Resolution No. 92441
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
RESOLUTION NO. 9244
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 FOR THE
PURCHASE BY AND BETWEEN THE CITY OF VERNON AND DP
VERNON, LLC FOR PROPERTY LOCATED AT 5001 S. SOTO
STREET
WHEREAS, the City of Vernon desires to sell certain real
property in the City consisting of approximately'228,076 square feet
(approximately 5.24,acres) of unimproved property, commonly known as
5001 S. Soto Street in the City of Vernon (the "Property") to DP
Vernon, LLC ("DP Vernon") for approximately $7,526,508.00 for future
development; and
WHEREAS, the City has agreed to sell the Property to DP
Vernon on negotiated terms, which the City has determined to be fair
and reasonable; and
WHEREAS, City staff have recommended that the Property be
sold and the necessary documents executed to implement the sale.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF VERNON AS FOLLOWS:
SECTION 1: The City Council of the City of Vernon hereby
finds and determines that the recitals contained hereinabove are true
and correct.
SECTION 2: The City Council of the City of Vernon hereby
approves the Standard Offer, Agreement and Escrow Instructions for
Purchase of Real Estate and Addendum to Standard Offer, Agreement and
Escrow Instructions for Purchase of Real Estate with DP Vernon, in
substantially the same form as the copy which is attached hereto as
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
Exhibit A and incorporated by reference.
SECTION 3: The City Council of the City of Vernon hereby
authorizes the Mayor to execute the Agreement and Addendum for, and on
behalf of, the City of Vernon and the Acting City Clerk is hereby
authorized to attest thereto.
SECTION 4: The City Council of the City of Vernon hereby
authorizes the Acting City Administrator, or his designee, to make
whatever nonsubstantive, administrative and/or text changes, upon
advice of counsel, to the Agreement and Addendum.
SECTION 5: The City Council of the City of Vernon hereby
authorizes the Acting City Administrator, or his designee, to execute
any and all documents as shall be required to complete the sale of the
Property and to accomplish the close of escrow consistent with the
terms of said Agreement and Addendum approved herein.
SECTION 6: The Acting City Clerk of the City of Vernon
shall certify to the passage of this resolution, and thereupon and
thereafter the same shall be in full force and effect.
APPROVED AND ADOPTED this 20th day of February, 2007
TEST:
MANUELA GIRON, Acting City Clerk
- 2 -
ILARIO GONZAL S, Mayor Pro-Tem
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
STATE OF CALIFORNIA )
) ss
COUNTY OF LOS ANGELES )
I, MANUELA GIRON, Acting City Clerk of the City of Vernon, do
hereby certify that the foregoing Resolution, being Resolution No.
9244, was duly adopted by the City Council of the City of Vernon at a
regular meeting of the City Council duly held on Tuesday, February 20,
2007, and thereafter was duly signed by the Mayor Pro-Tem of the City
of Vernon.
MANUELA GIRO
Acting City Clerk
(SEAL)
- 3 -
STANDARD OFFER, AGREEMENT AND ESCROW
INSTRUCTIONS FOR PURCHASE OF REAL ESTATE
(Non -Residential)
February _, 2007
(Date for Reference Purposes)
1. Buyer
1.1 DP Vernon, 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 on or before
a date that is not more than 30 calendar days after the last day of the "Due Diligence Period", as defined in
Paragraph 7.1 ("Closing Date"). The Closing. shall be held by North American Title Company, 101 N. Brand
Boulevard, Suite 1800, Glendale, California 91203 (Attn: Ms. Tina De Bow) ("Escrow Holder"), Phone No.
(818) 551-5370, Facsimile No. (818) 240-9884, 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 unimproved property
located at 5001 S. Soto Street, City of Vernon, State of California, 90058, consisting of approximately 5.24
acres, APN 6308-002-008.
2.2 The legal description of the Property shall be completed to meet the requirements of North American
Title Company (Attn: Mr. Victor Greene) ("Title Company"), which shall issue the title policy hereinafter
described.
3. Purchase Price
3.1 The purchase price ("Purchase Price") to be paid by Buyer to Seller for the Property shall be
$7,526,508.00, based on a purchase price of $33.00 per square foot of gross land area. The gross land area is
228,076 square feet (approximately 5.24 acres) as determined by the ALTA survey previously obtained by
Seller in connection with Seller's purchase of the Property in October 2004. Seller shall deliver a copy of the
ALTA survey to Buyer within 10 business days following the opening of Escrow. 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 Two Hundred Fifty Thousand Dollars ($250,000), along with an
executed copy of this Agreement.
4.2 Buyer shall wire transfer to Escrow Holder an additional Two Hundred Fifty Thousand Dollars
($250,000) 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.
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.
5. No Real Estate Brokers
Buyer and Seller each represent and warrant to the other that 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 broker or other person, firm or entity, is 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.
s. 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 any reporting requirements of the Internal Revenue Code.
6.3 Subject to satisfaction or waiver of the Buyer's Contingencies, Escrow Holder shall close this
Escrow (the "Closing") by recording a grant deed in the form of that attached hereto as Exhibit "A" (the
"Grant Deed") and any other documents required to be recorded hereunder, 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 ALTA coverage, if obtained by Buyer.
6.5 Escrow Holder shall verify that all of Buyer's Contingencies have been satisfied or waived 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.
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 5 business 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 as a condition
to the return of Buyer's deposit, Buyer shall within 5 business days after the termination of the Escrow, 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.
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 DISAPPROVAL OF ANY OF BUYER'S CONTINGENCIES WITHIN THE TIME
SPECIFIED HEREIN, IT SHALL BE CONCLUSIVELY PRESUMED THAT BUYER HAS APPROVED
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 shall end at 5:00 P.M.,
California time, on the day of the seventh month anniversary of the Date of Agreement (which seven month
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 ten (10) 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 acquired the Property in October 2004 and has
never operated a business on the Property. Seller shall cause the Escrow Holder to deliver to Buyer a report
paid for by Seller and prepared by a professional provider containing the Natural Hazard Disclosures
concerning the Property, and shall endeavor to have such report delivered to Buyer within ten (10) business
days of the Date of Agreement. All reports, permits, plans, drawings, design, and other documents related to
the physical condition of the Property (other than reports related to environmental conditions) in the possession
of the Seller are located at the Department of Community Services at Vernon City Hall and all reports, analyses,
studies, and other documents related to the environmental condition of the Property in the possession of the
Seller are located at the Health Department at Vernon City Hall. All of such documents may be inspected and
reviewed by Buyer and Buyer's agents during the City of Vernon's standard hours for counter service, and a
reasonable number of documents selected by Buyer will be copied by the City of Vernon for Buyer's files.
Notwithstanding the generality of the foregoing, Buyer shall not be provided with access to copies of any
appraisals, internal analyses, valuations, or memorandum, documents related to the Seller's purchase of the
Property, or any attorney -client documents related to the Property, if any.
(b) Physical Inspection. Buyer has seven months 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 seven months 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 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, including, without limitation, any petroleum or natural gas substance and
any substance or waste defined as hazardous or toxic by any governmental body or agency. 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 or removal under applicable
Federal, state or local law.
(d) Soil Inspection. Buyer has seven months 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 seven months 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 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 referred to in
the Title Report ("Underlying Documents") to be delivered to Buyer within five (5) business days following
the Date of Agreement. Buyer has seven months 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.
(9) Survey. Seller shall deliver to Buyer, without warranty, the ALTA survey that Seller obtained
when it purchased the Property in October 2004. Buyer shall have seven months from the Date of Agreement to
approve the survey provided by Seller or obtain and approve its own ALTA survey. Buyer may elect within
the period allowed for Buyer's approval of a survey to have an ALTA extended coverage owner's form of title
policy, in which event Buyer shall pay any additional premium attributable thereto.
(h) 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.
0) 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.
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"); provided, however, that, during the Due Diligence Period, Buyer shall have
the right to disapprove any matter in writing, and if a cure is not requested, Buyer may terminate this
Agreement within the Due Diligence Period and receive a full refund of the Deposit (less only Title Company
and Escrow Holder cancellation fees and costs, all of which shall be Buyer's obligation). If Buyer does request
that Seller cure a Disapproved Item, 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, if the time periods for the
satisfaction of contingencies or for Seller's and Buyer's said Elections would expire on a date after the Closing
Date, the Closing Date shall be deemed extended for 5 business days following the expiration of: (a) the
applicable contingency period(s), (b) the period within which the Seller may elect to cure the Disapproved Item,
or (c) if Seller elects not to cure, the period within which Buyer may elect to proceed with this transaction,
whichever is later.
7.4 The Parties acknowledge that extensive local, state and Federal legislation establish broad liability
upon owners 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.
s. 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 in the form of that attached hereto as Exhibit "A", 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 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 ALTA
extended, if elected) 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. In the event there is a Purchase Money Deed of Trust in this transaction,, the
policy of title insurance shall be a joint protection policy insuring both Buyer and Seller.
s. Prorations and Adjustments.
9.1 Taxes. There shall be no proration of taxes. Buyer acknowledges that after the Los Angeles County
Assessor's Office receives notice of the transfer of the Property, the Assessor's Office will establish a new
value for the Property as of the date of recordation of the Grant Deed. A tax bill will then be generated and sent
to Buyer. Seller is not responsible to credit Buyer with any taxes from July 1 to the Closing Date as Seller has
no tax liability as a result of Seller's tax exempt status.
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.
1o. Representations and Warranties of Seller and Disclaimers.
1o.1 Buyer acknowledges that 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 faults or
defects on the Property or any Hazardous Substance that may be in, on, under, or around the Property. 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; 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:
Authority of Seller. Seller is the owner of the Property and 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, which
authority will be evidenced by the City of Vernon City Council's approval of this Agreement prior to its
execution by the Seller.
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, 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 other similar 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, or validity of said documents, all of which Buyer relies on at its own risk.
1o.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. 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
FAVOR AT THE TIME OF EXECUTING THE RELEASE WHICH IF KNOWN BY HIM MUST HAVE
MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.
Buyer's Initials Seller's Initials
11. Entry onto Property.
Buyer's right to enter onto the Property prior to the Closing for inspections and testing for purposes of all
due diligence matters is subject to the terms of Paragraph 21.
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 if made 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.
16. Duration of Offer.
16.1 If a signed copy of this offer (with Paragraphs 10.5 and 17 and 25 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
February 19, 2007 it shall be deemed automatically revoked, and if Seller has not signed this offer by 5:00 P.M.
by March 31, 2007 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)
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 OF ALL
CONTINGENCIES PROVIDED FOR THE BUYER'S BENEFIT, BUYER BREACHES THIS
AGREEMENT, SELLER SHALL BE ENTITLED TO LIQUIDATED DAMAGES IN THE AMOUNT OF
$200,000.00. 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 Seller's Initials
18. Miscellaneous.
18.1 Binding Effect. This Agreement shall be binding on the Parties only if signed by both Parties and if
Paragraphs 10.5, 17, and 25 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.
18.7 No Further Offers. Seller shall not solicit or tender offers from other prospective buyers or tenants
for the Property unless this Agreement is terminated prior to the Closing by either Party.
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.
2o. Additional Provisions:
See Addendum with Paragraphs 21 through 26.
The undersigned Buyer offers and agrees to buy the Property on the terms and conditions stated and
acknowledges receipt of a copy hereof.
BUYER:
DP Vernon, LLC, a California limited liability company
By: Downtown Properties Holdings, LLC, its sole
Manager
By:
Its Sole Manager
Date:
Address:
Los Angeles, CA
Telephone:
Facsimile:
Email:
Federal ID No.
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:
Hilario Gonzales, Mayor Pro Tem
Dated:
Attest:
Name: Manuela Giron
Title: Acting City Clerk
Approved As to Form:
By:
Name: Jeffrey A. Harrison
Title: Acting City Attorney
Address: 4305 Santa Fe Avenue
Vernon, CA 90058
Telephone: 323-583-8811
Fax: 323-826-1438
Federal ID No.: 95-6000808
Addendum to Standard Offer, Agreement
And Escrow Instructions for Purchase of Real Estate
Buyer: DP Vernon, LLC
Seller: City of Vernon
Premises: 5001 S. Soto Street, Vernon, California
Dated: February , 2007
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 which Seller will provide access and
will provide reasonable copying in accordance with Paragraph 7.1 of the Pre -Printed Agreement,
all other inspections and reports shall be at Buyer's expense. Upon mutual execution of the
Purchase. Agreement and Buyer's delivery of certificates of insurance evidencing coverage as set
forth below and as further described in Exhibit `B" attached hereto and incorporated herein,
Buyer and its agents shall have access to the Property to allow for necessary inspections and
testing; provided, however, that Buyer shall provide not less than 72 hours prior notice of its
intent to enter onto the Property or to perform any inspections or tests, which notice shall be
given to Lew Pozzebon by telephone at 323-583-8811 or by email at 1pozzebonna,ci.vernon.ca.us
if the inspections or testing relate to environmental matters and shall be given to Kevin Wilson
by telephone at 323-583-8811 or by email at kwilson@ci.vemon.ca.us if the inspections or
testing relate to Property conditions other than environmental matters. All notices shall be given
and all testing and inspections shall be performed on Monday through Thursday (excluding
holidays). Further, Buyer may not conduct any intrusive tests or borings except in accordance
with the terms set forth below. All testing and inspections shall be done at Buyer's sole cost and
expense, with good and proper techniques, using personnel qualified and licensed to perform the
testing and inspections, and in compliance with all applicable federal, state and local laws,
ordinances, rules and regulations. Buyer, at its sole cost and expense, shall obtain any necessary
governmental permits prior to conducting any tests or inspections.
Buyer, for itself, its employees, contractors, and agents (the "Buyer Parties"), and others entering
onto the Property at the request of Buyer, hereby releases the Seller, its elected officials, staff,
employees, representatives and agents from all claims, actions, losses, damages, injuries, costs
and expenses (including, without limitation, reasonable attorneys' fees and costs), including all
claims of illness, injury, death, or property damage, arising out of or resulting from any Buyer
Parties entering onto the Property or performing any work thereon.
Buyer hereby agrees to indemnify, defend and hold Seller, its elected officials, staff, employees,
representatives and agents harmless from and against any and all loss, claims, damage, liability,
obligations, demands, and expenses of any kind or nature whatsoever arising out of or resulting
from the entry upon the Property by any Buyer Party, any work undertaken by any Buyer Party
in connection with the Property, any damage or liability incurred by reason of any acts or
omissions of any Buyer Party, including any damages resulting from the release of any
Hazardous Materials by any Buyer Party onto the Property or any adjacent or nearby property or
into the environment. This indemnification shall include, without limitation, any damage to the
Property or the personal property of any tenant or person residing or occupying the Property, or
injury or death to persons. Notwithstanding anything to the contrary in this Paragraph 21, the
indemnity described herein shall not apply to any claims arising out of the discovery of pre-
existing contamination during Buyer's entry or testing, except to the extent that Buyer's
activities, testing, or entry onto the Property exacerbate the condition of any pre-existing
contamination, in which event this indemnity shall apply only to the exacerbated conditions.
This paragraph shall survive the termination of this Purchase Agreement.
Prior to entering upon the Property, Buyer shall (i) procure, pay for and keep in full force and
effect until the termination of this is Purchase Agreement, an occurrence form commercial general
liability policy with respect to the Property and the activities of Buyer, its agents, employees,
contractors and consultants, protecting Buyer and Seller, its elected officials, staff, employees,
01910/0006 147255.6
agents, and consultants, as additional insureds, against claims for bodily injury, personal injury
and property damage based upon or arising out of the ownership, use, occupancy and activities
on the Property and all areas appurtenant thereto, with single limit coverage in an amount not
less than $1,000,000 per occurrence with an annual aggregate of not less than $2,000,000, an
"Additional Insured -Managers or Lessors of Premises Endorsement and contain the
"Amendment of the Pollution Exclusion Endorsement" for damage caused by heat, smoke or
fumes from a hostile fire, (ii) procure, pay for and keep in full force and effect until the
termination of this Purchase Agreement, or require Buyer's environmental consultants to procure,
pay for and keep in full force and effect for such period, an occurrence form pollution liability
insurance policy with respect to the Property and the activities of Buyer, its consultants, agents,
employees, contractors and subcontractors, relating to the Property in which the limits shall not
be less than Five Million Dollars ($5,000,000) per occurrence, and (iii) procure, pay for and keep
in full force and effect until the termination of this Purchase Agreement, such other coverage as
is described in Exhibit `B" hereto. All of such policies (except for the Workers' Compensation
policy) shall name Seller, its elected officials, staff, employees, agents, and consultants, as an
additional insured party, and shall comply with the other requirements set forth in Exhibit `B"
hereto, and Buyer shall provide Seller with certificates of insurance evidencing such insurance.
The certificates of insurance (including the Declaration Page and Schedule of Forms and
Endorsements) shall be delivered to Willard Yamaguchi, Esq., Chief Deputy City Attorney, at
4305 Santa Fe Avenue, Vernon, California 90058. The liability policy shall not contain any
intra-insured exclusions as between insured persons or organizations, but shall include coverage
for liability assumed by Buyer under this Purchase Agreement as an "insured contract" for the
performance of Buyer's indemnity obligations under this Purchase Agreement and shall include
contractual liability coverage, oral and written, operations premises liability, personal injury,
independent contractors, broad form property damage, and cross -liability coverage. The limits
of said insurance shall not, however, limit the liability of Buyer nor relieve Buyer of any
obligation hereunder. All insurance carried by Buyer shall be primary to and not contributory
with any similar insurance carried by the Seller, whose insurance shall be considered excess
insurance only.
Seller, its.agent(s) and 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 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.
Any environmental documents, reports or information obtained by Buyer or its consultants with
respect to the Property shall be received, held and used confidentially.
Buyer shall deliver to Seller copies of all analyses, tests, studies, data, documents, reports and
information obtained by Buyer or its consultants with respect to the Property within five (5)
calendar days after receipt of same.
Notwithstanding any provisions of this Purchase Agreement to the contrary, Buyer may not
conduct any invasive 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 approve the Work Plan or to
object or suggest modifications to the Work Plan in writing. In the event,Seller
objects 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 within the Due Diligence Period, Buyer may elect to terminate the
Purchase Agreement. 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.
01910/0006 147255.6
(b) Promptly after completion of the inspections and testing, Buyer, at its sole cost
and expense, shall restore the Property to the condition that existed prior to
commencing the work. Any holes, boring, trenches, or other invasive work
performed at the Property by Buyer or its contractors will be properly filled in and
compacted, and any unsafe conditions at the Property caused by or under the
control of Buyer shall be repaired and remediated. In that regard, Buyer shall
ameliorate and remove from the Property with all reasonable due care, in a safe
manner and to a safe degree in accordance with all applicable laws as the same
may be changed from time to time, at its sole cost and expense, any contamination
by Hazardous Materials (as defined below) in, on, about and beneath the Property,
which contamination was caused by Buyer or resulted from its investigation or of
the Property (the "Ameliorative Work"). All Ameliorative Work must be first
approved in writing by the Seller. If Buyer fails to restore the Property, Seller
shall request in writing that Buyer commence the restoration within five (5)
business days of Buyer's receipt of the written request and if Buyer fails to
commence the restoration within said time period, Seller, in addition to any other
rights and remedies available at law, may restore the Property to the condition that
existed prior to commencing the work and Buyer shall pay all reasonable
expenses incurred by Seller in connection with the restoration.
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 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.
24. Covenant re Continuing Use: Buyer acknowledges that Seller, as a City, has
implemented certain development plans and has established certain criteria for use of property
within the City. Buyer acknowledges and agrees that, for the Covenant Period, as defined in the
Grant Deed, all improvements on the Property shall be constructed, maintained, operated, and
used solely and exclusively for purposes of operating a "server farm" or "data center", as such
term is commonly used in the telecommunications industry (collectively, a "Data Center"). To
ensure compliance with Seller's development plans and Buyer's covenant as set forth in the
above sentence, (a) Buyer shall deliver to the Planning Department of the City of Vernon, not
later than 45 days prior to the last day of the Due Diligence Period, Buyer's "Full'Property Site
Plan" (the "Site Plan") showing development plans for the Property that will include
development of a minimum of 100,000 usable square feet of building space [the usable square
footage shall be determined in accordance with the standards set forth in ANSI Z65.1-1996, as
promulgated by the Building Owners and Managers Association (the `SOMA Standard")] for
01910/0006 147255.6
sole and exclusive use as a Data Center, for approval by the City of Vernon; (b) the minimum of
100,000 square feet described in clause (a) shall be comprised of buildings that are each not less
than 50,000 usable square feet, as measured by the BOMA Standard; and (c) Buyer approves the
form and substance of the Grant Deed attached hereto as Exhibit "A", which shall be recorded on
the Closing. Seller shall cooperate with Buyer to assist Buyer in obtaining any required permits
or other approvals required to allow Buyer to improve and lease the Property in accordance with
the terms of this Paragraph 24; provided, however, that Buyer's building design shall comply
with all federal, state, and local laws and with all applicable building codes and shall include a
minimum of 100,000 usable square feet (in accordance with the BOMA Standard) of building
space (with first 100,000 square feet being comprised of buildings that are each not less than
50,000 square feet) constructed for use as a Data Center. The Site Plan shall specifically identify
the location of each building to be constructed, the usable square footage (in accordance with the
BOMA Standard), the order in which the buildings will be constructed, and the anticipated start
date and completion date for construction for each building. There shall be no improvements
constructed on the Property for any purpose other than use as a Data Center. Seller shall enter
into a Subordination, Non -Disturbance, and Attornment Agreement on commercially reasonable
terms with Buyer's tenants to assure such tenants that if Seller purchases the Property from the
Buyer as a result of Buyer's (or Buyer's tenants' or subtenants' or users') failure to comply with
the terns of this Paragraph 24 or the Grant Deed as to portions of the Property not leased,
subleased, or used by the tenant requesting non -disturbance, Seller, for a period of seven (7)
years following the date of the Seller's repurchase, shall not interfere with such tenant's (or
subtenant's or user's) operations so long as such tenant's (or subtenant's or user's) operations are
solely and exclusively for operation of a Data Center and are otherwise in compliance with the
terms of the lease or other agreement governing the tenant's (or subtenant's or user's) use of its
portion of the Property. Within fifteen (15) business days following the last day of the Due
Diligence Period, Buyer shall submit the documentation required to obtain a Conditional Use
Permit from the City of Vernon Community Services Department for construction of a Data
Center, and the Parties will cooperate with each other in order to process such documentation for
the issuance of the Conditional Use Permit. The terms and conditions of this Paragraph 24 shall
survive the Closing and shall not be merged into the Grant Deed; provided, however, that the
terms of this Paragraph 24 shall terminate upon the earlier of the last day of the Covenant Period,
as defined in the Grant Deed, or thirty (30) years following the date of the recordation of the
Grant Deed.
25. ARBITRATION OF DISPUTES:
25.1 USE OF JAMS. THE PARTIES AGREE THAT ANY DISPUTE OR CONTROVERSY
ARISING OUT OF OR RELATING TO ANY INTERPRETATION, CONSTRUCTION,
PERFORMANCE, TERMINATION OR BREACH OF THIS PURCHASE AGREEMENT OR
THE PURCHASE OF THE PROPERTY BY BUYER WILL BE SETTLED BY FINAL AND
BINDING ARBITRATION BY A SINGLE ARBITRATOR TO BE HELD IN LOS ANGELES
COUNTY, CALIFORNIA, IN ACCORDANCE WITH THE RULES OF THE JUDICIAL
ARBITRATION & MEDIATION SERVICES, INC. ("JAMS"). WITHOUT LIMITING ANY
OTHER PROVISION HEREIN, THIS PARAGRAPH 25 SHALL SURVIVE THE
TERMINATION OF THIS PURCHASE AGREEMENT AND WILL APPLY TO ANY
CLAIM, DISPUTE, OR CONTROVERSY THAT ARISES DURING OR AFTER THE
TERMINATION OF THIS PURCHASE AGREEMENT.
25.2 PROCEDURE. THE ARBITRATION SHALL TAKE PLACE BEFORE A SINGLE
RETIRED JUDGE OF THE SUPERIOR COURT OF THE STATE OF CALIFORNIA (THE
"ARBITRATOR") UNDER THE AUSPICES OF JAMS. SUCH ARBITRATION SHALL BE
INITIATED BY THE PARTIES, OR EITHER OF THEM, WITHIN TEN (10) CALENDAR
DAYS AFTER EITHER PARTY SENDS NOTICE OF A DEMAND TO ARBITRATE (THE
"ARBITRATION NOTICE") TO THE OTHER PARTY AND TO JAMS. THE
ARBITRATION NOTICE SHALL CONTAIN A DESCRIPTION OF THE SUBJECT
MATTER OF THE ARBITRATION, THE DISPUTE WITH RESPECT THERETO, THE
AMOUNT INVOLVED, IF ANY, AND THE REMEDY OR DETERMINATION SOUGHT.
25.3 SELECTION OF ARBITRATOR. WITHIN 15 CALENDAR DAYS AFTER THE
DATE OF THE NOTICE OF THE ARBITRATION NOTICE, EACH PARTY SHALL
DELIVER TO THE OTHER THE NAMES OF THREE RETIRED JUDGES FROM THE
JAMS PANEL, AND WITHIN 15 CALENDAR DAYS FOLLOWING RECEIPT OF THE
01910/0006 147255.6
NAMES, THE PARTIES SHALL MUTUALLY AGREE ON WHICH RETIRED JUDGE
SHALL SERVE; PROVIDED THAT IF THE PARTIES CANNOT AGREE WITHIN SUCH 15
DAY PERIOD, JAMS WILL SELECT THE ARBITRATOR. IN THE EVENT OF ANY
SUBSEQUENT VACANCY OR INABILITY TO PERFORM, THE ARBITRATOR SHALL
BE REPLACED IN ACCORDANCE WITH THE PROVISIONS OF THIS PARAGRAPH 25.3
AS IF SUCH REPLACEMENT WAS AN INITIAL APPOINTMENT TO BE MADE UNDER
THIS PARAGRAPH 25.3 WITHIN THE TIME CONSTRAINTS SET FORTH IN THIS
PARAGRAPH 25.3, MEASURED FROM THE DATE OF NOTICE OF SUCH VACANCY OR
INABILITY TO THE PERSON OR PERSONS REQUIRED TO MAKE SUCH
APPOINTMENT.
25.4 THE DECISION. ANY PARTY MAY BE REPRESENTED BY COUNSEL OR
OTHER AUTHORIZED REPRESENTATIVE. IN RENDERING A DECISION(S), THE
ARBITRATOR SHALL DETERMINE THE RIGHTS AND OBLIGATIONS OF THE
PARTIES ACCORDING TO THE SUBSTANTIVE AND PROCEDURAL LAWS OF THE
STATE OF CALIFORNIA AND THE TERMS OF THIS PURCHASE AGREEMENT. THE
DECISION OF THE ARBITRATOR SHALL BE BASED ON THE EVIDENCE
INTRODUCED AT THE HEARING, AND SHALL BE BASED ON, AND ACCOMPANIED
BY, A WRITTEN STATEMENT OF DECISION EXPLAINING THE FACTUAL AND
LEGAL BASIS FOR THE DECISION AS TO EACH OF THE PRINCIPAL
CONTROVERTED ISSUES. THE DECISION OF THE ARBITRATOR AS TO THE
RESOLUTION OF THE DISPUTE SHALL BE A CONCLUSIVE RESOLUTION. THE
ARBITRATOR SHALL DELIVER THE WRITTEN DECISION TO THE PARTIES WITHIN
30 CALENDAR DAYS FOLLOWING THE DATE OF THE SELECTION OF THE
ARBITRATOR. THE DECISION SHALL BE CONCLUSIVE AND BINDING, AND IT MAY
THEREAFTER BE CONFIRMED AS A JUDGMENT BY THE SUPERIOR COURT OF THE
STATE OF CALIFORNIA, SUBJECT ONLY TO CHALLENGE ON THE GROUNDS SET
FORTH IN THE CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 1286.2. THE
VALIDITY AND ENFORCEABILITY OF THE DECISION OF THE ARBITRATOR IS TO
BE DETERMINED EXCLUSIVELY BY THE CALIFORNIA COURTS. THE ARBITRATOR
SHALL HAVE THE AUTHORITY TO GRANT EITHER PARTY ALL REMEDIES
OTHERWISE AVAILABLE BY LAW, INCLUDING INJUNCTIONS.
25.5 PAYMENT OF ARBITRATOR. THE NON -PREVAILING PARTY SHALL PAY THE
COSTS OF THE ARBITRATOR AND THE ARBITRATION PROCESS.
25.6 NOTICE OF WAIVER. NOTICE: BY INITIALLING IN THE SPACE BELOW YOU
ARE AGREEING TO HAVE ANY DISPUTE ARISING OUT OF THE MATTERS
INCLUDED IN THE `ARBITRATION OF DISPUTES' PROVISION DECIDED BY
NEUTRAL ARBITRATION AS PROVIDED BY CALIFORNIA LAW AND YOU ARE
GIVING UP ANY RIGHTS YOU MIGHT POSSESS TO HAVE THE DISPUTE LITIGATED
IN A COURT OR JURY TRIAL. BY INITIALLING IN THE SPACE BELOW YOU ARE
GIVING UP YOUR JUDICIAL RIGHTS TO DISCOVERY AND APPEAL, UNLESS THOSE
RIGHTS ARE SPECIFICALLY INCLUDED IN THE `ARBITRATION OF DISPUTES'
PROVISION. IF YOU REFUSE TO SUBMIT TO ARBITRATION AFTER AGREEING TO
THIS PROVISION, YOU MAY BE COMPELLED TO ARBITRATE UNDER THE
AUTHORITY OF THE CALIFORNIA CODE OF CIVIL PROCEDURES. YOUR
AGREEMENT TO THIS ARBITRATION PROVISION IS VOLUNTARY.
WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT
DISPUTES ARISING OUT OF THE MATTERS INCLUDED IN THE `ARBITRATION OF
DISPUTES' PROVISION BY NEUTRAL ARBITRATION.
BUYER'S INITIALS SELLER'S INITIALS
01910/0000 147255.6
26. Electric Rate: Depending on its usage, the Buyer could qualify for and be accepted at
the Vernon Light and Power TOU-I or TOU-V rate, so long as Buyer purchases power at 66kV
and 20 MVA or more. Under the current TOU-I rate schedule, with a 20 MVA load, 98% load
factor, and the entire 20-MVA load subject to interruption, the effective cost per kWh would be
$0.057. Seller will work with Buyer to determine the appropriate electrical rate schedule for the
Property. A copy of the current TOU-1 schedule and the TOU-V schedule are attached hereto as
Exhibit "C". The TOU-I and TOU-V schedules are subject to revision at any time and from time
to time by the Vernon Department of Light and Power.
Executed as of the date first above written.
SELLER:
City of Vernon
By:
Hilario Gonzales, Mayor Pro-Tem
Attest:
By:
Manuela Giron, Acting City Clerk
Approved As to Form:
By:
Jeffrey A. Harrison, Acting City Attorney
BUYER:
DP Vernon, LLC, a California limited liability company
By: Downtown Properties Holdings, LLC, its sole Manager
By:
Name:
Its Sole Manager
01910/0006 147255.6 6
EXHIBIT A
To Addendum to Standard Offer, Agreement
And Escrow Instructions for Purchase of Real Estate
DP Vernon, LLC (Buyer) and City of Vernon (Seller)
5001 S. Soto Street, Vernon, California
GRANT DEED
RECORDING REQUESTED BY
North American Title Company
WHEN RECORDED MAIL THIS DOCUMENT
AND TAX STATEMENTS TO:
DP Vernon, LLC
THE SPACE ABOVE IS FOR RECORDER'S USE
GRANT DEED
APN: 6308-002-008
Escrow No.
Title No.
DOCUMENTARY TRANSFER TAX IS S NOT OF PUBLIC RECORD.
❑x computed on full value of property conveyed, or
❑ computed on full value less value of liens and
encumbrances remaining at time of sale.
❑ Unincorporated area: ❑x City of Vernon
FOR VALUABLE CONSIDERATION, RECEIPT OF WHICH IS HEREBY ACKNOWLEDGED,
The City of Vernon, a body corporate and politic (the "Grantor")
HEREBY GRANT(S), SUBJECT TO THE CONDITIONS SUBSEQUENT DESCRIBED HEREIN, TO:
DP Vernon, LLC, a California limited liability company (the "Grantee')
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
5001 S. Soto Street, City of Vernon, State of California, 90058.
The foregoing grant of Property is subject to non -delinquent taxes, all easements, covenants,
conditions and restrictions of record, and all other matters of record affecting title to such
Property.
Grantee acknowledges that Grantor, as a municipality, has implemented certain development
plans and has established certain criteria for use of property within the City. Accordingly, the
foregoing grant of Property is subject to the conditions subsequent described herein. Grantee's
and Grantee's successors' rights to the estate granted herein may be terminated by Grantor or
Grantor's successors in the event of a breach of the following conditions subsequent.
During the Covenant Period, as defined below, all improvements on the Property shall be
constructed, maintained, operated, and used solely and exclusively for purposes of operating a
"server farm" or "data center", as such term is commonly used in the telecommunications
industry (collectively, a "Data Center"). To ensure compliance with the above sentence, Grantee
01910/0006 147255.6 7
shall construct and improve a minimum of 100,000 usable square feet of building space [the
usable square footage shall be determined in accordance with the standards set forth in ANSI
Z65.1-1996, as promulgated by the Building Owners and Managers Association (the `SOMA
Standard")] solely for the development and continuing exclusive use of a Data Center, and
otherwise in accordance with the time frame set forth herein and the location description set forth
in the site plan that is approved by the City of Vernon (the "Site Plan'. The minimum of
100,000. square feet shall be comprised of buildings that are each not less than 50,000 square
feet, as measured by the BOMA Standard. The exterior and interior of the structures and
buildings on the Property shall be designed and improved for the specific purpose of use as a
Data Center, and the buildings (including the usable square footage of each building), driveways,
and landscaped areas will be constructed and located on the Property in accordance with the Site
Plan, which shall show the order in which the buildings will be constructed, and the anticipated
start date and completion date for construction for each building. Grantee acknowledges that the
Property is being sold for the specific purpose set forth herein and that there shall be no
improvements constructed on the Property for any purpose other than for use as a Data Center
during the Covenant Period.
Grantor's grant of the Property is conditioned on strict compliance with the following conditions:
(1) Grantee's (and Grantee's successors and assigns) continuing compliance with the
covenant that the Property not be used for any purpose other than a Data Center for the period of
five (5) years following Grantee's completion of construction of the last building required to
achieve full development of a minimum of 100,000 square feet as a Data Center (comprised of
buildings not less than 50,000 square feet), as described above, as evidenced by a Certificate of
Completion of Construction signed by Grantee's architect and reasonably approved by the City
of Vernon (the "Covenant Period");
(2) The first building to be constructed on the Property will be fully developed as a Data
Center within nine (9) months following the date of recordation of this Grant Deed, and the last
building required to achieve the minimum 100,000 square feet described above will be
developed as a Data Center within twelve (12) months following the date of recordation of this
Grant Deed, and in accordance with the location description set forth in the Site Plan, subject to a
.day for day delay if there is an occurrence of an event beyond the reasonable control of Grantee
("Force Majeure Event") (provided, however, that lack of funds or failure to apply for permits on
a timely basis or to comply with City of Vernon requirements in connection with obtaining
permits, or failure to deliver plans that are in compliance with this Grant Deed shall not
constitute a Force Majeure Event, and provided, further, that work shall commence again as soon
as possible following the Force Majeure Event);
(3) The Property will automatically revert to the Grantor if the Property is not developed
within the time frame and used on the terms set forth herein; provided, however, that the
reversion will not be effected if Grantee cures the default within four (4) months following
delivery of notice of default from the Grantor; and
(4) The covenants and conditions and right of reversion described herein run with the
land and are binding on all tenants, users, owners, and successors within the Covenant Period.
If the Property reverts to the Grantor, the Grantor will purchase the entirety of the Property from
the Grantee, and Grantee shall sell the entirety of the Property to the Grantor, including all
buildings, for the fair market value of the land and buildings, as determined in accordance with
the appraisal procedure set forth in Exhibit `B" hereto. The closing of the repurchase shall take
place not later than thirty (30) days following the determination of the Fair Market Value of the
Property.
The obligations of Grantee and right of reversion to Grantor as described herein shall terminate
on the earlier of the last day of the Covenant Period or thirty (30) years following the date of the
recordation of this Grant Deed.
[Signatures on following page]
01910/0006 147255.6
Date:
"Grantor"
THE CITY OF VERNON,
a public body corporate and politic
By: Hilario Gonzales
Title: Mayor Pro Tern
200
"Grantee"
By its execution of this document, Grantee agrees to the foregoing covenants.
DP Vernon, LLC, a California limited liability company
By: Downtown Properties Holdings, LLC, its sole Manager
By:
Name:
Its Sole Manager
01910/0006 147255.6
9
STATE OF CALIFORNIA)
)SS.
COUNTY OF LOS ANGELES)
ON 1200 , BEFORE ME, THE UNDERSIGNED, A NOTARY PUBLIC
IN AND FOR SAID STATE, PERSONALLY APPEARED
PERSONALLY KNOWN TO ME OR PROVED TO ME ON THE BASIS OF SATISFACTORY
EVIDENCE TO BE THE PERSON WHOSE NAME IS SUBSCRIBED TO THE WITHIN
INSTRUMENT AND ACKNOWLEDGES TO ME THAT HE EXECUTED THE SAME IN HIS
AUTHORIZED CAPACITY, AND THAT BY HIS SIGNATURE ON THE INSTRUMENT, THE
PERSON, OR THE ENTITY UPON BEHALF OF WHICH THE PERSON ACTED, EXECUTED THE
INSTRUMENT.
WITNESS MY HAND AND OFFICIAL SEAL.
(Notary Signature)
(NOTARY SEAL)
STATE OF CALIFORNIA)
)SS.
COUNTY OF LOS ANGELES)
ON , 200__, BEFORE ME, THE UNDERSIGNED, A NOTARY
PUBLIC IN AND FOR SAID STATE, PERSONALLY APPEARED
, PERSONALLY KNOWN TO ME OR PROVED TO ME
ON THE BASIS OF SATISFACTORY EVIDENCE TO BE THE PERSON WHOSE NAME IS
SUBSCRIBED TO THE WITHIN INSTRUMENT AND ACKNOWLEDGES TO ME THAT HE
EXECUTED THE SAME IN HIS AUTHORIZED CAPACITY, AND THAT BY HIS SIGNATURE ON
THE INSTRUMENT, THE PERSON, OR THE ENTITY UPON BEHALF OF WHICH THE PERSON
ACTED, EXECUTED THE INSTRUMENT.
WITNESS MY HAND AND OFFICIAL SEAL
(Notary Signature)
(NOTARY SEAL)
01910/0006147255.6 10
EXHIBIT A TO
GRANT DEED
LEGAL DESCRIPTION
01910/0006147255.6 11
EXHIBIT B TO
GRANT DEED
APPRAISAL PROCEDURE
For purposes of the right of reversion, "Fair Market Value" shall mean the fair market
value, in cash, obtainable for the Property in an arm's length transaction, taking into account the
location of the Property in the City of Vernon and determining its value as improved industrial
land, taking into account the fair market value of the buildings as general use industrial
buildings. Fair Market Value shall not include any special improvements made to the Property
in connection with its potential use as a Data Center. The parties shall attempt to reach
agreement on Fair Market Value within thirty (30) days after receipt by Grantee of the Grantor's
notice of exercise of the right of reversion. Failing such agreement, Fair Market Value shall be
determined by appraisal conducted in the following manner:
The party desiring the appraisal shall deliver to the other party notice of appointment of a person
who is a duly qualified professional real estate appraiser, who has been a member of the highest
standing, qualification and rank or certification for a period of at least ten (10) years in the
Appraisal Institute or similar professional appraisal organization and who has had at least ten
(10) years personal experience in the appraisal of unimproved industrial land located in Los
Angeles County. Within ten (10) days after receipt of such notice, the other party shall deliver to
the first party notice of appointment of a person having similar qualifications to act as appraiser
on its behalf. If the other party fails to notify the first party of the appointment of the second
appraiser within said period of time, the first appraiser shall serve as the sole appraiser. If the
two appraisers so designated are unable to agree as to the Fair Market Value of the Property
within thirty (30) days after the designation of the second appraiser, and their appraisals are
within ten percent (10%) of each other, the Fair Market Value shall be the mathematical average
of their separate appraisals. If their appraisals differ by more than ten percent (10%), they shall
appoint a third appraiser having similar qualifications. If the two appraisers are unable to agree
on a third appraiser within ten (10) days after the expiration of such thirty (30) day period, the
third appraiser shall be selected by both parties within ten (10) days thereafter. If the parties do
not so agree within such period of time, either party may apply to the Superior Court of Los
Angeles County, California, for the appointment of such third appraiser and the other party shall
not raise any objection as to the court's full power and jurisdiction to entertain the application
and make the appointment. In the event of the failure, refusal or inability of any appraiser to act,
his successor shall be appointed within ten (10) days by the party who originally appointed him
(or in the event of such party's failure so to do, or in the case of the third appraiser, his successor
shall be appointed in the manner hereinbefore provided). Each of the appraisers so appointed
shall conduct an appraisal of the Property and shall report its determination of the Fair.Market
Value within thirty (30) days after the third appraiser is appointed. If the three appraisers are
unable to agree as to such Fair Market Value within such period of forty-five (45) days after the
third appraiser is appointed, the Fair Market Value shall be deemed to be the average of the
values determined by the two appraisers whose appraised values are closest in value to each
other. Each party shall pay the fees and expenses of the appraiser appointed by such party and
the fees and expenses of the third appraiser shall be borne equally by the parties.
01910/0006 147255.6 12
EXHIBIT B
To Addendum to Standard Offer, Agreement
And Escrow Instructions for Purchase of Real Estate
DP Vernon, LLC (Buyer) and City of Vernon (Seller)
5001 S. Soto Street, Vernon, California
INSURANCE SCHEDULE
Buyer and its contractor shall provide proof of insurance, including a standard certificate of
insurance, in at least the following amounts and coverage (combined single limit permitted). All
insurance required herein shall be by companies duly licensed or admitted to transact business in
California and maintaining a "General Policyholders Rating" of at least B+, V, as set forth in t he
most current issue of `Best's Insurance Guide".
a. Coverage and Limits
Bodily Injury Property Damage
Hazards Each Person Each Accident Each Accident
Automobile Liability
Owned Automobiles $500,000 $1,000,000 $500,000
1. Hired Automobiles $500,000 $1,000,000 $500,000
2. Non -Owned
Automobiles $500,000 $1,000,000 $500,000
Workers' Compensation Statutory
Employers' Liability $1,000,000 per employer
b. Liabili
Premises Operations $1,000,000 $2,000,000 $1,000,000
Elevators
(if applicable) $1,000,000 $2,000,000 $1,000,000
Independent
Contractors $1,000,000 $2,000,000 $1,000,000
Products - Completed
Operations $1,000,000 $2,000,000 $1,000,000
Contractual Liability $1,000,000 $2,000,000 $1,000,000
Umbrella Liability $2,000,000 $2,000,000 $2,000,000
The general liability policy shall contain the following special endorsements which shall be
noted on or attached to the standard certificate of insurance:
1. An endorsement naming the City of Vernon, its officers, and employees as
additional insureds under the policy.
2. An endorsement providing the City of Vernon thirty (30) days notice of
cancellation or material reduction of coverage.
3. An endorsement providing coverage for all operations under the City of Vernon
permit and specifying the activities covered.
4. Such other endorsement as may be required by addendum hereto.
5. A copy of your general and umbrella insurance policy declarations page.
6. Copy of schedule of forms of endorsements.
01910/0006147255.6 13
EXHIBIT C
To Addendum to Standard Offer, Agreement
And Escrow Instructions for Purchase of Real Estate
DP Vernon, LLC (Buyer) and City of Vernon (Seller)
5001 S. Soto Street, Vernon, California
ELECTRIC RATE SCHEDULE
01910/0006 147255.6 14 '
STANDARD OFFER, AGREEMENT AND ESCROW
INSTRUCTIONS FOR PURCHASE OF REAL ESTATE
(Non -Residential)
February A 2007
(Date for Reference Purposes)
7. Buyer
1.1 DP Vernon, 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 on or before
a date that is not more than 30 calendar days after the last day of the "Due Diligence Period", as defined in
Paragraph 7.1 ("Closing Date"). The Closing shall be held by North American Title Company, 101 N. Brand
Boulevard, Suite 1800, Glendale, California 91203 (Attn: Ms. Tina De Bow) ("Escrow Holder"), Phone No.
(818) 551-5370, Facsimile No. (818) 240-9884, 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 unimproved property
located at 5001 S. Soto Street, City of Vernon, State of California, 90058, consisting of approximately 5.24
acres, APN 6308-002-008.
2.2 The legal description of the Property shall be completed to meet the requirements of North American
Title Company (Attn: Mr. Victor Greene) ("Title Company"), which shall issue the title policy hereinafter
described.
3. Purchase Price
3.1 The purchase price ("Purchase Price") to be paid by Buyer to Seller for the Property shall be
$7,526,508.00, based on a purchase price of $33.00 per square foot of gross land area. The gross land area is
228,076 square feet (approximately 5.24 acres) as determined by the ALTA survey previously obtained by
Seller in connection with Seller's purchase of the Property in October 2004. Seller shall deliver a copy of the
ALTA survey to Buyer within 10 business days following the opening of Escrow. 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 Two Hundred Fifty Thousand Dollars ($250,000), along with an
executed copy of this Agreement.
4.2 Buyer shall wire transfer to Escrow Holder an additional Two Hundred Fifty Thousand Dollars
($250,000) 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.
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.
Initials PAGE 1 Initials
5. No Real Estate Brokers
Buyer and Seller each represent and warrant to the other that 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 broker or other person, firm or entity, is 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.
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 any reporting requirements of the Internal Revenue Code.
6.3 Subject to satisfaction or waiver of the Buyer's Contingencies, Escrow Holder shall close this
Escrow (the "Closing") by recording a grant deed in the form of that attached hereto as Exhibit "A" (the
"Grant Deed") and any other documents required to be recorded hereunder, 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 ALTA coverage, if obtained by Buyer.
6.5 Escrow Holder shall verify that all of Buyer's Contingencies have been satisfied or waived 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.
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 5 business 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 as a condition
to the return of Buyer's deposit, Buyer shall within 5 business days after the termination of the Escrow, 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.
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 DISAPPROVAL OF ANY OF BUYER'S CONTINGENCIES WITHIN THE TIME
SPECIFIED HEREIN, ;IT SHALL BE CONCLUSIVELY PRESUMED THAT BUYER HAS APPROVED
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
Initials PAGE 2 Initials
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 shall end at 5:00 P.M.,
California time, on the day of the seventh month anniversary of the Date of Agreement (which seven month
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 ten (10) 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 acquired the Property in October 2004 and has
never operated a business on the Property. Seller shall cause the Escrow Holder to deliver to Buyer a report
paid for by Seller and prepared by a professional provider containing the Natural Hazard Disclosures
concerning the Property, and shall endeavor to have such report delivered to Buyer within ten (10) business
days of the Date of Agreement. All reports, permits, plans, drawings; design, and other documents related to
the physical condition of the Property (other than reports related to environmental conditions) in the possession
of the Seller are located at the Department of Community Services at Vernon City Hall and all reports, analyses,
studies, and other documents related to the environmental condition of the Property in the possession of the
Seller are located at the Health Department at Vernon City Hall. All of such documents may be inspected and
reviewed by Buyer and Buyer's agents during the City of Vernon's standard hours for counter service, and a
reasonable number of documents selected by Buyer will be copied by the City of Vernon for Buyer's files.
Notwithstanding the generality of the foregoing, Buyer shall not be provided with access to copies of any
appraisals, internal analyses, valuations, or memorandum, documents related to the Seller's purchase of the
Property, or any attorney -client documents related to the Property, if any.
(b) Physical Inspection. Buyer has seven months 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 seven months 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 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, including, without limitation, any petroleum or natural gas substance and
any substance or waste defined as hazardous or toxic by any governmental body or agency. 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 or removal under applicable
Federal, state or local law.
(d) Soil Inspection. Buyer has seven months 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 seven months 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.
(fl 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 referred to in
the Title Report ("Underlying Documents") to be delivered to Buyer within five (5) business days following
the Date of Agreement. Buyer has seven months 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. Seller shall deliver to Buyer, without warranty, the ALTA survey that Seller obtained
when it purchased the Property in October 2004. Buyer shall have seven months from the Date of Agreement to
approve the survey provided by Seller or obtain and approve its own ALTA survey. Buyer may elect within
the period allowed for Buyer's approval of a survey to have an ALTA extended coverage owner's form of title
policy, in which event Buyer shall pay any additional premium attributable thereto.
(h) 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.
Initials PAGE 3 Initials
9. Prorations and Adjustments.
9.1 Taxes. There shall be no proration of taxes. Buyer acknowledges that after the Los Angeles County
Assessor's Office receives notice of the transfer of the Property, the Assessor's Office will establish a new
value for the Property as of the date of recordation of the Grant Deed. A tax bill will then be generated and sent
to Buyer. Seller is not responsible to credit Buyer with any taxes from July 1 to the Closing Date as Seller has
no tax liability as a result of Seller's tax exempt status.
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.
10. Representations and Warranties of Seller and Disclaimers.
10.1 Buyer acknowledges that 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 faults or
defects on the Property or any Hazardous Substance that may be in, on, under, or around the Property. 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; 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:
Authority of Seller. Seller is the owner of the Property and 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, which
authority will be evidenced by the City of Vernon City Council's approval of this Agreement prior to its
execution by the Seller.
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, 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 other similar 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, 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. 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
FAVOR AT THE TIME OF EXECUTING THE RELEASE WHICH IF KNOWN BY HIM MUST HAVE
MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.
11
Buyer's Initials Seller's Initials
71. Entry onto Property.
Buyer's right to enter onto the Property prior to the Closing for inspections and testing for purposes of all
due diligence matters is subject to the terms of Paragraph 21.
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
Initials PAGE 5 Initials
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 if made 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.
16. Duration of Offer.
16.1 If a signed copy of this offer (with Paragraphs 10.5 and 17 and 25 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
F e-4 � 10 , 2007 it shall be deemed automatically revoked, and if Seller has not signed this offer by 5:00
P.M. on ' r-1 � c N 3 / , 2007 it shall be deemed automatically revoked.
16.2The 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)
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 OF ALL
CONTINGENCIES PROVIDED FOR THE BUYER'S BENEFIT, BUYER BREACHES THIS
AGREEMENT, SELLER SHALL BE ENTITLED TO LIQUIDATED DAMAGES IN THE AMOUNT OF
$200,000.00. 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 BY2 SELLER.
Buyer's Initials
Seller's Initials
18. Miscellaneous.
18.1 Binding Effect. This Agreement shall be binding on the Parties only if signed by both Parties and if
Paragraphs 10.5, 17, and 25 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.
Initials PAGE 6 Initials
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.
18.7 No Further Offers. Seller shall not solicit or tender offers from other prospective buyers or tenants
for the Property unless this Agreement is terminated prior to the Closing by either Party.
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 26.
The undersigned Buyer offers and agrees to buy the Property on the terms and conditions stated and
acknowledges receipt of a copy hereof.
BUYER:
DP Vernon, LLC, a California limited liability company
By: �-•!
Name: O-( C- /, �
Its: Vice President and Treasurer
Date: February 9, 2007
Address:
818 W. 7�h Street
Suite 410
Los Angeles, CA 90017
Telephone: 213-213-8600
Facsimile: 213-213-8601
Email: ebender@downtown-properties.com
Federal ID No.
Initials PAGE 7 Initials
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:��..�
Hilario Gonzales, Mayor Pro Tem
Dated: .C���I1� 7
Att t:
Name: Manuela Gir n
Title: Acting City Clerk
Approved As to
'e.1111mmom
.- 111HOMM
Title: Acting City Attorney
Address: 4305 Santa Fe Avenue
Vernon, CA 90058
Telephone: 323-583-8811
Fax: 323-826-1438
Federal ID No.: 95-6000808
Initials PAGE 8 Initials
01910/0006 147248.5
Addendum to Standard Offer, Agreement
And Escrow Instructions for Purchase of Real Estate
Buyer: DP Vernon, LLC
Seller: City of Vernon
Premises: 5001 S. Soto Street, Vernon, California
Dated: February J�_, 2007
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 which Seller will provide access and
will provide reasonable copying in accordance with Paragraph 7.1 of the Pre -Printed Agreement,
all other inspections and reports shall be at Buyer's expense. Upon mutual execution of the
Purchase Agreement and Buyer's delivery of certificates of insurance evidencing coverage as set
forth below and as further described in Exhibit `B" attached hereto and incorporated herein,
Buyer and its agents shall have access to the Property to allow for necessary inspections and
testing; provided, however, that Buyer shall provide not less than 72 hours prior notice of its
intent to enter onto the Property or to perform any inspections or tests, which notice shall be
given to Lew Pozzebon by telephone at 323-583-8811 or by email at 1pozzebonnci.vemon.ca.us
if the inspections or testing relate to environmental matters and shall be given to Kevin Wilson
by telephone at 323-583-8811 or by email at kwilson(oDci.vemon.ca.us if the inspections or
testing relate to Property conditions other than environmental matters. All notices shall be given
and all testing and inspections shall be performed on Monday through Thursday (excluding
holidays). Further, Buyer may not conduct any intrusive tests or borings except in accordance
with the terms set forth below. All testing and inspections shall be done at Buyer's sole cost and
expense, with good and proper techniques, using personnel qualified and licensed to perform the
testing and inspections, and in compliance with all applicable federal, state and local laws,
ordinances, rules and regulations. Buyer, at its sole cost and expense, shall obtain any necessary
governmental permits prior to conducting any tests or inspections.
Buyer, for itself, its employees, contractors, and agents (the "Buyer Parties"), and others entering
onto the Property at the request of Buyer, hereby releases the Seller, its elected officials, staff,
employees, representatives and agents from all claims, actions, losses, damages, injuries, costs
and expenses (including, without limitation, reasonable attorneys' fees and costs), including all
claims of illness, injury, death, or property damage, arising out of or resulting from any Buyer
Parties entering onto the Property or performing any work thereon.
Buyer hereby agrees to indemnify, defend and hold Seller, its elected officials, staff, employees,
representatives and agents harmless from and against any and all loss, claims, damage, liability,
obligations, demands, and expenses of any kind or nature whatsoever arising out of or resulting
from the entry upon the Property by any Buyer Party, any work undertaken by any Buyer Party
in connection with the Property, any damage or liability incurred by reason of any acts or
omissions of any Buyer Party, including any damages resulting from the release of any
Hazardous Materials by any Buyer Party onto the Property or any adjacent or nearby property or
into the environment. This indemnification shall include, without limitation, any damage to the
Property or the personal property of any tenant or person residing or occupying the Property, or
injury or death to persons. Notwithstanding anything to the contrary in this Paragraph 21, the
indemnity described herein shall not apply to any claims arising out of the discovery of pre-
existing contamination during Buyer's entry or testing, except to the extent that Buyer's
activities, testing, or entry onto the Property exacerbate the condition of any pre-existing
contamination, in which event this indemnity shall apply only to the exacerbated conditions.
This paragraph shall survive the termination of this Purchase Agreement.
Prior to entering upon the Property, Buyer shall (i) procure, pay for and keep in full force and
effect until the termination of this Purchase Agreement, an occurrence form commercial general
liability policy with respect to the Property and the activities of Buyer, its agents, employees,
contractors and consultants, protecting Buyer and Seller, its elected officials, staff, employees,
01910/0006147255.6 1 __ r, /
agents, and consultants, as additional insureds, against claims for bodily injury, personal injury
and property damage based upon or arising out of the ownership, use, occupancy and activities
on the Property and all areas appurtenant thereto, with single limit coverage in an amount not
less than $1,000,000 per occurrence with an annual aggregate of not less than $2,000,000, an
"Additional Insured -Managers or Lessors of Premises Endorsement" and contain the
"Amendment of the Pollution Exclusion Endorsement" for damage caused by heat, smoke or
fumes from a hostile fire, (ii) procure, pay for and keep in full force and effect until the
termination of this Purchase Agreement, or require Buyer's environmental consultants to procure,
pay for and keep in full force and effect for such period, an occurrence form pollution liability
insurance policy with respect to the Property and the activities of Buyer, its consultants, agents,
employees, contractors and subcontractors, relating to the Property in which the limits shall not
be less than Five Million Dollars ($5,000,000) per occurrence, and (iii) procure, pay for and keep
in full force and effect until the termination of this Purchase Agreement, such other coverage as
is described in Exhibit `B" hereto. All of such policies (except for the Workers' Compensation
policy) shall name Seller, its elected officials, staff, employees, agents, and consultants, as an
additional insured party, and shall comply with the other requirements set forth in Exhibit `B"
hereto, and Buyer shall provide Seller with certificates of insurance evidencing such insurance.
The certificates of insurance (including the Declaration Page and Schedule of Forms and
Endorsements) shall be delivered to Willard Yamaguchi, Esq., Chief Deputy City Attorney, at
4305 Santa Fe Avenue, Vernon, California 90058. The liability policy shall not contain any
intra-insured exclusions as between insured persons or organizations, but shall include coverage
for liability assumed by Buyer under this Purchase Agreement as an "insured contract" for the
performance of Buyer's indemnity obligations under this Purchase Agreement and shall include
contractual liability coverage, oral and written, operations premises liability, personal injury,
independent contractors, broad form property damage, and cross -liability coverage. The limits
of said insurance shall not, however, limit the liability of Buyer nor relieve Buyer of any
obligation hereunder. All insurance carried by Buyer shall be primary to and not contributory
with any similar insurance carried by the Seller, whose insurance shall be considered excess
insurance only.
Seller, its agent(s) and 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 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.
Any environmental documents, reports or information obtained by Buyer or its consultants with
respect to the Property shall be received, held and used confidentially.
Buyer shall deliver to Seller copies of all analyses, tests, studies, data, documents, reports and
information obtained by Buyer or its consultants with respect to the Property within five (5)
calendar days after receipt of same.
Notwithstanding any provisions of this Purchase Agreement to the contrary, Buyer may not
conduct any invasive 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 approve the Work Plan or to
object or suggest modifications to the Work Plan in writing. In the event Seller
objects 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 within the Due Diligence Period, Buyer may elect to terminate the
Purchase Agreement. 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.
01910/0006 147255.6 2
(b) Promptly after completion of the inspections and testing, Buyer, at its sole cost
and expense, shall restore the Property to the condition that existed prior to
commencing the work. Any holes, boring, trenches, or other invasive work
performed at the Property by Buyer or its contractors will be properly filled in and
compacted, and any unsafe conditions at the Property caused by or under the
control of Buyer shall be repaired and remediated. In that regard, Buyer shall
ameliorate and remove from the Property with all reasonable due care, in a safe
manner and to a safe degree in accordance with all applicable laws as the same
may be changed from time to time, at its sole cost and expense, any contamination
by Hazardous Materials (as defined below) in, on, about and beneath the Property,
which contamination was caused by Buyer or resulted from its investigation or of
the Property (the "Ameliorative Work"). All Ameliorative Work must be first
approved in writing by the Seller. If Buyer fails to restore the Property, Seller
shall request in writing that Buyer commence the restoration within five (5)
business days of Buyer's receipt of the written request and if Buyer fails to
commence the restoration within said time period, Seller, in addition to any other
rights and remedies available at law, may restore the Property to the condition that
existed prior to commencing the work and Buyer shall pay all reasonable
expenses incurred by Seller in connection with the restoration.
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 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.
24. Covenant re Continuing Use: Buyer acknowledges that Seller, as a City, has
implemented certain development plans and has established certain criteria for use of property
within the City. Buyer acknowledges and agrees that, for the Covenant Period, as defined in the
Grant Deed, all improvements on the Property shall be constructed, maintained, operated, and
used solely and exclusively for purposes of operating a "server farm" or "data center", as such
term is commonly used in the telecommunications industry (collectively, a "Data Center"). To
ensure compliance with Seller's development plans and Buyer's covenant as set forth in the
above sentence, (a) Buyer shall deliver to the Planning Department of the City of Vernon, not
later than 45 days prior to the last day of the Due Diligence Period, Buyer's "Full Property Site
Plan" (the "Site Plan") showing development plans for the Property that will include
development of a minimum of 100,000 usable square feet of building space [the usable square
footage shall be determined in accordance with the standards set forth in ANSI Z65.1-1996, as
promulgated by the Building Owners and Managers Association (the `SOMA Standard")] for
01910/0006 147255.6 3 Z�
sole and exclusive use as a Data Center, for approval by the City of Vernon; (b) the minimum of
100,000 square feet described in clause (a) shall be comprised of buildings that are each not less
than 50,000 usable square feet, as measured by the BOMA Standard; and (c) Buyer approves the
form and substance of the Grant Deed attached hereto as Exhibit "A", which shall be recorded on
the Closing. Seller shall cooperate with Buyer to assist Buyer in obtaining any required permits
or other approvals required to allow Buyer to improve and lease the Property in accordance with
the terms of this Paragraph 24; provided, however, that Buyer's building design shall comply
with all federal, state, and local laws and with all applicable building codes and shall include a
minimum of 100,000 usable square feet (in accordance with the BOMA Standard) of building
space (with first 100,000 square feet being comprised of buildings that are each not less than
50,000 square feet) constructed for use as a Data Center. The Site Plan shall specifically identify
the location of each building to be constructed, the usable square footage (in accordance with the
BOMA Standard), the order in which the buildings will be constructed, and the anticipated start
date and completion date for construction for each building. There shall be no improvements
constructed on the Property for any purpose other than use as a Data Center. Seller shall enter
into a Subordination, Non -Disturbance, and Attornment Agreement on commercially reasonable
terms with Buyer's tenants to assure such tenants that if Seller purchases the Property from the
Buyer as a result of Buyer's (or Buyer's tenants' or subtenants' or users') failure to comply with
the terms of this Paragraph 24 or the Grant Deed as to portions of the Property not leased,
subleased, or used by the tenant requesting non -disturbance, Seller, for a period of seven (7)
years following the date of the Seller's repurchase, shall not interfere with such tenant's (or
subtenant's or user's) operations so long as such tenant's (or subtenant's or user's) operations are
solely and exclusively for operation of a Data Center and are otherwise in compliance with the
terms of the lease or other agreement governing the tenant's (or subtenant's or user's) use of its
portion of the Property. Within fifteen (15) business days following the last day of the Due
Diligence Period, Buyer shall submit the documentation required to obtain a Conditional Use
Permit from the City of Vernon Community Services Department for construction of a Data
Center, and the Parties will cooperate with each other in order to process such documentation for
the issuance of the Conditional Use Permit. The terms and conditions of this Paragraph 24 shall
survive the Closing and shall not be merged into the Grant Deed; provided, however, that the
terms of this Paragraph 24 shall terminate upon the earlier of the last day of the Covenant Period,
as defined in the Grant Deed, or thirty (30) years following the date of the recordation of the
Grant Deed.
25. ARBITRATION OF DISPUTES:
25.1 USE OF JAMS. THE PARTIES AGREE THAT ANY DISPUTE OR CONTROVERSY
ARISING OUT OF OR RELATING TO ANY INTERPRETATION, CONSTRUCTION,
PERFORMANCE, TERMINATION OR BREACH OF THIS PURCHASE AGREEMENT OR
THE PURCHASE OF THE PROPERTY BY BUYER WILL BE SETTLED BY FINAL AND
BINDING ARBITRATION BY A SINGLE ARBITRATOR TO BE HELD IN LOS ANGELES
COUNTY, CALIFORNIA, IN ACCORDANCE WITH THE RULES OF THE JUDICIAL
ARBITRATION & MEDIATION SERVICES, INC. ("JAMS"). WITHOUT LIMITING ANY
OTHER PROVISION HEREIN, THIS PARAGRAPH 25 SHALL SURVIVE THE
TERMINATION OF THIS PURCHASE AGREEMENT AND WILL APPLY TO ANY
CLAIM, DISPUTE, OR CONTROVERSY THAT ARISES DURING OR AFTER THE
TERMINATION OF THIS PURCHASE AGREEMENT.
25.2 PROCEDURE. THE ARBITRATION SHALL TAKE PLACE BEFORE A SINGLE
RETIRED JUDGE OF THE SUPERIOR COURT OF THE STATE OF CALIFORNIA (THE
"ARBITRATOR") UNDER THE AUSPICES OF JAMS. SUCH ARBITRATION SHALL BE
INITIATED BY THE PARTIES, OR EITHER OF THEM, WITHIN TEN (10) CALENDAR
DAYS AFTER EITHER PARTY SENDS NOTICE OF A DEMAND TO ARBITRATE (THE
"ARBITRATION NOTICE") TO THE OTHER PARTY AND TO JAMS. THE
ARBITRATION NOTICE SHALL CONTAIN A DESCRIPTION OF THE SUBJECT
MATTER OF THE ARBITRATION, THE DISPUTE WITH RESPECT THERETO, THE
AMOUNT INVOLVED, IF ANY, AND THE REMEDY OR DETERMINATION SOUGHT.
25.3 SELECTION OF ARBITRATOR. WITHIN 15 CALENDAR DAYS AFTER THE
DATE OF THE NOTICE OF THE ARBITRATION NOTICE, EACH PARTY SHALL
DELIVER TO THE OTHER THE NAMES OF THREE RETIRED JUDGES FROM THE
JAMS PANEL, AND WITHIN 15 CALENDAR DAYS FOLLOWING RECEIPT OF THE
01910/0006 147255.6 4 Z�
NAMES, THE PARTIES SHALL MUTUALLY AGREE ON WHICH RETIRED JUDGE
SHALL SERVE; PROVIDED THAT IF THE PARTIES CANNOT AGREE WITHIN SUCH 15
DAY PERIOD, JAMS WILL SELECT THE ARBITRATOR. IN THE EVENT OF ANY
SUBSEQUENT VACANCY OR INABILITY TO PERFORM, THE ARBITRATOR SHALL
BE REPLACED IN ACCORDANCE WITH THE PROVISIONS OF THIS PARAGRAPH 25.3
AS IF SUCH REPLACEMENT WAS AN INITIAL APPOINTMENT TO BE MADE UNDER
THIS PARAGRAPH 25.3 WITHIN THE TIME CONSTRAINTS SET FORTH IN THIS
PARAGRAPH 25.3, MEASURED FROM THE DATE OF NOTICE OF SUCH VACANCY OR
INABILITY TO THE PERSON OR PERSONS REQUIRED TO MAKE SUCH
APPOINTMENT.
25.4 THE DECISION. ANY PARTY MAY BE REPRESENTED BY COUNSEL OR
OTHER AUTHORIZED REPRESENTATIVE. IN RENDERING A DECISION(S), THE
ARBITRATOR SHALL DETERMINE THE RIGHTS AND OBLIGATIONS OF THE
PARTIES ACCORDING TO THE SUBSTANTIVE AND PROCEDURAL LAWS OF THE
STATE OF CALIFORNIA AND THE TERMS OF THIS PURCHASE AGREEMENT. THE
DECISION OF THE ARBITRATOR SHALL BE BASED ON THE EVIDENCE
INTRODUCED AT THE HEARING, AND SHALL BE BASED ON, AND ACCOMPANIED
BY, A WRITTEN STATEMENT OF DECISION EXPLAINING THE FACTUAL AND
LEGAL BASIS FOR THE DECISION AS TO EACH OF THE PRINCIPAL
CONTROVERTED ISSUES. THE DECISION OF THE ARBITRATOR AS TO THE
RESOLUTION OF THE DISPUTE SHALL BE A CONCLUSIVE RESOLUTION. THE
ARBITRATOR SHALL DELIVER THE WRITTEN DECISION TO THE PARTIES WITHIN
30 CALENDAR DAYS FOLLOWING THE DATE OF THE SELECTION OF THE
ARBITRATOR. THE DECISION SHALL BE CONCLUSIVE AND BINDING, AND IT MAY
THEREAFTER BE CONFIRMED AS A JUDGMENT BY THE SUPERIOR COURT OF THE
STATE OF CALIFORNIA, SUBJECT ONLY TO CHALLENGE ON THE GROUNDS SET
FORTH IN THE CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 1286.2. THE
VALIDITY AND ENFORCEABILITY OF THE DECISION OF THE ARBITRATOR IS TO
BE DETERMINED EXCLUSIVELY BY THE CALIFORNIA COURTS. THE ARBITRATOR
SHALL HAVE THE AUTHORITY TO GRANT EITHER PARTY ALL REMEDIES
OTHERWISE AVAILABLE BY LAW, INCLUDING INJUNCTIONS.
25.5 PAYMENT OF ARBITRATOR. THE NON -PREVAILING PARTY SHALL PAY THE
COSTS OF THE ARBITRATOR AND THE ARBITRATION PROCESS.
25.6 NOTICE OF WAIVER. NOTICE: BY INITIALLING IN THE SPACE BELOW YOU
ARE AGREEING TO HAVE ANY DISPUTE ARISING OUT OF THE MATTERS
INCLUDED IN THE `ARBITRATION OF DISPUTES' PROVISION DECIDED BY
NEUTRAL ARBITRATION AS PROVIDED BY CALIFORNIA LAW AND YOU ARE
GIVING UP ANY RIGHTS YOU MIGHT POSSESS TO HAVE THE DISPUTE LITIGATED
IN A COURT OR JURY TRIAL. BY INITIALLING IN THE SPACE BELOW YOU ARE
GIVING UP YOUR JUDICIAL RIGHTS TO DISCOVERY AND APPEAL, UNLESS THOSE
RIGHTS ARE SPECIFICALLY INCLUDED IN THE `ARBITRATION OF DISPUTES'
PROVISION. IF YOU REFUSE TO SUBMIT TO ARBITRATION AFTER AGREEING TO
THIS PROVISION, YOU MAY BE COMPELLED TO ARBITRATE UNDER THE
AUTHORITY OF THE CALIFORNIA CODE OF CIVIL PROCEDURES. YOUR
AGREEMENT TO THIS ARBITRATION PROVISION IS VOLUNTARY.
WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT
DISPUTES ARISING OUT OF THE MATTERS INCLUDED IN THE `ARBITRATION OF
DISPUTES' PROVISION Y E TRAL ARBII7TfRATION.
BUYER'S INITIALS
r,
SELLER'S INITIALS
01910/0006 147255.6
5 - v'
26. Electric Rate: Depending on its usage, the Buyer could qualify for and be accepted at
the Vernon Light and Power TOU-I or TOU-V rate, so long as Buyer purchases power at 66kV
and 20 MVA or more. Under the current TOU-I rate schedule, with a 20 MVA load, 98% load
factor, and the entire 20-MVA load subject to interruption, the effective cost per kWh would be
$0.057. Seller will work with Buyer to determine the appropriate electrical rate schedule for the
Property. A copy of the current TOU-I schedule and the TOU-V schedule are attached hereto as
Exhibit "C". The TOU-I and TOU-V schedules are subject to revision at any time and from time
to time by the Vernon Department of Light and Power.
Executed as of the date first above written.
SELLER:
City of Vernon
By: � OO 2 / G�
X1XXX X1 �M
Hilario Gonzales, Mayor Pro-Tem
Attest:
ame: Manuela Giron
Title: Acting City Clerk
Approved As to Aorm:
By. ���
Name ff e A. Harrison
Title: ctinN City Attorney
BUYER:
DP Vernon, LLC, a California limited liability company
By:
Name: e-- 6^ ---
Its: Vice President and Treasurer
01910/0006 147255.6 6
EXHIBIT A
To Addendum to Standard Offer, Agreement
And Escrow Instructions for Purchase of Real Estate
DP Vernon, LLC (Buyer) and City of Vernon (Seller)
5001 S. Soto Street, Vernon, California
GRANT DEED
RECORDING REQUESTED BY
North American Title Company
WHEN RECORDED MAIL THIS DOCUMENT
AND TAX STATEMENTS TO:
DP Vernon, LLC
THE SPACE ABOVE IS FOR RECORDER'S USE
GRANT DEED
APN: 6308-002-008
Escrow No.
Title No.
DOCUMENTARY TRANSFER TAX IS $ NOT OF PUBLIC RECORD.
0 computed on full value of property conveyed, or
❑ computed on full value less value of liens and
encumbrances remaining at time of sale.
❑ Unincorporated area: 0 City of Vernon
FOR VALUABLE CONSIDERATION, RECEIPT OF WHICH IS HEREBY ACKNOWLEDGED,
The City of Vernon, a body corporate and politic (the "Grantor")
HEREBY GRANT(S), SUBJECT TO THE CONDITIONS SUBSEQUENT DESCRIBED HEREIN, TO:
DP Vernon, LLC, a California limited liability company (the "Grantee")
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
5001 S. Soto Street, City of Vernon, State of California, 90058.
The foregoing grant of Property is subject to non -delinquent taxes, all easements, covenants,
conditions and restrictions of record, and all other matters of record affecting title to such
Property.
Grantee acknowledges that Grantor, as a municipality, has implemented certain development
plans and has established certain criteria for use of property within the City. Accordingly, the
foregoing grant of Property is subject to the conditions subsequent described herein. Grantee's
and Grantee's successors' rights to the estate granted herein may be terminated by Grantor or
Grantor's successors in the event of a breach of the following conditions subsequent.
During the Covenant Period, as defined below, all improvements on the Property shall be
constructed, maintained, operated, and used solely and exclusively for purposes of operating a
"server farm" or "data center", as such term is commonly used in the telecommunications
industry (collectively, a "Data Center"). To ensure compliance with the above sentence, Grantee
01910/0006 147255.6 7 G
shall construct and improve a minimum of 100,000 usable square feet of building space [the
usable square footage shall be determined in accordance with the standards set forth in ANSI
Z65.1-1996, as promulgated by the Building Owners and Managers Association (the `SOMA
Standard")] solely for the development and continuing exclusive use of a Data Center, and
otherwise in accordance with the time frame set forth herein and the location description set forth
in the site plan that is approved by the City of Vernon (the "Site Plan"). The minimum of
100,000 square feet shall be comprised of buildings that are each not less than 50,000 square
feet, as measured by the BOMA Standard. The exterior and interior of the structures and
buildings on the Property shall be designed and improved for the specific purpose of use as a
Data Center, and the buildings (including the usable square footage of each building), driveways,
and landscaped areas will be constructed and located on the Property in accordance with the Site
Plan, which shall show the order in which the buildings will be constructed, and the anticipated
start date and completion date for construction for each building. Grantee acknowledges that the
Property is being sold for the specific purpose set forth herein and that there shall be no
improvements constructed on the Property for any purpose other than for use as a Data Center
during the Covenant Period.
Grantor's grant of the Property is conditioned on strict compliance with the following conditions:
(1) Grantee's (and Grantee's successors and assigns) continuing compliance with the
covenant that the Property not be used for any purpose other than a Data Center for the period of
five (5) years following Grantee's completion of construction of the last building required to
achieve full development of a minimum of 100,000 square feet as a Data Center (comprised of
buildings not less than 50,000 square feet), as described above, as evidenced by a Certificate of
Completion of Construction signed by Grantee's architect and reasonably approved by the City
of Vernon (the "Covenant Period");
(2) The first building to be constructed on the Property will be fully developed as a Data
Center within nine (9) months following the date of recordation of this Grant Deed, and the last
building required to achieve the minimum 100,000 square feet described above will be
developed as a Data Center within twelve (12) months following the date of recordation of this
Grant Deed, and in accordance with the location description set forth in the Site Plan, subject to a
day for day delay if there is an occurrence of an event beyond the reasonable control of Grantee
("Force Majeure Event") (provided, however, that lack of funds or failure to apply for permits on
a timely basis or to comply with City of Vernon requirements in connection with obtaining
permits, or failure to deliver plans that are in compliance with this Grant Deed shall not
constitute a Force Majeure Event, and provided, further, that work shall commence again as soon
as possible following the Force Majeure Event);
(3) The Property will automatically revert to the Grantor if the Property is not developed
within the time frame and used on the terms set forth herein; provided, however, that the
reversion will not be effected if Grantee cures the default within four (4) months following
delivery of notice of default from the Grantor; and
(4) The covenants and conditions and right of reversion described herein run with the
land and are binding on all tenants, users, owners, and successors within the Covenant Period.
If the Property reverts to the Grantor, the Grantor will purchase the entirety of the Property from
the Grantee, and Grantee shall sell the entirety of the Property to the Grantor, including all
buildings, for the fair market value of the land and buildings, as determined in accordance with
the appraisal procedure set forth in Exhibit `B" hereto. The closing of the repurchase shall take
place not later than thirty (30) days following the determination of the Fair Market Value of the
Property.
The obligations of Grantee and right of reversion to Grantor as described herein shall terminate
on the earlier of the last day of the Covenant Period or thirty (30) years following the date of the
recordation of this Grant Deed.
[Signatures on following page]
01910/0006 147255.6 8�����
Date:
"Grantor"
THE CITY OF VERNON,
a public body corporate and politic
By:_
Title:
200
"Grantee"
By its execution of this document, Grantee agrees to the foregoing covenants.
DP Vernon, LLC, a California limited liability company
By: Downtown Properties Holdings, LLC, its sole Manager
BY:
Name:
Its Sole Manager
01910/0006 147255.6 9
STATE OF CALIFORNIA)
)SS.
COUNTY OF LOS ANGELES)
ON , 200_, BEFORE ME, THE UNDERSIGNED, A NOTARY PUBLIC
IN AND FOR SAID STATE, PERSONALLY APPEARED ,
PERSONALLY KNOWN TO ME OR PROVED TO ME ON THE BASIS OF SATISFACTORY
EVIDENCE TO BE THE PERSON WHOSE NAME IS SUBSCRIBED TO THE WITHIN
INSTRUMENT AND ACKNOWLEDGES TO ME THAT HE EXECUTED THE SAME IN HIS
AUTHORIZED CAPACITY, AND THAT BY HIS SIGNATURE ON THE INSTRUMENT, THE
PERSON, OR THE ENTITY UPON BEHALF OF WHICH THE PERSON ACTED, EXECUTED THE
INSTRUMENT.
WITNESS MY HAND AND OFFICIAL SEAL.
(Notary Signature)
(NOTARY SEAL)
STATE OF CALIFORNIA)
)SS.
COUNTY OF LOS ANGELES)
ON , 200 , BEFORE ME, THE UNDERSIGNED, A NOTARY
PUBLIC IN AND FOR SAID STATE, PERSONALLY APPEARED
, PERSONALLY KNOWN TO ME OR PROVED TO ME
ON THE BASIS OF SATISFACTORY EVIDENCE TO BE THE PERSON WHOSE NAME IS
SUBSCRIBED TO THE WITHIN INSTRUMENT AND ACKNOWLEDGES TO ME THAT HE
EXECUTED THE SAME IN HIS AUTHORIZED CAPACITY, AND THAT BY HIS SIGNATURE ON
THE INSTRUMENT, THE PERSON, OR THE ENTITY UPON BEHALF OF WHICH THE PERSON
ACTED, EXECUTED THE INSTRUMENT.
WITNESS MY HAND AND OFFICIAL SEAL.
(Notary Signature)
(NOTARY SEAL)
01910/0006 147255.6 10 L Ii
EXHIBIT A TO
GRANT DEED
LEGAL DESCRIPTION
01910/0006 147255.6 11 �.
EXHIBIT B TO
GRANT DEED
APPRAISAL PROCEDURE
For purposes of the right of reversion, "Fair Market Value" shall mean the fair market
value, in cash, obtainable for the Property in an arm's length transaction, taking into account the
location of the Property in the City of Vernon and determining its value as improved industrial
land, taking into account the fair market value of the buildings as general use industrial
buildings. Fair Market Value shall not include any special improvements made to the Property
in connection with its potential use as a Data Center. The parties shall attempt to reach
agreement on Fair Market Value within thirty (30) days after receipt by Grantee of the Grantor's
notice of exercise of the right of reversion. Failing such agreement, Fair Market Value shall be
determined by appraisal conducted in the following manner:
The party desiring the appraisal shall deliver to the other party notice of appointment of a person
who is a duly qualified professional real estate appraiser, who has been a member of the highest
standing, qualification and rank or certification for a period of at least ten (10) years in the
Appraisal Institute or similar professional appraisal organization and who has had at least ten
(10) years personal experience in the appraisal of unimproved industrial land located in Los
Angeles County. Within ten (10) days after receipt of such notice, the other party shall deliver to
the first party notice of appointment of a person having similar qualifications to act as appraiser
on its behalf. If the other party fails to notify the first party of the appointment of the second
appraiser within said period of time, the first appraiser shall serve as the sole appraiser. If the
two appraisers so designated are unable to agree as to the Fair Market Value of the Property
within thirty (30) days after the designation of the second appraiser, and their appraisals are
within ten percent (10%) of each other, the Fair Market Value shall be the mathematical average
of their separate appraisals. If their appraisals differ by more than ten percent (10%), they shall
appoint a third appraiser having similar qualifications. If the two appraisers are unable to agree
on a third appraiser within ten (10) days after the expiration of such thirty (30) day period, the
third appraiser shall be selected by both parties within ten (10) days thereafter. If the parties do
not so agree within such period of time, either party may apply to the Superior Court of Los
Angeles County, California, for the appointment of such third appraiser and the other party shall
not raise any objection as to the court's full power and jurisdiction to entertain the application
and make the appointment. In the event of the failure, refusal or inability of any appraiser to act,
his successor shall be appointed within ten (10) days by the party who originally appointed him
(or in the event of such party's failure so to do, or in the case of the third appraiser, his successor
shall be appointed in the manner hereinbefore provided). Each of the appraisers so appointed
shall conduct an appraisal of the Property and shall report its determination of the Fair Market
Value within thirty (30) days after the third appraiser is appointed. If the three appraisers are
unable to agree as to such Fair Market Value within such period of forty-five (45) days after the
third appraiser is appointed, the Fair Market Value shall be deemed to be the average of the
values determined by the two appraisers whose appraised values are closest in value to each
other. Each party shall pay the fees and expenses of the appraiser appointed by such party and
the fees and expenses of the third appraiser shall be borne equally by the parties.
01910/0006 147255.6 12
EXHIBIT B
To Addendum to Standard Offer, Agreement
And Escrow Instructions for Purchase of Real Estate
DP Vernon, LLC (Buyer) and City of Vernon (Seller)
5001 S. Soto Street, Vernon, California
INSURANCE SCHEDULE
Buyer and its contractor shall provide proof of insurance, including a standard certificate of
insurance, in at least the following amounts and coverage (combined single limit permitted). All
insurance required herein shall be by companies duly licensed or admitted to transact business in
California and maintaining a "General Policyholders Rating" of at least B+, V, as set forth in t he
most current issue of `Best's Insurance Guide".
a.
a
Coverage and Limits
Bodily Injury
Hazards Each Person Each Accident
Automobile Liability
Owned Automobiles $500,000 $1,000,000
1. Hired Automobiles $500,000 $1,000,000
2. Non -Owned
Automobiles
Workers' Compensation
Employers' Liability
Liability
Premises Operations
Elevators
(if applicable)
Independent
Contractors
Products - Completed
Operations
Contractual Liability
Umbrella Liability
$500,000 $1,000,000
Statutory
$1,000,000 per employer
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$2,000,000
$2,000,000
$2,000,000
$2,000,000
$2,000,000
$2,000,000
$2,000,000
Property Damage
Each Accident
$500,000
$500,000
$500,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$2,000,000
The general liability policy shall contain the following special endorsements which shall be
noted on or attached to the standard certificate of insurance:
1. An endorsement naming the City of Vernon, its officers, and employees as
additional insureds under the policy.
2. An endorsement providing the City of Vernon thirty (30) days notice of
cancellation or material reduction of coverage.
3. An endorsement providing coverage for all operations under the City of Vernon
permit and specifying the activities covered.
4. Such other endorsement as may be required by addendum hereto.
5. A copy of your general and umbrella insurance policy declarations page.
6. Copy of schedule of forms of endorsements.
01910/0006 147255.6 13
EXHIBIT C
To Addendum to Standard Offer, Agreement
And Escrow Instructions for Purchase of Real Estate
DP Vernon, LLC (Buyer) and City of Vernon (Seller)
5001 S. Soto Street, Vernon, California
ELECTRIC RATE SCHEDULE
01910/0006 147255.6 14
CITY OF VERNON
LIGHT AND POWER DEPARTMENT
Schedule No. TOU-I
GENERAL SERVICE -LARGE INTERRUPTIBLE
APPLICABILITY
This. schedule is optional for all customers eligible for service under Schedule TOU-V
who commit to curtail at least 50 percent of such customers maximum demand, which
shall not be less than 7,500 kW per Period of Interruption.
In addition, the following conditions shall apply:
1. Service Voltage must be greater than 50 kV; and
2. The customer's Maximum Demand must be 12,500 kW or above; and
3. This schedule is in effect until suspended by the Light & Power Department when
in their judgment there is no additional need for Interruptible Demand.
TERRITORY
Within the city limits of the City of Vernon.
RATES
All charges and provisions of schedule TOU-V shall apply as follows:
In accordance with the terms and conditions of this schedule the customer's bill will be
credited $3.75 per kW month for all kW in excess of the customer's specified Firm
Demand Level.' The bill credit will be based on the difference between the customer's
on -peak Maximum Demand recorded during the monthly billing period and the
customer's specified Firm Demand Level.
Charges for Excess Demand may apply under certain conditions, as provided in special
condition S.
SPECIAL CONDITIONS
Interruptible Demand: The interruptible Demand shall be the measured
difference between the customer's demand, at the time of interruption, and the
customer's Firm Demand Level.
2. Firm Demand Level: The Firm Demand Level is the Maximum Demand the
Department is expected to supply during a Period of Interruption.
Excess Demand: The Excess Demand shall be the measured demand which
exceeds the Firm Demand Level during each Period of Interruption.
4. - Interruptible Service Agreement: To receive interruptible service under this
schedule a customer shall sign an agreement for a specified term and Firm
Demand Level. Eligible customer shall comply with all the provisions of the
Agreement.
5. Notice of Interruption: The Department will give the customer a minimum 30
minutes notice of a Period of Interruption to enable the customer to disconnect
the necessary load to prevent Excess Demand. Communication procedures shall
be specified in the Interruptible Service Agreement.
6. Period of Interruption: A Period of Interruption shall be an interval which
commences thirty minutes after Notice of interruption and which ends upon
notification from the Department. During which the customer will be required
to disconnect sufficient load to reduce the demand on the system to the Firm
Demand Level. A Period of Interruption can occur:
a. Upon the notification from the Independent System Operator (ISO)
requiring the Department to shed load.
b. Uponthe unscheduled outage of the Malburg Generating Station or any
other generating unit internal to the Department system.
7. Frequencies and Duration of Interruption: The Periods of Interruption will not
exceed. ten per month or twenty-four per year nor last longer than 12 hours.
8. Excess Demand Charge: Upon the first occurrence of Excess demand during a
period of interruption, such excess demand shall be billed at $7.50 per kW.
Upon the second occurrence of Excess demand during a Period of Interruption,
such excess demand shall be billed at $11.25 per kW.
Upon the third occurrence of Excess demand during a Period of Interruption,
within the same 12-month period, the customer will be disqualified from further
interruptible rate service.
9. Verification of Ability to Interrupt:
Interruptible Rate Service customers shall periodically be required to
demonstrate ability and willingness to disconnect all load except the specified
Firm Demand Level within a Notice of Interruption Period. Testing procedures
for such verification shall be specified in the Interruptible Service Agreement
terms.
CITY OF VERNON
LIGHT AND POWER DEPARTMENT
Schedule No. TOU-V
GENERAL SERVICE -LARGE
APPLICABILITY
This schedule is applicable for all customers with demands of 500 kW or higher for any three
months during the preceding twelve months and for whom time of use meters have been
installed.
TERRITORY
Within the city limits of the City of Vernon.
RATES
Customer Charge
Demand Charge (to be added to Customer Charge):
All kW of on -peak maximum billing demand, per kW..... .
Plus all kW of mid -peak maximum billing demand, per kW
Plus all kW of off-peak billing demand, per kW
Energy Charge (to be added to Demand Charge):
All on -peak kWh, per kWh .......................
Plus all mid -peak kWh, per kW ....................
Plus all off-peak kWh, per kWh .............. ... .
PER METER PER MONTH
Summer
winter
May, June Oct July, Auggst. Sept
Nov. d= AVJI
$180.61
$180.61
$180.61
$ 9.542
$ 11.657
$ 7.560
$ 1.808
$ 1.808
$ 1.808
No Charge* No Charge*
No Charge*
5.733�
7.2040
5.733¢
5.3640
6.8360
5.36,V
4.8140
5.5660
4.8140
*(Subject to Minimum Demand Charge. See Special Condition No. 9.)
Authorized by the City of Vernon
Ordinance No.
940
Resolution No.
7062
Resolution No.
7248
Resolution No.
7557
Resolution No.
7638
Effective 12/06/83
Effective 01/01/98
Effective 01/01/99
Effective 0 1
Effective 10/01/00
Resolution No. 7747
Resolution No. 7841
Resolution No. 82 4
Resolution No. 8746
Resolution No. 9M 554
Effective
05/01/01
Effective
10/01/01
Effective
11/01/03
Effective
O6/01105
Effective
11/01/06
Schedule TOU-V (cont.)
SPECIAL CONDITIONS
1. Time Period:
Time Periods are defined as follows:
On -Peak
1:00 p.m. to 7:00 p.m.
Summer Weekdays except holidays
5:00 p.m. to 10:00 p.m.
Winter weekdays except holidays
Mid -Peak
Off Peak
9:00 a.m. to 1:00 p.m. and All other hours:
7:00 p.m. to 11.00 p.m.
Summer weekdays except holidays
8:00 a.m. to 5:00 p.m.
Winter weekdays except holidays
Off -Peak Holidays are: New Year's Day (January 1), Washington's Birthday (third
Monday in February), Memorial Day (last Monday in May), Independence Day (July 4),
Labor Day (first Monday in September), Veteran's Day (November 11), Thanksgiving
Day (fourth Thursday in November), and Christmas Day (December 25).
When any holiday listed above falls on Sunday, the following Monday will be
recognized as an off-peak period. No change in off-peak will be made for holidays
falling on Saturday.
nue
The summer season time periods shallcommence, on time periods shall commence at
through October 31 of each year an
12:01 a.m. November 1 and continue through April 30 of the following year.
2. Biding Demand: Separate billing demands for the on -peals, mid -peak, and off-peak time
periods shall be established for each monthly billing period. The billing demand for
each time period shall be the maximum demand for that time period occurring during the
respective monthly billing period. The billing demand shall be determined to the nearest
kW.
id-
3. MgXi Demand: The maximum maximum
axidemands shall any for 1shed each for the on -peak, period shall bethe
peak, and off-peak periods. The m
measured maximum average kilowatt input indicated or recorded by instruments during
any 15-minute metered interval. Where the demand is intermittent or subject to violent
fluctuations, a 5-minute interval may be used.
Authorized by the Citv of Vernon
Ordinance No.
940
Resolution No.
7062__
Resolution No.
7248
Resolution No.
7557
Resolution No.
7638
Resolution No.
7689
Effective
12/06/83
Effective
01/01/98
Effective
01/01/99
Effective
07/01/00
Effective_
10/ 11100
Effective
01/01/01
Resolution No_
7747
Resolution No.
7841
Resolution No.
8294
Resolution No.
8746 .
Resolution No.
9054
Effective
05/01/01
Effective
10/01/01
Effective
11/01/03
Effective
06/01/05
Effective
11/01/06
2
Schedule TOU-'V (wnt.)
4. Volta e Discount: The charges including adjustment will be reduced by 3% for service
delivered and metered at voltages of from 2 or service
kV through 10 kV; by
V; and by 5% for service
delivered and metered at voltages of from I I kV through 50 k
delivered and metered at voltages over 50 M except that when only one transformation
from a transmission voltage level is involved, a customer normally entitled to a 3%
discount will be entitled to a 4% discount.
5. Power Factor Ad' u� stn1erit=
a. Service Delivered and Metered at 4 kV or Greater: The charges will be adjusted
each month for reactive demand as follows:
The charges will be increased by 20.6 cents per kilovar of maximum reactive
demand imposed on the Utility in excess of 20 percent of the maximum number of
kilowatts.
The maximum reactive demand shall be the highest measured maximum average
kilovar demand indicated or recorded by metering to be supplied by the Utility
during any 15-minute metered interval in the month. The kilovars shall be
determined to the nearest unit. A ratchet device will be installed on each kilovar
meter to prevent reverse operation of the meter.
b. Service Delivered and Metered at Less than 4 kV: The charges will be adjusted
each month for the power factor as follows:
The charges will be increased by 20.6 cents per kilovar of maximum reactive
demand imposed on the Utility in excess of 20 percent of the maximum number of
kilowatts.
The kilovars of reactive demand shall be tcalculated
olof � �� kilovar-hours to the kilowattg the kilowatts
-
hours. measured maximum demand by the
hours. Demand in kilowatts and kilovars kilovar-hour shall be e mete o pred to event its reverse
t.
A rachet device will be installed o
operation on leading power factors.
6. Temporary Discontinuance of Service: Where the use of energy is seasonal or
intermittent, no adjustments will be made for a temporary discontinuance of service.
Any customer, prior to resuming service within twelve months after such service was
discontinued, will be required to pay all charges which would have been billed if service
had not been discontinued.
Authorized by the Ci of Vernon
Ordinance No.
940
Resolution No.
7062
Resolution No.
7248
ResoIution No.
7557
ResoIution No.
7638
Resolution No.
7689
Effective
12/06/83
Effective
01/01/98
Effective
01/01/99
Effective
07/01/00
Effective
10/01/00
Effective
01/01/01
Resolution No.
7747
Resolution No.
7841
Resolution No.
8294
Resolution No.
8746
Resolution No.
9054
Effective
05/01/01
Effective
10�01/01
Effective
11� 3
Effective
06/01/05
Effective
11/01/06
3
schcdOe TOU-V (cunt.)
7. Excess Transformer Capacity: A transformer capacity in excess of a customer's contract
demand which is either required by thUtility because r capacity ity shall be billed at $1e nature of the �03
load or requested by the customer. Excess
kVA per month.
8. Contract Demand: A contract demand will be established by the Utility, based, upon
applicant's demand requirements foranycustomer
thisnschedule who requests an increase
is
schedule and for any customer of record
decrease in transformer capacity in accordance with the Light and Power Department
Rules for Electric Service. A contract demand arrangement is available upon request for
all customers of record on this schedule. Contract demand is based upon the nominal
kilovolt -ampere rating of the Utility's serving transformer(s) or the standard transformer
size determined by the Utility as required to serve the customer's stated measurable
kilowatt demand, whichever is less and is expressed in kilowatts.
9. Minimum Demand Charge: Where a none -time related maximum demand or contract
demand is established, a monthly minimum demand charge shall be $1.03 per kilowatt of
contract demand.
10. Public Benefits Char e: A mandatory Public Benefits Charge has been assessed pursuant
to Assembly Bill 1890, signed into law by the Governor on September 20, 1996. The
charge is 2.85 percent of the total bill before any special fees or charges. In accordance
with the mandates of Assembly Bill 995, the Public Benefits Charge of 2.85 percent will
be assessed through January 1, 2012.
11i In Lieu of Tax and Franchise Payments: The
base
a franchise charge shave been increased
by 3 percent to reflect payments in -lieu of
tax and ayme
12. Voltage: Service will be supplied at one standard voltage.
13. Removal or Modification of Equipment: Where transformers or facilities for services are
ordered removed or modified by a customer and such services are restored within 36
months from the date of the order to remove or to modify, the customer shall pay to the
Utility in advance of reinstallation a nonrefundable amount equal to the cost of removal
or modification of the transformers or facilities of the prior installation and the estimated
cost of such reinstallation.
Authorized by the City of Vernon
ordinance No.
940
Resolution No.
7062
Resolution No.
7248
Resolution No.
7557
Resolution No.
7638._
Resolution No.
7689
Effective
12/06/83
Effective
01/01/98
Effective
01/01/99
Effective
07/01/00
Effective
10/01/00
Effective
01/01/01
Resolution No.
7747
Resolution No.
7841
Resolution No.
8294
Resolution No.
8746
Resolution No.
9054
Effective
05/01/01
Effective
10 001/01
Effective
11/ 11/03
Effective
06 001105
Effective
11/01/06
0
1
2
3
4
5
6
7
8
1�
10
11
12
13
14
15
lEv
17
18
19
20
21
RESOLUTION NO. 9742
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
VERNON APPROVING AND RATIFYING THE EXECUTION OF AN
AMENDMENT TO GRANT DEED RELATING TO THE SALE OF
PROPERTY LOCATED AT 5001 S. SOTO STREET TO DP
VERNON, LLC
WHEREAS, on February 20, 2007, the City Council of the City
of Vernon adopted Resolution No. 9244 approving a Standard Offer,
Agreement and Escrow Instructions for Purchase of Real Estate and
Addendum (the "Agreement"), with DP Vernon, LLC ("DP Vernon") for the
sale of property located at 5001 S. Soto Street in the City of Vernon
(the "Property"); and
WHEREAS, by Instrument No. 20072447887 recorded on
(October 20, 2007, the City of'Vernon granted DP Vernon the Property;
Iand
WHEREAS, the City and DP Vernon desire to increase the
period of time to construct the first building on the Property to
July 30, 2009 and to construct the last building on the Property to
October 30, 2009; and
WHEREAS, in order to implement the desired changes, the City
and DP Vernon need to amend the Grant Deed recorded on October 20,
22 2007; and
23
24
25
26
27
28
WHEREAS, in order to meet the urgent need to perform all
actions necessary to implement the sale of the Property, the Mayor
Pro-Tem executed the Amendment to Grant Deed, subject to ratification
by the City; and
WHEREAS, the City desires to approve and ratify the actions
of the Mayor Pro-Tem in executing the Amendment to Grant Deed to
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
complete the sale of the Property under the terms and conditions of
the Agreement.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF VERNON AS FOLLOWS:
SECTION 1: The City Council of the City of Vernon hereby
finds and determines that the recitals contained hereinabove are true
and correct.
SECTION 2: The City Council of the City of Vernon hereby
approves the Amendment to Grant Deed with DP Vernon and ratifies the
execution of the Amendment by the Mayor Pro-Tem, a copy of which is
attached hereto as Exhibit A and incorporated by reference.
SECTION 3: The City Council of the City of Vernon hereby
authorizes the City Administrator, or his designee, to take any and
all actions deemed necessary and to executeany and all documents as
shall be required pursuant to the terms of the Agreement, as amended
to complete the sale of the Property.
SECTION 4: The City Clerk of the City of Vernon shall
certify to the passage of this resolution, and thereupon and
thereafter the same shall be"in full force and effect.
APPROVED AND ADOPTED this 20th day of October, 2008.
Name: Leonis . Ma burg
Title: Mayor / +Ia-y^r Dr.-.-TeF
ATT ST:
MAN ELA GIRON, Clerk
- 2 -
1 STATE OF CALIFORNIA )
2 ) ss
COUNTY OF LOS ANGELES )
3
4 I, MANUELA GIRON, City Clerk of the City of Vernon, do hereby
5 certify that the foregoing Resolution, being Resolution No. 9742, was
6 duly adopted by the City Council of the City of Vernon at a regular
7 meeting of the City Council duly held on Monday, October 20, 2008, and
8 thereafter was duly signed by the Mayor or Mayor Pro-Tem of the City of
9 Vernon.
10
11
12 MANUELA G ON City Clerk
13 (SEAL)
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
- 3 -
EXHIBIT A
RECORDING REQUESTED BY AND
WHEN RECORDED MAIL THIS DOCUMENT
AND TAX STATEMENTS TO:
DP Vernon, LLC
818 W. 7`h Street, Suite 410
Los Angeles, CA 90017
THE SPACE ABOVE IS FOR RECORDER'S USE
AMENDMENT TO GRANT DEED
APN: 6308-002-008; 6308-002-902 (formerly 6308-002-901)
Escrow No.: 229642-TD
Title No.: 6018973-62
DOCUMENTARY TRANSFER TAX IS NOT APPLICABLE; THIS IS NOT A TRANSFER OF
PROPERTY AND IS BEING RECORDED MERELY TO AMEND CERTAIN TERMS OF THE
GRANT DEED RECORDED ON OCTOBER 30, 2007.
By Instrument No. 20072447887, recorded on October 30, 2007, the City of Vernon, a body
corporate and politic (the "Grantor") granted to DP Vernon, LLC, a California limited liability
company (the "Grantee") 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
5001 S. Soto Street, City of Vernon, State of California, 90058.
The foregoing grant of Property was subject to certain conditions, including the following:
"(2) The first building to be constructed on the Property will be fully developed as a Data Center
within nine (9) months following the date of recordation of this Grant Deed, and the last building
required to achieve the minimum 100,000 square feet described above will be developed as a
Data Center within twelve (12) months following the date of recordation of this Grant Deed, and
in accordance with the location description set forth in the Site Plan, subject to a day for day
delay if there is an occurrence of an event beyond the reasonable control of Grantee ("Force
Majeure Event") (provided, however, that lack of funds or failure to apply for permits on a
timely basis or to comply with City of Vernon requirements in connection with obtaining
01910/0006 179835.1
permits, or failure to deliver plans that are in compliance with this Grant Deed shall not
constitute a Force Majeure Event, and provided, further, that work shall commence again as soon
as possible following the Force Majeure Event);"
In order to increase the period of time to construct the first building from nine (9) months to July 30,
2009 and to construct the last building to achieve the minimum 100,000 square feet from twelve (12)
months to October 30, 2009, the Grant Deed is hereby amended to delete the above paragraph and
to substitute in its place the following paragraph:
"(2) The first building to be constructed on the Property will be fully developed as a Data Center
by July 30, 2009, and the last building required to achieve the minimum 100,000 square feet
described above will be developed as a Data Center by October 30, 2009 of this Grant Deed, and
in accordance with the location description set forth in the Site Plan, subject to a day for day
delay if there is an occurrence of an event beyond the reasonable control of Grantee ("Force
Majeure Event") (provided, however, that lack of funds or failure to apply for permits on a
timely basis or to comply with City of Vernon requirements in connection with obtaining
permits, or failure to deliver plans that are in compliance with this Grant Deed shall not
constitute a Force Majeure Event, and provided, further, that work shall commence again as soon
as possible following the Force Majeure Event);"
Dated: October q , 2008-
Grantor:
The City of Vernon
By:,1'-4�-
Hilario Gonzales, Mayor Pro-Tem
Approved as to Form:
By:
. Qwa sz__
f A. arrison, City Attorney
Grantee:
DP VERNON, LLC, a California limited liability
company
By:
Eric M. Bender, Vice President and Treasurer
2
01910/0006 179835.1
EXHIBIT A TO
AMENDMENT TO GRANT DEED
LEGAL DESCRIPTION
LOT 5 OF TRACT NO.6452, IN THE CITY OF VERNON, COUNTY OF LOS ANGELES, STATE OF
CALIFORNIA, AS PER MAP RECORDED IN BOOK 94 PAGES 77 AND 78 OF MAPS, IN THE
OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
EXCEPTING AND RESERVING TO GRANTOR THAT PORTION OF 50TH STREET (WHICH WAS
ALSO KNOWN AS LOT 6) THAT WAS ADDED TO LOT 5 AS A RESULT OF THE VACATION OF
50TH STREET (IN RESOLUTION 8986 OF THE CITY OF VERNON), RECORDED DUNE 29, 2006
AS INSTRUMENT NO. 06-1438214 IN THE OFFICE OF THE COUNTY RECORDER OF SAID
COUNTY.
3
01910/0006 179835.1
STATE OF CALIFORNIA)
COUNTY OF LOS ANGELES)
A,
Y
)SS.
20 e�? BEFORE ME,
A NOTARY
WHO PROVED
TO ME ON THE BASI"F SATISFACTORY EVIDENCE TO BE THE PERSON WHOSE
NAME IS SUBSCRIBED TO THE WITHIN INSTRUMENT AND ACKNOWLEDGED TO
ME THAT HE EXECUTED THE SAME IN HIS AUTHORIZED CAPACITY, AND THAT
BY HIS SIGNATURE ON THE INSTRUMENT, THE PERSON, OR THE ENTITY UPON
BEHALF OF WHICH THE PERSON ACTED, EXECUTED THE INSTRUMENT.
I CERTIFY UNDER PENALTY OF PERJURY UNDER THE LAWS OF THE STATE OF
CALIFORNIA THAT THE FOREGOING PARAGRAPH IS TRUE AND CORRECT.
WITN S MY HAND AND OFFICIAL SEAL.
(No - y Sig ure)
0--
(NOTARY SEAL)
4
01910/0006 179835.1
M,�
COnon # 1654907
camofft
to 41111'1 et Counfy *,MY Cwn- Exp WApr 18, 201
STATE OF CALIFORNIA)
)SS.
COUNTY OF LOS ANGELES)
ON , 20 BEFORE ME,
A NOTARY
PUBLIC, PERSONALLY APPEARED
WHO PROVED
TO ME ON THE BASIS OF SATISFACTORY EVIDENCE TO BE THE PERSON WHOSE
NAME IS SUBSCRIBED TO THE WITHIN INSTRUMENT AND ACKNOWLEDGED TO
ME THAT HE EXECUTED THE SAME IN HIS AUTHORIZED CAPACITY, AND THAT
BY HIS SIGNATURE ON THE INSTRUMENT, THE PERSON, OR THE ENTITY UPON
BEHALF OF WHICH THE PERSON ACTED, EXECUTED THE INSTRUMENT.
I CERTIFY UNDER PENALTY OF PERJURY UNDER THE LAWS OF THE STATE OF
CALIFORNIA THAT THE FOREGOING PARAGRAPH IS TRUE AND CORRECT.
WITNESS MY HAND AND OFFICIAL SEAL.
(Notary Signature)
(NOTARY SEAL)
01910/0006 179835.1
CITY ATTORNEY'S OFFICE
INTER -DEPARTMENT MEMORANDUM
DATE: November 13, 2008
TO: Manuela Giron, City Clerk
FROM: Jeff A. Harrison, City Attorne
RE: 5001 Soto Street - DP Vernon, ��LLC
Dear Nelly:
Attached for your retention is the recorded Amendment to Grant Deed
with respect to the above -referenced matter.
JH:j1
Attachment - Resolution Nos. 9742 and 9244
RECORDING REQUESTED BY AND
WHEN RECORDED MAIL THIS DOCUMENT
AND TAX STATEMENTS TO:
DP Vernon, LLC
818 W. 7th Street, Suite 410
Los Angeles, CA 90017
COPY mDocument Recorded
MIX 20081881385
]fk
THE SPACE ABOVE IS FOR RECORDER'S USE
AMENDMENT TO GRANT DEED
APN: 6308-002-008; 6308-002-902 (formerly 6308-002-901)
Escrow No.: 229642-TD
Title No.: 6018973-62
DOCUMENTARY TRANSFER TAX IS NOT APPLICABLE; THIS IS NOT A TRANSFER OF
PROPERTY AND IS BEING RECORDED MERELY TO AMEND CERTAIN TERMS OF THE
GRANT DEED RECORDED ON OCTOBER 30, 2007.
By Instrument No. 20072447887, recorded on October 30, 2007, the City of Vernon, a body
corporate and politic (the "Grantor") granted to DP<Vernon, LLC, a California limited liability
company (the "Grantee") 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
5001 S. Soto Street, City of Vernon, State of California, 90058.
The foregoing grant of Property was subject to certain conditions, including the following:
"(2) The first building to be constructed on the Property will be fully developed as a Data Center
within nine (9) months following the date of recordation of this Grant Deed, and the last building
required to achieve the minimum 100,000_square feet described above will be developed as a
Data Center within twelve (12) months following the date of recordation of this Grant Deed, and
in accordance with the location description set forth in the Site Plan, subject to a day for day
delay if there is an occurrence of an event beyond the reasonable control of Grantee ("Force
Majeure Event") (provided, however, that lack of funds or failure to apply for permits on a
timely -basis or to comply with City of Vernon requirements in connection with obtaining
1
01910/0006 179835.1
permits, or failure to deliver plans that are in compliance with this Grant Deed shall not
constitute a Force Majeure Event, and provided, further, that work shall commence again as soon
as possible following the Force Majeure Event);"
In order to increase the period of time to construct the first building from nine (9) months to July 30,
2009 and to construct the last building to achieve the minimum 100,000 square feet from twelve (12)
months to October 30, 2009, the Grant Deed is hereby amended to delete the above paragraph and.
to substitute in its place the following paragraph:
"(2) The first building to be constructed on the Property will be fully developed as a Data Center
by July 30, 2009, and the last building required to achieve the minimum 100,000 square feet
described above will be developed as a Data Center by October 30, 2009 of this Grant Deed, and
in accordance with the location description set forth in the Site Plan, subject to a day for day
delay if there is an occurrence of an event beyond the reasonable control of Grantee ("Force
Majeure Event") (provided, however, that lack of funds or failure to apply for permits on a
timely basis or to comply with City of Vernon requirements in connection with obtaining
permits, or failure to deliver plans that are in compliance with this Grant Deed shall not
constitute a Force Majeure Event, and provided, further, that work shall commence again as soon
as possible following the Force Majeure Event);"
Dated: October 9 , 2008
Grantor:
The City of Vernon
By:
Hilario Gonzales, Mayor Pro-Tem.
Approved as to Form:
By:
f A. ar6son, City Attorney
Grantee:
DP VERNON, LLC, a California limited liability
company
By:
Eric M. Bender, Vice President and Treasurer
2
01910/0006 179835.1
EXHIBIT A TO
AMENDMENT TO GRANT DEED
LEGAL DESCRIPTION
LOT 5 OF TRACT NO. 6452, IN THE CITY OF VERNON, COUNTY OF LOS ANGELES, STATE OF
CALIFORNIA, AS PER MAP RECORDED IN BOOK 94 PAGES 77 AND 78 OF MAPS, IN THE
OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
EXCEPTING AND RESERVING TO GRANTOR THAT PORTION OF 50TH STREET (WHICH WAS
ALSO KNOWN AS LOT 6) THAT WAS ADDED TO LOT 5 AS A RESULT OF THE VACATION OF
50TH STREET (IN RESOLUTION 8986 OF THE CITY OF VERNON), RECORDED JUNE 29, 2006
AS INSTRUMENT NO. 06-1438214 IN TIC OFFICE OF THE COUNTY RECORDER OF SAID
COUNTY.
3
01910/0006 1798M.1
STATE OF CALIFORNIA)
)SS.
COUNTY OF LOS ANGELES)
ON &eA 20 BEFORE ME,
A NOTARY
PUIC, RSO LLY A EARED
WHO PROVED
TO ME ON TH BASI F SATISFACTORY EVIDENCE TO BE THE PERSON WHOSE
NAME IS SUBSCRIBED TO THE WITHIN INSTRUMENT AND ACKNOWLEDGED TO
ME THAT HE EXECUTED THE SAME IN, HIS AUTHORIZED CAPACITY, AND THAT
BY HIS SIGNATURE ON THE INSTRUMENT, THE PERSON, OR THE ENTITY UPON
BEHALF OF WHICH THE PERSON ACTED, EXECUTED THE INSTRUMENT.
I CERTIFY UNDER PENALTY OF PERJURY UNDER THE LAWS OF THE STATE OF
CALIFORNIA THAT THE FOREGOING PARAGRAPH IS TRUE AND CORRECT.
;WIZTNS MY HAND AND OFFICIAL SEAL.
mvuuo -
C rm**m # 1654907
Natoy,PWft - Cafanb
(Nokary Sig e) ux County
my Comm. EX" Apt 18, 201
(NOTARY SEAL)
4
01910/0006 179835.1
STATE OF CALIFORNIA)
)SS.
COUNTY OF LOS ANGELES)
ON D bG K ova 20 D % BEFORE ME,
ynct r G tck. � E r ( l , A NOTARY
PUBLIC, PERSONALLY APPEARED
F-7 rc- M . — ended . , WHO PROVED
TO ME ON THE BASIS OF SATISFACTORY EVIDENCE TO BE THE PERSON WHOSE
NAME IS SUBSCRIBED TO THE WITHIN INSTRUMENT AND ACKNOWLEDGED TO
ME THAT HE EXECUTED THE SAME IN HIS AUTHORIZED CAPACITY, AND THAT
BY HIS SIGNATURE ON THE INSTRUMENT, THE PERSON, OR THE ENTITY UPON
BEHALF OF WHICH THE PERSON ACTED, EXECUTED THE INSTRUMENT.
I CERTIFY UNDER PENALTY OF PERJURY UNDER THE LAWS OF THE STATE OF
CALIFORNIA THAT THE FOREGOING PARAGRAPH IS TRUE AND CORRECT.
WITNESS MY HAND AND OFFICIAL SEAL.
4gfnmbal0n # 155759
(Notary Signature) H6knV PUl bk .- ccbtoir�c
los MgeW gointy.
q.VMV IN*" AMA ?oo.4
(NOTARY SEAL)
5
01910/0006 179835.1
2
3
4
5
6
7
0
10
11
12
13
14
15
16
17�
18
19
20
21
22
23
24
25
26
27
28
RESOLUTION NO. 9742
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
VERNON APPROVING AND RATIFYING THE EXECUTION OF AN
AMENDMENT TO GRANT DEED RELATING TO THE SALE OF
PROPERTY LOCATED AT 5001 S. SOTO STREET TO DP
VERNON, LLC
WHEREAS, on February 20, 2007, the City Council of the City
of Vernon adopted Resolution No. 9244 approving a Standard Offer,
Agreement and Escrow Instructions for Purchase of Real Estate and
Addendum (the "Agreement"), with DP Vernon, LLC ("DP Vernon") for the
sale of property located at 5001 S. Soto Street in the City of Vernon
(the "Property"); and
WHEREAS, by Instrument No. 20072447887 recorded on
(October 20, 2007, the City of Vernon granted DP Vernon the Property;
land
WHEREAS, the City and DP Vernon desire to increase the
period of time to construct the first building on the Property to
July 30, 2009 and to construct the last building on the Property to
October 30, 2009; and
WHEREAS, in order to implement the desired changes, the City
and DP Vernon need to amend the Grant Deed recorded on October 20,
2007; and
'WHEREAS, in order to meet the urgent need to perform all
actions necessary to implement the sale of the Property, the Mayor
Pro-Tem executed the Amendment to Grant Deed, subject to ratification
by the City; and
WHEREAS, the City desires to approve and ratify the actions
of the Mayor Pro-Tem in executing the Amendment to Grant Deed to
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
complete the sale of the Property under the terms and conditions of
the Agreement.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF VERNON AS FOLLOWS:
SECTION 1: The City Council of the City of Vernon hereby
finds and determines that the recitals contained hereinabove are true
and correct.
SECTION 2: The City Council of the City of Vernon hereby
approves the Amendment to Grant Deed with DP Vernon and ratifies the
execution of the Amendment by the Mayor Pro-Tem, a copy of which is
attached hereto as Exhibit A and incorporated by reference.
SECTION 3: The City Council of the City of Vernon hereby
authorizes the City Administrator, or his designee, to take any and
all actions deemed necessary and to execute any and all documents as
shall be required pursuant to the terms of the Agreement, as amended
to complete the sale of the Property.
SECTION 4: The City Clerk of the City of Vernon shall
certify to the passage of this resolution, and thereupon and
thereafter the same shall be in full force and effect.
APPROVED AND ADOPTED this 20th day of October, 2008.
Name: Leonis Ma burg
Title: Mayor / *a-y�'Tem
ATT,)EILA�GIRON,
ST :
MAN Clerk
- 2 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
STATE OF CALIFORNIA )
) ss
COUNTY OF LOS ANGELES )
I, MANUELA GIRON, City Clerk of the City of Vernon, do hereby
certify that the foregoing Resolution, being Resolution No. 9742, was
duly adopted by the City Council of the City of Vernon at a regular
meeting of the City Council duly held on Monday, October 20, 2008, and
thereafter was duly signed by the Mayor or Mayor Pro-Tem of the City of
Vernon.
(SEAL)
MANUELA G 4� --
ON City Clerk
- 3 -
EXHIBIT A
RECORDING REQUESTED BY AND
WHEN RECORDED MAIL THIS DOCUMENT
AND TAX STATEMENTS TO:
DP Vernon, LLC
818 W. 7`h Street, Suite 410
Los Angeles, CA 90017
THE SPACE ABOVE IS FOR RECORDER'S USE
AMENDMENT TO GRANT DEED
APN: 6308-002-008; 6308-002-902 (formerly 6308-002-901)
Escrow No.: 229642-TD
Title No.: 6018973-62
DOCUMENTARY TRANSFER TAX IS NOT APPLICABLE; THIS IS NOT A TRANSFER OF
PROPERTY AND IS BEING RECORDED MERELY TO AMEND CERTAIN TERMS OF THE
GRANT DEED RECORDED ON OCTOBER 30, 2007.
By Instrument No. 20072447887, recorded on October 30, 2007, the City of Vernon, a body
corporate and politic (the "Grantor") granted to DP Vernon, LLC, a California limited liability
company (the "Grantee") 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
5001 S. Soto Street, City of Vernon, State of California, 90058.
The foregoing grant of Property was subject to certain conditions, including the following:
"(2) The first building to be constructed on the Property will be fully developed as a Data Center
within nine (9) months following the date of recordation of this Grant Deed, and the last building
required to achieve the minimum 100,000 square feet described above will be developed as a
Data Center within twelve (12) months following the date of recordation of this Grant Deed, and
in accordance with the location description set forth in the Site Plan, subject to a day for day
delay if there is an occurrence of an event beyond the reasonable control of Grantee ("Force
Majeure Event") (provided, however, that lack of funds or failure to apply for permits on a
timely basis or to comply. with City of Vernon requirements in connection with obtaining
01910/0006 179835.1
permits, or failure to deliver plans that are in compliance with this Grant Deed shall not
constitute a Force Majeure Event, and provided, further, that work shall commence again as soon
as possible following the Force Majeure Event);"
In order to increase the period of time to construct the first building from nine (9) months to July 30,
2009 and to construct the last building to achieve the minimum 100,000 square feet from twelve (12)
months to October 30, 2009, the Grant Deed is hereby amended to delete the above paragraph and
to substitute in its place the following paragraph:
"(2) The first building to be constructed on the Property will be fully developed as a Data Center
by July 30, 2009, and the last building required to achieve the minimum 100,000 square feet
described above will be developed as a Data Center by October 30, 2009 of this Grant Deed, and
in accordance with the location description set forth in the Site Plan, subject to a day for day
delay if there is an occurrence of an event beyond the reasonable control of Grantee ("Force
Maj eure Event") (provided, however, that lack of funds or failure to apply for permits on a
timely basis or to comply with City of Vernon requirements in connection with obtaining
permits, or failure to deliver plans that are in compliance with this Grant Deed shall not
constitute a Force Majeure Event, and provided, further, that work shall commence again as soon
as possible following the Force Majeure Event);"
Dated: October q , 2008
Grantor:
The City of Vernon
By: � ° ,/J
Hilario Gonzales, Mayor Pro-Tem
Approved as to Form:
By:
QhaS7,—
/F A. arrison, City Attorney
Grantee:
DP VERNON, LLC, a California limited liability
company
By:
Eric M. Bender, Vice President and Treasurer
2
01910/0006 179835.1
EXHIBIT A TO
AMENDMENT TO GRANT DEED
LEGAL DESCRIPTION
LOT 5 OF TRACT NO.6452, IN THE CITY OF VERNON, COUNTY OF LOS ANGELES, STATE OF
CALIFORNIA, AS PER MAP RECORDED IN BOOK 94 PAGES 77 AND 78 OF MAPS, IN THE
OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
EXCEPTING AND RESERVING TO GRANTOR THAT PORTION OF 50TH STREET (WHICH WAS
ALSO KNOWN AS LOT 6) THAT WAS ADDED TO LOT 5 AS A RESULT OF THE VACATION OF
50TH STREET (IN RESOLUTION 8986 OF THE CITY OF VERNON), RECORDED DUNE 29, 2006
AS INSTRUMENT NO. 06-1438214 IN THE OFFICE OF THE COUNTY RECORDER OF SAID
COUNTY.
3
01910/0006 179835.1
STATE OF CALIFORNIA)
)SS.
COUNTY OF LOS ANGELES)
ME
20 BEFORE ME,
A NOTARY
PUBLIC, PERSONALLY AMEARED
, WHO PROVED
TO ME ON THE BASIChF SATISFACTORY EVIDENCE TO BE THE PERSON WHOSE
NAME IS SUBSCRIBED TO THE WITHIN INSTRUMENT AND ACKNOWLEDGED TO
ME THAT HE EXECUTED THE SAME IN HIS AUTHORIZED CAPACITY, AND THAT
BY HIS SIGNATURE ON THE INSTRUMENT, THE PERSON, OR THE ENTITY UPON
BEHALF OF WHICH THE PERSON ACTED, EXECUTED THE INSTRUMENT.
I CERTIFY UNDER PENALTY OF PERJURY UNDER THE LAWS OF THE STATE OF
CALIFORNIA THAT THE FOREGOING PARAGRAPH IS TRUE AND CORRECT.
;WIT;NS MY HAND AND OFFICIAL SEAL.
ig e)
(NOTARY SEAL)
4
01910/0006 179835.1
mar m uwtuo
n # 14 17
Y Comm. E>�1reaApt i �, 20I
STATE OF CALIFORNIA)
)SS.
COUNTY OF LOS ANGELES)
5 32
PUBLIC, PERSONALLY APPEARED
20 BEFORE ME,
A NOTARY
, WHO PROVED
TO ME ON THE BASIS OF SATISFACTORY EVIDENCE TO BE THE PERSON WHOSE
NAME IS SUBSCRIBED TO THE WITHIN INSTRUMENT AND ACKNOWLEDGED TO
ME THAT HE EXECUTED THE SAME IN HIS AUTHORIZED CAPACITY, AND THAT
BY HIS SIGNATURE ON THE INSTRUMENT, THE PERSON, OR THE ENTITY UPON
BEHALF OF WHICH THE PERSON ACTED, EXECUTED THE INSTRUMENT.
I CERTIFY UNDER PENALTY OF PERJURY UNDER THE LAWS OF THE STATE OF
CALIFORNIA THAT THE FOREGOING PARAGRAPH IS TRUE AND CORRECT.
WITNESS MY HAND AND OFFICIAL SEAL.
(Notary Signature)
(NOTARY SEAL)
5
01910/0006 179835.1
1 RESOLUTION NO. 9977
2
3 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
VERNON APPROVING AND AUTHORIZING THE EXECUTION OF A
4 SECOND AMENDMENT TO GRANT DEED RELATING TO THE SALE
5 OF PROPERTY LOCATED AT 5001 S. SOTO STREET TO DP
VERNON, LLC
6
7 WHEREAS, on February 20, 2007, the City Council of the City
8 of Vernon adopted Resolution No. 9244 approving a Standard Offer,
9 Agreement and Escrow Instructions for Purchase of Real Estate and
10 Addendum, with DP Vernon, LLC ("DP Vernon") for the sale of property
11 located at.5001 S. Soto Street in the City of Vernon (the "Property");
12 and
13 WHEREAS, by Instrument No. 20072447887 recorded on
14 October 20, 2007, the City of Vernon granted DP Vernon the Property;
15 and
16 WHEREAS, on October 20, 2008, the City Council of the City
17 of Vernon adopted Resolution No. 9742 approving an Amendment to Grant
18 Deed to increase the period of time for DP Vernon to construct the
19 first building on the Property to July 30, 2009 and to construct the
20 last building on the Property to October 30, 2009; and
21 WHEREAS, the City and DP Vernon desire to increase the
22 period of time to construct the first building on the Property to
23 July 30, 2012 and to construct the last building on the Property to
24 October 30, 2012; and
25 WHEREAS, in, order to implement the desired changes, the City
26 and DP Vernon need to amend the Grant Deed recorded on October 20,
27 2007 (the "Grant Deed"); and
28 WHEREAS, by memo dated May 28, 2009, the City Attorney has
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
recommended the execution of an amended Grant Deed to extend the
period of time to construct the first and last buildings on the.
Property.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF VERNON AS FOLLOWS:
SECTION 1: The City Council of the City of'Vernon hereby
finds and determines that the recitals contained hereinabove are true
and correct.
SECTION 2: The City Council of the City of Vernon hereby
approves the Second Amendment to Grant Deed with DP Vernon, in
substantially the same form as the copy which is attached hereto as
Exhibit A and incorporated by reference.
SECTION 3: The City Council of the City of Vernon hereby
authorizes the Mayor or Mayor Pro-Tem to execute said Deed for, and on
behalf of, the City of Vernon and the City Clerk, or Deputy City
Clerk, is hereby authorized to attest thereto.
SECTION 4: The City Council of the City of Vernon hereby
authorizes the City Administrator, or his designee, to make whatever
nonsubstantive, administrative and/or text changes, upon advice of
counsel, to the Deed.
SECTION 5: The City Council of the City of Vernon hereby
authorizes, the City Administrator, or his designee, to take any and
all actions deemed necessary and to execute any and all documents as
shall be required pursuant to the terms of .the Grant Deed, as amended,
to implement the sale of the Property.
///
///
- 2 -
1 SECTION 6: The City Clerk of the City of Vernon shall
2 certify to -the passage of this resolution, and thereupon and
3 thereafter the same shall be in full force and effect.
4 APPROVED AND ADOPTED this 8th day of June, 2009.
6 Name: Hilario Gonzales
7
Title: Mayor / ayor ro-Tem
9 ATTEST:
10
11 M NUELA GIRON, qity Clerk
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
3 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
STATE OF CALIFORNIA _)
ss
COUNTY OF LOS ANGELES )
I, MANUELA GIRON, City Clerk of the City of Vernon, do hereby
certify that the foregoing Resolution, being Resolution No. 9977, was
duly adopted by the City Council of the City of Vernon at a regular
meeting of the City Council duly held on Monday, June 8, 2009, and
thereafter was duly signed by the Mayor or Mayor Pro-Tem of the City of
Vernon.
(SEAL)
MANUELA GIRO City Clerk
- 4 --
EXHIBIT A
RECORDING REQUESTED BY
AND WHEN RECORDED RETURN TO:
DP Vernon, LLC
818 W. 7t' Street, Suite 410
Los Angeles, CA 90017
ABOVE THIS LINE FOR RECORDER'
SECOND AMENDMENT TO GRANT DEED
APN: 6308-002-008; 6308-002-902 (formerly 6308-002.-901)
Escrow No.: 229642-TD
Title No.: 6018973-62
DOCUMENTARY TRANSFER TAX IS NOT APPLICABLE; THIS IS NOT A TRANSFER -
OF PROPERTY AND IS BEING RECORDED MERELY TO AMEND CERTAIN TERMS OF
THE GRANT DEED RECORDED ON OCTOBER 30, 2007 AS DOCUMENT NO.
20072447887 AS AMENDED BY AMENDMENT TO GRANT DEED RECORDED ON
OCTOBER 22, 2008 AS DOCUMENT NO.20081881385.
By.Instrument No. 20072447887, recorded on October 30, 2007, the City of Vernon, a body
corporate and politic (the "Grantor") granted to DP Vernon, LLC, a California limited liability
company .(the "Grantee"), certain real property located in the City of Vernon, County of Los
Angeles, State of California. As a matter of information, the description of such real property
was modified as a result of Grantee granting to Grantor, and Grantee accepting such grant, the
Northerly 5 feet of Lot 5 of Tract No. 6452, The City of Vernon, County of Los Angeles, State
of California, as per map recorded in Book 94, pages 77 and 78 of Maps in the Official Records
of the County of Los Angeles ("Reconveyance Deed").
Such real property, as affected by the Reconveyance Deed, is described in the legal description
attached hereto and made a part hereof as Exhibit "A." Commonly known as 5001 S. Soto
Street, City of Vernon, State of California 90058 and known herein as the "Property."
The foregoing grant of Property was, pursuant to the above described Grant Deed and
Amendment to Grant Deed; subject. to certain conditions, including the following:
"(2) The first building to be constructed on the Property will be fully developed
as a Data Center by July 30, 2009, and the last building required to achieve the
minimum 100,000 square feet described above will be developed as a Data Center
by October 30, 2009, and in accordance with the location description set forth in
the Site Plan, subject to a day for day'delay if there is an occurrence of an'event
beyond the reasonable control of Grantee ("Force Majeure Event") (provided,
LA_IMAN_372581_1 (4) (3) 1..
however, that lack of funds or failure to apply for permits on a timely basis or to
comply with the City of Vernon requirements in connection with obtaining
permits, or failure to deliver plans that are in compliance with this Grant Deed
shall not constitute a Force Majeure Event, and provided, further, that work shall
commence again as soon as possible following the Force Majeure Event);"
In order to increase the period of time to construct the first building from July 30, 2009 to
July 30, 2012 and to construct the last building to achieve the minimum 100,000 square feet from
twelve (12) months from July 30, 2009 to October 30, 2012, the Grant Deed and the Amendment
to Grant Deed are hereby amended to delete the above paragraph and to substitute in its place the
following paragraph:
"(2) The first building to be constructed on the Property will be fully developed
as a Data Center by July 30, 2012, and the last building required to achieve the
minimum 100,000 square feet described above will be developed as a Data Center
by October 30, 2012, and in accordance with the location description set forth in
the Site Plan, subject to a day for day delay if there is an occurrence of an event
beyond the reasonable control of Grantee ("Force Majeure Event") (provided,
however, that lack of funds or failure to apply for permits on a timely basis or to
comply with the City of Vernon requirements in connection with obtaining
permits, or failure to deliver plans that are in compliance with this Grant Deed
shall not constitute a Force Majeure Event, and provided, further, that work shall
commence again as soon as possible following the Force Majeure Event);"
Dated: May—, 2009
GRANTOR:
THE CITY OF VERNON
By:
Hilario Gonzales, Mayor
Approved as to Form:
Jeff A. Harrison, City Attorney
GRANTEE: .
DP VERNON, LLC, a California limited liability
company
Eric M. Bender, Vice President and
Treasurer
LA_IMAN_372591_1 (4) (3) 2•
EXHIBIT A TO
AMENDMENT TO GRANT DEED
LEGAL DESCRIPTION
LOT 5 OF TRACT NO. 6452, IN THE CITY OF VERNON, COUNTY OF LOS ANGELES,
STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 94 PAGES 77 AND 78 'OF
MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY EXCEPT AND
EXCLUDING THE NORTHERLY 5 FEET OF SAID LOT 5 OF TRACT NO. 6452, THE,
CITY OF VERNON, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER
MAP - RECORDED IN BOOK 94, PAGES 77 AND 78 OF MAPS IN THE OFFICIAL
RECORDS OF THE COUNTY OF LOS ANGELES.
EXCEPTING AND RESERVING TO GRANTOR THAT PORTION OF 50T STREET
(WHICH WAS ALSO KNOWN AS LOT 6) THAT WAS ADDED TO LOT 5 AS A RESULT
OF THE VACATION OF 50T STREET (IN RESOLUTION 8986 OF THE CITY OF
VERNON), RECORDED JUNE 29, 2006 AS INSTRUMENT NO. 06-1438214 IN THE
OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
LA_TMAN_372581_1 (4) (3) 3
On before me, a notary
public, personally appeared , who proved to
me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to
the within instrument and acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the
person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
(AFFIX. NOTARIAL SEAL)
NOTARY PUBLIC
LA_IMAN_372581_I (4) (3) 4.
On before me, , a notary
public, personally appeared , who proved to
me on the basis of satisfactory evidence to be the person(s) whose name(s) is/aresubscribed to
the within instrument and acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the
person(s), or the entity upon behalf of which the person(s) acted, executed the instrument:
I certify under PENALTY OF PERJURY under the laws of the State of California that the'
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
(AFFIX NOTARIAL SEAL)
NOTARY PUBLIC
LA_IMAN_372581_1 (4) (3) 5.