approximately 39,900 square feet, and
with the APN to be determined in Escrow.
2.2 The legal description of the Property shall be completed to meet the requirements of Lawyers' Title
(Attn: Mr. Raul Contreras) ("Title Company"), which shall issue the title policy hereinafter described.
2.3 The Property shall be delivered with all existing structures and improvements in their currently
existing, with all faults, AS IS condition.
2.4 All personal property is specifically excluded from the sale of the Property and will remain the
property of Seller, and be removed from the Property prior to the Close of Escrow; provided, however, that the
pallet jack and the reception area desk/counter top that is attached to the wall shall be part of the Property and
included in the sale to Buyer.
3. Purchase Price
3.1 The purchase price ("Purchase Price") to be paid by Buyer to Seller for the Property shall be
$3,417,000. The Purchase Price shall be payable all cash at the Closing, provided, however, that the Deposit,
as defmed below, shall be applied to the Purchase Price at the Closing. There is no loan contingenc~
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0191010032127161.3
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4. Deposits
4.1 Within two business days following the mutual execution of this Agreement, Buyer will deliver to
Escrow Holder by wire transfer the sum of Twenty-Five Thousand Dollars ($25,000), along with an executed
copy of this Agreement, as a refundable Deposit, subject to payment of Title Company and Escrow Holder
cancellation fees and costs, as described in Paragraph 6.6, and costs of indemnification and repair of any
damages caused by Buyer or its agents, if any.
4.2 Buyer shall wire transfer to Escrow Holder an additional Twenty-Five Thousand Dollars ($25,000)
within two business days following the last day of the "Due Diligence Period" (as defined in Paragraph 7.1)
if Buyer has not terminated this Agreement prior to the last day of the Due Diligence Period.
4.3 Escrow Holder shall deposit the funds deposited with it by Buyer pursuant to Paragraphs 4.1 and
4.2 (collectively, 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 . NOTE: Such interest bearing account cannot be opened until Buyer's
Federal Tax Identification number is provided. Buyer must give prior written approval to any instrument
purchased by the Escrow Holder with the Deposit.
4.4 . After the last day ofthe Due Diligence Period, the Deposit shall be non-refundable to Buyer, but
shall be fully applicable to the.Purchase Price. If Buyer does not give written notice of its election to approve
the transaction on or before the last day of the Due Diligence Period, the Deposit shall be refundable, subject
to the terms of Paragraphs 4.1 and 6.6.
5. Real Estate Brokers
Buyer is represented by Colliers Seeley ("Broker"), and Seller is not represented by a broker. Buyer
and Seller each represent and warrant to the other that, except for Broker, Buyer and Seller have had no
dealings with any person, firm, broker or finder in connection with the negotiation of this Agreement or the
consummation of the purchase and sale contemplated herein, and no other broker or other person, firm or
entity, 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 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 ofthe
indemnifying Party, except for Seller's obligation to compensate Broker in accordance with the terms ofa
separate agreement between Seller and Broker, which commission shall be payable out of the Escrow if and
only if there is a Closing.
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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. Subject to the reasonable approval of the Parties, Escrow Holder may, however,
include its standard general escrow provisions; provided, however, that in the event of a conflict between the
terms of this Agreement, and Escrow Holder's instructions, the terms of this Agreement shall control.
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 Paragraph 1.2 and advise the Parties, 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 auy reporting requirements of the Internal Revenoe Code. t:Y'
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6.3 Subject to satisfaction or waiver of the Buyer's Contingencies, Escrow Holder shall close this
Escrow (the "Closing" or the "Close of Escrow") 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 additional
endorsements or AL T A coverage, if obtained by Buyer.
6.5 Escrow Holder shall verify that all of Buyer's Contingencies have been satisfied or waived in
writing prior to Closing. --
6.6 If this transaction is terminated for non-satisfaction and non-waiver of a Buyer's Contingency, as
defined in Paragraph 7.1, 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, unless termination is caused by Seller's breach, default, or the election of Seller per the terms of
this Agreement to terminate the Escrow, in which case, Seller shall be responsible for such costs. In addition,
Buyer shall pay any costs of indemnification required hereunder and repair of any damages caused by Buyer
or its agents.
6.7 The Closing shall occur on the Closing Date, or as soon thereafter as the Escrow is in condition for
Closing; provided, however, that ifthe Closing does not occur within 15 days after the Closing Date and said
Closing 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 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. ,"
6.9 If this Escrow is terminated for any reason other than Seller's breach or default, then at Seller's
request, and as a condition to the return of Buyer's deposit, Buyer shall within 5 business days after written
request deliver to Seller, at no charge, copies of all surveys, engineering studies, soil reports, maps, master
plans, feasibility studies and other similar items prepared by or for Buyer that pertain to the Property,
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0191010032127161.3
PAGE 3
(a) Disclosure. Seller shall make to Buyer, through Escrow, all ofthe applicable disclosures
required by law (per AIR Commercial Real Estate Association ("AIR") standard form entitled "Seller's
Mandatory Disclosure Statement") and provide Buyer with a completed Property Information Sheet
("Property Information Sheet") concerning the Property, duly executed by or on behalf of Seller in the
current form or equivalent to that published by the AIR within 7 business days following the Date of
Agreement. All disclosures set forth in the Seller's Mandatory Disclosure Statement and the Property
Information Sheet shall be true and correct to the current actual knowledge of Kevin Wilson, the Director of
Community Services, without duty of investigation, and with the understanding that Seller has recently
acquired the Property. Seller shall deliver to Buyer a report paid for by Seller and prepared by a professional
provider containing the Natural Hazard Disclosures concerning the Property. Unless otherwise noted by
Seller to Buyer in writing, Seller is unaware of any inaccuracies in the Natural Hazard Disclosures. Seller
shall provide to Buyer, within 7 business days following the Date of Agreement, all materials in Seller's
possession or reasonably available to Seller that affectthe nature or use of the Property, including, but not
limited to, environmental reports (including any existing Phase I environmental survey in the possession of the
Seller), demolition reports, all as-built building plans and CAD files, landscaping and topography plans,
certificate of occupancy, and copies of any written contracts, agreements, or warranties that affect the
Property, including all maintenance contracts and service agreements. All documents provided to Buyer that
were prepared by third parties are subject to the terms of-Paragraph 10.4. Buyer may request in writing
specific documentation or information from Seller during the Due Diligence Period, and if Seller is unable to
provide Buyer specific documentation or information as required herein, Seller shall promptly inform Buyer
of such in writing. Notwithstanding the generality ofthe foregoing, Seller shall not provide copies of any
appraisals, internal analyses, valuations, or memorandum, or any attorney-client documents related to the
Property, if any, or any operating income and expense documentation, such as rent rolls, leases, costs of
insurance or taxes, or other similar documents. Seller will use its reasonably diligent efforts to deliver to
Buyer the requested documentation, but does not warrant that it will find every document, report, or file
related to the Property, as such documents may be located in various different files in different departments,
held by different personnel.
(b) Physical Inspection. Buyer has 45 days from the Date of Agreement to satisfy itself with
regard to the physical aspects and size of the Property.
(c) Hazardous Substance Conditions Report. Buyer has 45 days from the Date of Agreement to
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 has 45 days from the Date of Agreement to 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.
(e) Governmental Approvals. Buyer has 45 days from the Date of Agreement to 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.
(t) Conditions of Title. Escrow Holder shall cause a preliminary title report ("Title Report")
concerning the Property issued by the Title Company, as well as legible copies of all documents referre i
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the Title Commitment ("Underlying Documents") to be delivered to Buyer within 15 calendar days following
the Date of Agreement. Buyer has 45 days from the Date of Agreement to 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 has 45 days from the receipt of the Title Report and Underlying Documents to
satisfy itself with regard to any AL T A title supplement based upon a survey prepared to American Land Title
Association ("AL T A") 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 survey and approved the AL T A title supplement,
Buyer may elect within the period allowed for Buyer's approval of a survey to have an AL T A 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 calendar days from the Date of Agreement provide
Buyer with legible copies of all other agreements ("Other Agreements") readily available to Seller that will
affect the Property after Closing. Buyer has45 days from the receipt of said Other Agreements.to satisfy itself
with regard to such Agreements.
(i) 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.
(j ) Warranties. That 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. To the actual knowledge, without duty of inquiry, of the Director
of Community Services of the City of Vernon, Seller has not failed to disclose a material fact of importance to
the Buyer in regard to the condition of the Property that was known to the Director of Community Services of
the City of Vernon; provided, however, that Seller shall not be liable for a breach of this representation and
warranty if such material fact was actually known or suspected or should have been known or
suspected by Buyer as a result of Buyer's prudent due diligence or Buyer's use and occupancy as a tenant at
the Property. The Director of Community Services is the Supervisor of the Department that manages, among
other departments, the Building Division and the Planning Division of the City of Vernon and is therefore the
person probably most qualified and knowledgeable to make the above representation. This warranty shall
survive for a period of six months following the Close of :Escrow.
7.2 All of the contingencies specified in the sub-paragraphs of Paragraph 7.1 are for the benefit of, and
may be waived by, Buyer.
7.3 If any Buyer's Contingency or any other matter subject to Buyer's approval is disapproved as
provided for herein in a timely manner ("Disapproved Item"), Seller shall have the right within 10 days
following the receipt of notice of Buyer's disapproval to elect to cure such Disapproved !tern prior to the
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 Closing Date shall be conclusively
presumed to be Seller's 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 Seller's 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, the time
periods for the Due Diligence Period and the Closing Date shall each be deemed extended by the cumul ~
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business days during which the elections of Buyer and Seller are satisfied for Disapproved Items as described
above.
7.4 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 Buyer acknowledges that it has been advised by Seller to consult its Own
technical and legal experts with respect to the possible presence of Hazardous Substances on the Property or
adjoining properties, and Buyer is not relying upon any investigation by or statement of Seller with respect
thereto. Buyer assumes all responsibility for the impact of such Hazardous Substances.
7.5 Notwithstanding anything else herein to the contrary, prior to the expiration of Due Diligence
Period, Buyer may terminate this Agreement in its sole and absolute discretion, and any deposits shall be
refunded to Buyer, less costs, if any pursuant to Paragraphs 6.6 and 4.1.
8. Documents Required at or before Closing:
8.1 By 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) 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 Buyer at least 3 business days prior to the Closing, Escrow Holder
shall at the Closing deduct from Seller's proceeds and remit to Internal Revenue Service such sum asis
required by applicable Federal law with respect to purchases from foreign sellers.
(c) 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 Buyer 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.
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 Closing Date.
(b) 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 by Buyer) 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.
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 sup'plemental 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.
9.2 Insurance. WARNING: Any insurance which Seller may have maintained will terminate on t
Closing. Buyer is advised to obtain appropriate insurance to cover the Property.
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9.3 Expenses. Utilities and operating expenses shall be prorated as of the date of Closing.
9.4 Security Deposit. All security deposits will be credited or delivered to Buyer upon Closing.
10. Limited Representations and Warranties of Seller and Disclaimers.
10.1 Buyer acknowledges that there is common ownership between individuals or entities that have an
ownership interest in the Buyer and the current tenant at the Property. Therefore, Buyer has had the
opportunity to evaluate the condition of the Property and the viability of the Property for Buyer's business.
Buyer is not relying on Seller's knowledge ofthe condition of any buildings, structures, or improvements on
the Property, including the condition ofthe foundation, roof, walls, building systems, sewer system; whether
the Property and buildings are in compliance with law, and whether there are Hazardous Substance Conditions
on the Property. Buyer is relying solely and exclusively on its own knowledge of the condition ofthe Property
and its own inspections, if any, and waives any claims against Seller for any faults or defects on the Property
or any Hazardous Substance that may be in, on, under, or around the Property, and covenants to disclose to
Seller any defect in the "Property Condition" (as described in this Paragraph 10.1) of which Buyer is aware.
Seller has not made any representation or warranty as to the "Property Condition". "Property Condition"
means and refers to each and every matter of concern or relevance to Buyer relating to the Property, including,
without limitation, the financial, legal, title, physical, geological and environmental condition and sufficiency
of the Property and all improvements and structures thereon; applicable govemmentallaws, regulations, and
zoning, building codes, and the extent to which the Property complies therewith; the fitness of the Property for
Buyer's contemplated use; the presence of Hazardous Substances; and the value of the Property. Seller hereby
makes only 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 sell, convey and transfer the Property to Buyer as provided herein, and to perform Seller's
obligations hereunder.
(b) Representations in Paragraph 7.1. Nothing set forth in this Agreement negates Seller's
representations set forth in Paragraph 7.1 of this Agreement.
10.2 Buyer hereby acknowledges that Buyer is purchasing the Property in its current "AS IS" condition,
with all faults and that Buyer will, by the time called for herein, make or have waived all inspections of the
Property that Buyer believes are necessary to protect its own interest in, and its contemplated use of, the
Property. The Parties acknowledge that, except as specifically set forth in this Agreement, including
Paragraph 7 hereof, no representations, inducements, promises, agreements, assurances, oral or written,
concerning the Property, the value of the Property, or any aspect of the Property, Hazardous Substance laws,
or any other act, ordinance or law, have been made by either Party or Seller, or relied upon by Buyer. Seller
has no obligation to repair, correct or compensate Buyer for any Property Condition.
10.3 In the event that Buyer 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, demolition reports, and any other documents
which were prepared by third party consultants and provided to Buyer by Seller or Seller's representatives,
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.
,10.5 Upon Closing, Buyer shall be deemed to have waived any and all objections to the Property
Condition, whether or not known to Buyer. Upon Closing, Buyer hereby waives, releases, acquits, and forever
discharges Seller, and Seller's agents, beneficiaries, heirs, successors, and assigns to the maximum extent
permitted by law from any and all claims, actions, causes of action, demands, rights, liabilities, damages, costs
(including, without limitation, reasonable attorneys' fees and costs), losses, expenses, or compensation
whatsoever, direct or indirect, known or unknown, foreseen or unforeseen, that it now has or which may arise
in the future on account of or in any way related to or in connection with the Property Condition, except s
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forth in Paragraph 7.1. BUYER EXPRESSL Y WAIVES ANY RIGHTS OR BENEFITS IT MA Y HAVE
UNDER CALIFORNIA CIVIL CODE SECTION 1542, WHICH PROVIDES AS FOLLOWS: A GENERAL
RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIS HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE WHICH IF
KNOWN BY U T HAVE MILLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.
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Seller's Initials
11. Possession.
Possession of the Property shall be given to Buyer at ~~e Closing.
12. 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.
13. 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.
14. Prior Agreements/Amendments.
14.1 This Agreement is the entire agreement between the Parties as to the matters described herein, and
supersedes any and all prior negotiations, discussions, writings, documents, and agreements, whether oral or
written, between Seller and Buyer regarding the Property or the transactions contemplated by this Agreement.
14.2 Amendments to this Agreement are effective only ifmade in writing and executed by Buyer and
Seller.
15. Notices.
15.1 Whenever any Party or Escrow Holder 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, or by overnight courier, to the address set
forth in this Agreement or by facsimile transmission.
15.2 Service of any such communication shall be deemed made on the date of actual receipt or refusal to
accept delivery. 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 Friday, Saturday, Sunday or legal
holiday, it shall be deemed received on the next business day.
15.3 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.
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16. Duration of Offer.
16.1 If a signed copy of this offer (with Paragraphs 10.5, and 17 initialed) is not received by Seller on or
before 5:00 P.M. according to the time standard applicable to the city of Los Angeles on the date of December
5, 2005, it shall be deemed automatically revoked, and if ~eller has not signed this offer by 5:00 P.M. on
January 5, 2006, it shall be deemed automatically revoked.
16.2 The acceptance ofthis 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 of a
duly executed writing unconditionally accepting the last outstanding offer or counteroffer.
17. LIQUIDATED DAMAGES. (This Liquidated Damages paragraph is applicable only ifinitialed by both
Parties.)
THE PARTIES AGREE THAT IT WOULD BE IMPRACTICABLE OR EXTREMELY DIFFICULT TO
FIX, PRIOR TO SIGNING THIS AGREEMENT, THE ACTUAL DAMAGES WHICH WOULD BE
SUFFERED BY SELLER IF BUYER FAILS TO PERFORM ITS OBLIGATIONS UNDER THIS
AGREEMENT. THEREFORE, IF, AFTER THE SATISFACTION OR WAIVER IN WRITING OF ALL
CONTINGENCIES PROVIDED FOR THE BUYER'S BENEFIT, BUYER BREACHES THIS
AGREEMENT, SELLER SHALL BE ENTITLED TO LIQUIDATED DAMAGES IN THE AMOUNT OF
THE DEPOSIT. UPON PAYMENT OF SAID SUM TO SELLER, BUYER SHALL BE RELEASED FROM
ANY FURTHER LIABILITY TO LLER, AND ANY ESCROW CANCELLATION FEES AND TITLE
COMPANY C GE AL E PAl BY SELLER.
~uYer'S lniti
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Seller's Initials
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18. Miscellaneous.
18.1 Binding Effect. This Agreement shall be binding on the Parties if signed and if the paragraphs
requiring initials are initialed by both of the Parties.
18.2 Applicable Law. This Agreement shall be governed by the laws of the State of California.
18.3 Time of Essence. Time is of the essence of this Agreement.
18.4 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.
18.5 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.
18.6 Coriflict. 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. 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 indic~ted to the contrary, the word "days" as used in this
Agreement shall mean and refer to calendar days. When the words "business days" are used, the term shall
include Monday through and including Thursday, and shall exclude Friday, Saturday, Sunday, and all
holidays, it being the long time practice of the City of Vernon to be closed on Fridays. 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 i
both Parties had prepared it.
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20. Additional Provisions:
See Addendum with Paragraphs 21 through 27.
The undersigned Buyer offers and agrees to buy the Property on the terms and conditions stated and
acknowledges receipt of a copy hereof.
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01910/0032127161.3
BUYER:
Fashion Incubator, a California limited liability
company
::e Print~
Title: Manag~ J 01 01
Dale: I J./( t;S {'
Address: 3t 'f 1J. 'lIl6/t:-
0t C~ CflJAP
Telephone: gz,.'? 't~=t
Facsimile: 3-z-:> 'l9t.t7:><;J _
Email: J{f--er~~es~a.. ~
Federal ID No. 9-fL?Ll &? (p 0
~
Name Printed: Michael Muellerleile
By:
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Telephone:
Facsimile:
Email:
By:
Title: Manager
PAGE 10
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InitialJVb
Date:. I\)~~~
Address: ~1" I ~ rm;2.
~ ~L-"~, ~ c:::; I 3<='1-
,
Telephone:~tO Z7~ ~
Facsimile: ~ 27~ ZA '71:J
En:ail: ~..-J~~~L-~~
Fe'defal ID No~ 2'1 . T24
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PAGE 11
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0191010032127161.3
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. Seller acknmyledges receipt of a copy hereof and has delivered a
signed copy to Buyer.
SELLER:
City of Vernon
By: 4
LeO:;i C. Malburg, May
Attest:
Acting City Clerk
."
Approved As to Form
~~~T.C:&
Address: 4305 Santa Fe Avenue
Vernon, CA 90058
Telephone: 323-583-8811
Fax: 323-826-1438
Dated:
Federal ID No.: 95-6000808
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Addendum to Standard Offer, Agreement
And Escrow Instructions for Purchase of Real Estate
Buyer:
Seller:
Premises:
Dated:
Fashion Incubator LLC, a Califoruia limited liability company
City of V crnon
3375 E. Slauson Avenue, Vernon, California
November 2, 2005
In the event of a conflict between the terms of the Standard Offer, Agreement and Escrow
Instructions (the "Pre-Printed Agreement") and this Addendum, the terms of this 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 Agreement. Collectively, the
Pre-Printed Agreement and this Addendum are referred to as the "Purchase Agreement".
21. Buyer's Due Diligence: Other than those items to be provided by Seller in accordance with
Paragraph 7.1, all other inspections and reports shall be at Buyer's expense. Upon mutual
execution of the Purchase Agreement, Buyer shall cause the tenant at the Property (the "Tenant")
to add both the Buyer and the City as an additional insured under the Tenant's existing insurance
coverage, such coverage to remain in full force and effect until the Closing or the termination of
this Purchase Agreement. Buyer and its agents shall have access to the Property to allow for
necessary inspections and testing; provided, however, that Buyer may not conduct any intrusive
tests or borings without the prior written consent of :the Seller, and provided further that Seller
shall arrange any such testing so that a representative of Seller will be present at the testing.
Buyer shall deliver to Seller any analyses, tests, reports, or studies prepared by or for Buyer in
connection with the Property.
Notwithstanding any provisions of this Purchase Agreement to the contrary, Buyer may not
conduct any invasive or other testing of the Property, including but not limited to any soil
borings, groundwater sampling or Phase II site assessment investigation, except on and subject to
the following terms and conditions:
(a) Buyer and its consultant shall submit a proposed work plan ("Work Plan") to
Seller prior to commencing the proposed work and Seller shall have ten (10) business days after
receipt of such Work Plan to object and/or suggest modifications to the Work Plan. In the event
Seller objects and/or suggests modifications to the Work Plan, Buyer and Seller shall attempt to
reach agreement on a mutually acceptable Work Plan, both parties acting diligently and in good
faith. If the parties are unable to agree upon an acceptable Work Plan, either party may
terminate this Purchase Agreement by written notice to the other within ten (10) days after
reaching such impasse. If the parties are able to agree upon an acceptable Work Plan, Buyer
shall proceed with such Work Plan in accordance with this Paragraph 21. Any changes to the
agreed upon Work Plan shall be subject to approval by Seller, which shall not be withheld
unreasonably.
(b) Seller, its agent(s) and/or consultant(s) shall have the right to accompany Buyer
and its consultants on all inspections of the Property and shall have the right to take "split" W;2/.1/
0191010032127162.2 I \J' !/ '(J J'
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samples of all soil, groundwater and other samples collected by Buyer and/or its consultants on,
in, from or at the Property so long as Seller does not unreasonably delay Buyer's inspections of
the Property, and so long as Seller pays for its share of such split samples.
(c) Any environmental documents, reports or information obtained by Buyer or its
consultants with respect to the Property shall be received, held and used confidentially in the
same manner and on the same terms and conditions as the Confidential Documents pursuant to
Paragraph 24 below.
(d) Buyer shall provide copies of all environmental data, documents, reports and
information obtained by Buyer or its consultants with respect to the Property to Seller within five
(5) days after receipt of same.
(e) Tenant or Buyer and the contractors and consultants retained by Buyer shall
provide evidence of additional insurance to cover the invasive or other environmental testing in
amounts and types reasonably satisfactory to Seller:" Seller shall be named as an additional
insured under such coverage.
22. Condition of Property: Seller shall deliver the Property to Buyer at the Close of Escrow in
its "AS IS" condition, with all defects and/or environmental impairments accepted with no offset
against the Purchase Price. As a material inducement to the execution and delivery of the
Purchase Agreement by Seller and the performance by Seller of its duties and obligations
hereunder, Buyer does hereby acknowledge, represent, warrant and agree, to and with Seller that,
subject to any express representations and warranties set forth in the Purchase Agreement,
including Paragraph 7 hereof, and subject to law: (a) Buyer is purchasing the Property in its
"AS-IS", "WHERE IS" condition; (b) Seller shall have no obligation to repair or correct any
faults, defects, or conditions with respect to the Property; (c) by the expiration of the Due
Diligence Period, Buyer shall have undertaken all such physical inspections and examinations of
the Property as Buyer deems necessary or appropriate under the circumstances, and Buyer is not
relying upon any representations or warranties of Seller (other than those expressly set forth in
the Purchase Agreement); and (d) except for the representations and warranties set forth in the
Purchase Agreement, Seller is not making and has not made any warranty or representation with
respect to all or any part of the Property as an inducement to Buyer to enter into this Purchase
Agreement and thereafter to purchase the Property or for any other purpose.
Except for the obligations, agreements, representations, warranties, and indemnities set forth
in this Purchase Agreement, Buyer hereby releases Seller from any and all rights and claims that
Buyer may on its own allege, assert, or have against Seller with respect to the condition of the
Property.
23. Role of City Health Department: It is understood that nothing in this Purchase 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 Purchase Agreement.
0191010032127162.2
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24. Confidentiality: All documents provided to Buyer by Seller or its agents, or that Buyer
obtains during the Due Diligence Period that are not otherwise public are confidential and are
referred to herein as the "Confidential Documents". The Confidential Documents will be
provided to Buyer with the understanding and on the condition that they will be received, held
and used confidentially and that copies may be given to third parties only after each such party
has given written assurance to Buyer that it will comply with the confidentiality provisions set
forth in this Paragraph 24; provided, however, that Buyer may provide copies of the Confidential
Documents to its accountants, attorneys, consultants; professional advisors, and employees with
a need to know (collectively, the "Permitted Recipients") without obtaining the consent of Seller
and without obtaining written assurances concerning compliance with the confidentiality
provisions set forth herein. Neither Buyer nor any third party may give the Confidential
Documents to any other person or entity (except for the Permitted Recipients) nor disclose any of
the information contained therein to any other person or entity (except for the Permitted
Recipients) without the prior written consent of Seller, except as required by law. Unless and
until Buyer acquires the Property, Buyer and any third party to whom the Confidential
Documents are given in accordance with the preceding sentence shall safeguard the Confidential
Documents against accidental loss or disclosure. If Buyer does not acquire the Property, all
originals and copies of the Confidential Documents shall be returned to Seller upon Seller's
demand. All of Buyer's obligations related to the Confidential Documents shall cease and be of
no further force and effect immediately upon the Closing if Buyer acquires the Property.
25. Exchange: The parties agree to cooperate with one another, at no cost, liability or expense
to the cooperating party, to enable each to accomplish an exchange transaction under Section
1031 of the Internal Revenue Code and to perform any and all further acts as are reasonably
requested to effectuate such an exchange. The foregoing notwithstanding, the party requesting
the cooperation shall not be released from its obligations under this Purchase Agreement on
account of any such assignment. The scheduled Clo~ing Date may be extended by an additional
60 days; however, in such case, Buyer shall be required to increase the Deposit by $25,000 for
each additional 30 day period prior to and as a condition of each such 30 day extension.
26. Operation of Property. Seller shall operate and maintain the Property in substantially the
same manner as prior to Seller's execution of the Purchase Agreement. Seller shall not make or
institute any material changes in such operation and maintenance without the Buyer's prior
written approval, which changes may include but are not limited to the physical alteration of the
Property, termination of any service or maintenance contracts, or entering into any new leases.
27. Destruction of Property. Ifthe Property is materially damaged or destroyed between the
execution of this Purchase Agreement and the Closing Date, and if the damage or destruction is
not the result of Seller's action or omission, the Purchase Agreement, at Buyer's election, may be
terminated. If terminated, Buyer and Seller shall be relieved of any obligation to each other
under this Purchase Agreement and any Deposit shall be returned to Buyer less costs, if any,
pursuant to Paragraph 6.6. If Buyer elects to accept the Property in its then condition, all
proceeds of insurance payable to Seller by reason of such damage or destruction shall be paid to
Buyer upon the successful completion of the transaction contemplated in this Purchase
Agreement.
,"
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01910/0032127162.2
~"
3
Executed as of the date first above written.
01910/0032127162.2
."
SELLER:
City of Vernon
By: /.
LeOi';i C. Malburg, Mayor
Attest:~
Bruce V. Malkenhorst, Jr., Acting City Clerk
Approved As to Form
BY:C~
Eric 1. Fresch, City. ttorney
BUYER:
Fashion Incubator LLC,
a California limited liability co
By:
Jeffrey B
Its: Manager
By:
hael Muellerleile
Its: Manager
By:
4
A, \
l,.
~
RECORDING REQUESTED BY
LandAmerica Lawyers Title
WHEN RECORDED MAIL TO:
The City of Vernon
4305 Santa Fe Avenue
Vernon, CA 90058
Attn: Bruce V. Malkenhorst, Jr.
MAIL TAX STATEMENTS TO:
Exempt
THE SPACE ABOVE IS FOR RECORDER'S USE
GRANT DEED
APN: 6310-004-900
Escrow No.: 09400359-904-LA
Title No.: 09501568
DOCUMENTARY TRANSFER TAX IS NONE - NOT REQUIRED SEC. 11922
REVENUE TAXATION CODE.
FOR VALUABLE CONSIDERATION, RECEIPT OF WHICH IS HEREBY
ACKNOWLEDGED,
The Redevelopment Agency of The City of Vernon (the "Grantor")
HEREBY GRANT(S) TO:
The City of Vernon, a body corporate and politic (the "Grantee")
All of its right, title, and interest in and to the following described real property, in the.
City of Vernon, County of Los Angeles, State of California:
Legal description attached hereto and made a part hereof as Exhibit "A". Commonly
known as 3375 E. Slauson Avenue, Vernon, California 90023
01910/0032 137884.1
The Property is accepted subject to the following covenant required by the
Redevelopment Agency of the City of Vernon:
The Grantee herein covenants by and for itself, its heirs, executors, administrators, and
assigns, and all persons claiming under or through it, that there shall be no discrimination
against or segregation of, any person or group of persons on account of race, color, creed,
religion, sex, marital status, national origin, or ancestry in the sale, lease, sublease,
transfer, use, occupancy, tenure, or enjoyment of the premises herein conveyed, nor shall
the Grantee or any person claiming under or through it, establish or permit any such
practice or practices of discrimination or segregation with reference to the selection,
location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees
in the premises herein conveyed. The foregoing covenants shall run with the land.
Date: 5 (q /t;(p
, 2006
"Grantor":
The Redevelopment Agency of the City of
Vernon
BY:~~
LeOii"is C.Malburg, ChaO
Ary
\...~
Approved As to Form:
Karns & Karabian, General Counsel
By:
. I
Name:: effHarrison
01910/0032137884.1
STATE OF CALIFORNIA )
) SS.
COUNTY OF LOS ANGELES )
..
ON SlQlo6 . , BEFORE ME, 1It'l'UIe-U t7I/"1fV1 ,
NOTARY PUBLIC, PERSONALLY APPEARED ?eM /5 (!. M~t"t<.A-~
PERSONALLY KNOWN TO ME (OR PROVED
TO ME ON TilE BASIS OF SATISFACTOR"{ EVIDENCE) TO BE THE PERSON(.s-)
WHOSE NAMEfS) IS/.ARE SUBSCRIBED TO THE WITHIN INSTRUMENT AND
ACKNOWLEDGED TO ME THAT HE/SIIEITIIEry EXECUTED THE SAME IN
HIS/HER/TIIEIR AUTHORIZED CAP ACITY(IES), AND THAT BY HIS/HER/TIIBIR
SIGNA TUREfS") ON THE INSTRUMENT THE PERSON$), OR THE ENTITY UPON
BEHALF OF WHICH THE PERSON€B1 ACTED, EXECUTED THE INSTRUMENT.
TNESS MY HAND AND OFFICIAL SEAL.
"
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'8 . tI=-*'6"'" 1
r : --"- j
10I Angeles Coun1y _
.. _ _ Mv~~~~,!:2~ .
01910/0032137884.1
(NOTARY SEAL)
. .
EXHIBIT A
LEGAL DESCRIPTION OF 3375 EAST SLAUSON AVENUE
VERNON, CALIFORNIA
01910/0032137884.1
CERTIFICATE OF ACCEPTANCE
This is to ~ertify that the interest in real property conveyed by Grant Deed dated
:r /1 ,2006, from The Redevelopment Agency of the City of Vernon
("Agency"), a political corporation and/or governmental agency, to the City of Vernon, a
political corporation and/or governmental agency, for the property commonly known as
3375 E. Slauson Avenue, Vernon, California, is hereby accepted by the undersigned
officer( s) on behalf of the City Council of said City pursuant to authority conferred by
Resolution No. 8257 of the City Council of said City adopted on August 6, 2003, and the
City consents to the recordation thereof by its duly authorized officer(s).
Date:
5/~ ;btp
City of Vernon
~~
eonis C. Malb Mayor
APPROVED-AS TO FORM:
~
Eric T. Fresch,
Property: Assessor's Parcel No. 6310-004-900
01910/0032 137884.1
EXHIBIT U AN
"LEGAL DESCRIPTION"
T~~T PORTION OF THE RANCHO SAN ANTONIO IN THE CITY OF VERNON,
COUNTY OF LOS ANGELES, STATE OF CALIFORNIA BEING A PART OF '1'HE
HOLDINGS OF THE INDUSTRIAL CENTRE CORPORATION, AS PER DEED
RECORDED IN BOOK 6744, PAGE 36 OF DEEDS, RECORDS OF LOS ANGELES
COUNTY, STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS:
BEGINNING AT A POINT SOUTH 89- 57' 01" EAST NINE HUNDRED 'TWELVE
AND FIFTEEN HUNDREDTHS FEET (912.15) FROM THE SOUTHEAST CORNER 'OF
THE LAND CONVEYED TO SYLVESTER L. WEAVER, AS PER DEED RECORDED IN
BOOK 753, PAGE 18 OF OFFICIAL RECORDS OF S~D COUNTY, SAID POINT
BEING ON A NORTHERLY LINE OF SLAUSON AVENUE PRODUCED EASTERLY;
THENCE NORTH 1- 07'. 4 j" WEST SIX HUNDRED THIRTY-THREE AND
SIXTY-FOUR HUNDREDTHS (633.64) FEET, THENCE 'NORTHWESTERLY ON A
TANGENT CURVE CONCAVE TO THE SOUTHWEST, WITH A RADIUS OF TWO
HUNDRED SEVENTY-SEVEN AND NINE HIDfDRED THIRTY-NINE THOUSANDTHS
FEET (277.939) FEET AND A CENTRAL ANGLE OF 69- 48' 56" THREE
HUNDRED THIRTY-EIGHT .AND SIXTY-SEVEN HUNDREDTHS FEET; THENCE NORTH
70. 56' 39" WEST. TWENTY AND THREE HUNDRED FORTY-FOUR THOUSANDTHS
FEET, THENCE NORTHWESTERLY ON A TANGENT CURVE CONCAVE TO THE
SOUTHWEST, WITH A ~DIUS OF FOUR HUNDRED FIFTY-ONE AND THREE
HUNDRED EIGHTY-FOUR THOUSANDTHS FEET AND A CENTRAL ANGLE or 8. 10'
16" SIXTY-FOUR AND THIRTY-SEVEN HUNDREDTHS FEET, THBNCE'NORTH 10-
53' OS" EAST ONE AND FIFTY HUNDREDTHS FEET TO 'tHE SOUTHWESTERLY
RIGHT OF WAY LINE OF THE LOS ANGELES AND SALT LAKE 'RAILROAD,
THENCE SOUTH 79. 06' 55" EAST ONE HUNDRED SIXTY:-THREE AND
FIFTY-FOUR HUNOREDTHS FEE'!', ~NG THE SOUTHWESTERLY RIGHT OF WAY
LINE OF THE LOS ANGELES AND SALT LAXE RAILROAD TO THE WESl' LINE OF
THE LAND DESCRIBED IN DEED RECORDED IN BOOK 1647, PAGE 167,
OFFICIAL RECORDS OF SAID COUNTY 1 THENCE ALONG THE WEST LINE OF THE
LAND DESCRIBED IN SAID DEED, SOUTH 10. 53' 05" WEST ONE AND FIFTY
HUNDREDTHS FEET; THENCE STILL ALONG SAID WESTERLY LINE
SOUTHEASTERLY ON A TANGENT CURVE CON~VE TO THE SOUTHWEST WITH A
RADIUS OF FOUR. HUNDRED FIFTY ONE AND THREE HUNDRED EIGHTY-FOUR
THOUS~DTHS FEET, SIXTY-FOUR AND THIRTY-SEVEN HUNDREDTHS FEET,
THENCE SOUTH 70. 56' 39" EAST TW,ENTY AND THREE, HUNDRED FORTY-FOUR
THOUSANDTHS FEET, THENCE SOUTHEASTERLY ON A TANGENT CURVE CONCAVE
TO THE SOUTHWEST WITH A RADIUS OF TWO HUNDRED SEVENTY.-SEVEN AND
NINE HUNDRED THIRTY-NINE THOUSANDTHS FEET AND A CENTRAL ANGLE OF
690 48' 56", 338.61 FEET; THENCE SOUTH 10 01' 43" EAST 602.61 FEET
'1'0 THE SOU'rHWEST CORNER OF THE LAND DESCRIBED IN SAID LAST
MENTIONED DEED, THENCE NORTH 898 57' 01'" WEST 160 FEET TO THE
POINT OF BEGINNING.
EXCEPT THAT PORTION OF SAID LAND LYING NORTHERLY OF THAT CERTAIN,
SOUTHERLY LINE OF PARCEL 2 OF PARCEL MAP NO. 1685~, FILED IN BOOK
177 PAGE 63 OF PARCEL MAPS' OF SAID COUNTY, HAVING A BEARING OF
NORTH 890' 56' 39" WEST AND A LENGTH OF 160.46 FEET.
60-04993-62