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Resolution No. 9439
1 2 3 4 5 6 7 8 9 10 11 12 13 14. 15 16 17 18 19 20 21 22 23 24 25 26 27 28 RESOLUTION NO. 9439 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF VERNON APPROVING AND AUTHORIZING THE EXECUTION OF AN AGREEMENT FOR PURCHASE AND SALE OF REAL PROPERTY BY AND BETWEEN THE CITY OF VERNON AND SMURFIT-STONE CONTAINER ENTERPRISES, INC. FOR PROPERTY LOCATED AT 2200 E. 5 5TH STREET AND 2001 E. 5 7TH STREET IN THE CITY OF VERNON WHEREAS, the City of Vernon desires to buy certain real property in the City consisting of approximately 11.07 acres consisting of multiple industrial warehouse facilities of various sizes located at 2200 E. 55th Street and 2001 E. 57th Street in the City of Vernon consisting of two parcels (the "Property") for approximately $17,250,000.00 for future development; and WHEREAS, the City has agreed to buy the Property from Smurfit -Stone Container Enterprises, Inc ("Smurfit") on negotiated terms, which the City has determined to be fair and reasonable; and WHEREAS, City staff have recommended that the Property be purchased and the necessary documents executed to implement the purchase. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF VERNON AS FOLLOWS: SECTION 1: The City Council of the City of Vernon hereby finds and determines that the recitals contained hereinabove are true and correct. SECTION 2: The City Council of the City of Vernon hereby approves the Agreement for Purchase and Sale of Real Property with Smurfit, in substantially the same form as the copy which is attached hereto as Exhibit A and incorporated by reference. 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 SECTION 3: The City Council of the City of Vernon hereby authorizes the Mayor or Mayor Pro-Tem to execute the Agreement with Smurfit for, and on behalf of, the City of Vernon and the City Clerk lis hereby authorized to attest thereto. SECTION 4: The City Council of the City of Vernon hereby directs the City Clerk, or her designee, to give one fully executed jAgreement to: Troy.& Gould Attn. Charles L. Woltmann, Esq. 1801 Century Park East, Floor 16 Los Angeles, CA 90071-2301 SECTION 5: 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 Agreement. SECTION 6: The City Council of the City of Vernon hereby authorizes the City Administrator, or his designee, to execute any and all documents as shall be required to complete the purchase of the Property and to accomplish the close of escrow consistent with the terms of said Agreement approved herein. SECTION 7: 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 15th day of October, 2007. Leonis C. Malburg Name: Title: Mayor / A TEST: MANUELA GIRON, gity 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. 9439, 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 15, 2007, and 8 thereafter was duly signed by the Mayor or Mayor Pro-Tem of the City of 9 Vernon. 10 &AN11 � UELA GIR'ON,lCity Clerk 12 13 (SEAL) 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 - 3 - EXHIBIT A AGREEMENT FOR PURCHASE AND SALE OF REAL PROPERTY THIS AGREEMENT is made and entered into (for identification purposes only) as of this 7th day of October, 2007, BETWEEN SMURFIT-STONE CONTAINER ENTERPRISES, INC., a Delaware corporation ("Seller"), of the one part AND CITY OF VERNON, a public body corporate and politic, or its assignee ("Buyer"), of the other part, NOW THEREFORE, in consideration of their mutual promises, covenants, representations, and warranties herein, the Buyer and Seller agree as follows: 1. Sale and Purchase; Escrow. Seller agrees to sell to Buyer, and Buyer agrees to purchase from Seller, on the terms and conditions hereinafter set forth, that certain real property, commonly known as 2200 E. 55th Street and 2001 E. 57th Street, Vernon, California (APNs: 6308-017-009 and 6308-017-015), including all rights, privileges and easements relating to, used in connection with, or appurtenant to, the Property, including, without limitation, all improvements, structures and fixtures thereon, and all minerals, oil, gas, and other hydrocarbon substances on and under the Property, as well as all development rights, or other governmental authorizations, patented or unpatented mining claims, air rights, water, water rights and water stock relating to the Property and any other rights, rights -of -way, and appurtenances for the beneficial use and enjoyment of the Property (collectively, the "Property"). The purchase and sale of the Property shall be conducted through an escrow (the "Escrow") with Lawyers Title Company, c/o North American Title Company, 101 North Brand Blvd., Suite 1800, Glendale, CA 91203, attn: Ms. Tina,DeBow (Escrow Officer), phone: 818-240-4912, fax: 818-240-9884, as escrow agent ("Escrow Agent") at such address. The opening of Escrow (the "Opening of Escrow") shall occur when Escrow Agent possesses a copy or copies of this Agreement executed in counterparts or otherwise by the parties. Escrow Agent's signature below shall constitute the agreement of Escrow Agent to serve hereunder in such capacity, and Escrow Agent shall insert the date of the Opening of Escrow where indicated at the end of this Agreement. Escrow Agent shall notify the parties of the Opening of Escrow immediately by telephone, and shall promptly return to 01910/0001 163452.3 each party counterparts of this Agreement executed by the other party and Escrow Agent. The parties shall promptly execute and deliver to Escrow Agent such additional instructions, resolutions and other documents as Escrow Agent may reasonably require that are not inconsistent with or contrary to the provisions hereof. In the event of any inconsistency or conflict between said instructions and the provisions of this Agreement, this Agreement shall control. 2. Purchase Price. The purchase price for the Property shall be Seventeen Million Two Hundred Fifty Thousand Dollars ($17,250,000.00), payable as follows: (a) Within three (3) business days after the Opening of Escrow, Buyer shall deposit with Escrow Agent Two Hundred Fifty Thousand Dollars ($250,000.00) (together with any interest earned thereon, the "Initial Deposit"). Within one (1) business day after expiration of the Feasibility Period (as defined below) and provided that Buyer has not terminated this Agreement, Buyer shall deposit with Escrow Agent an additional earnest money deposit in the amount of Two Hundred Fifty Thousand Dollars ($250,000.00) (the "Additional Deposit") (collectively, the Initial Deposit and the Additional Deposit are referred to herein as the "Deposit"). The Deposit shall be applied towards the purchase price at the Close of Escrow (as defined below). The Deposit shall be invested pursuant to Buyer's written directions. The Deposit shall be held by the Escrow Agent for the mutual benefit of the parties hereto. In the event that this Agreement is not terminated pursuant to the terms of Sections 4, 5, 8 or 17 herein, the Deposit shall be nonrefundable except for the case of Seller's breach of this Agreement. In the event that Buyer terminates this Agreement pursuant to Sections 4, 5, 8 or 17 herein, the Deposit shall be returned to Buyer forthwith, and Seller shall promptly take such actions as may be necessary or appropriate to cause the Deposit to be returned. to Buyer, including, without limitation, delivering to Escrow Agent such written instructions or authorizations as Escrow Agent may request in connection with Escrow Agent's return of the Deposit to Buyer. 3. Documents and Disclosures. Within five (5) business days from the Opening of Escrow, Seller shall deliver to Buyer copies of all non -privileged material documents pertaining to the Property that are in Seller's possession, including, but not limited to, copies of surveys, environmental reports, soils reports, engineering plans and studies, title information, contracts, warranties, agreements or leases affecting the Property, and demolition bids, if any. 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 required by California law, and shall endeavor to have such report delivered to Buyer within five (5) business days after the Opening of Escrow. CADocuments and Settings\jharrison\Local Settings\Temporary Internet Files\Content.Outlook\R2ZT9WY5\LADOCS_163452_3.DOC 2 01910/0001 163452.3 4. Title. Within five (5) business days from the Opening of Escrow (as defined below), Escrow Agent shall cause the Escrow Agent, which shall also act as the title company for the purchase and sale contemplated herein (Victor Greene, title officer) (the "Title Company"), to deliver to Buyer a preliminary title report on the Property, together with legible copies of all documents referred to therein (collectively, the "Title Report"). Buyer shall have twenty (20) days from its receipt of the Title Report within which to examine the same. If Buyer finds the state of title or any title exception to be unacceptable, Buyer shall, no later than the expiration of the twenty (20) day period, notify Seller in writing specifying the same ("Objections"). If Buyer fails to give Seller written notice of Objections before the expiration of the twenty (20) day period, the state of title and the title exceptions shown in the Title Report shall be deemed permitted exceptions ("Permitted Exceptions"). If Buyer has given Seller timely written notice of Objections then, Seller may use its reasonable efforts to cause such Objections to be cured, remedied or corrected within fifteen (15) business days following receipt of such notice (the "Cure Period"); further provided, however, that Seller shall not be obligated to cure any Objections nor be required to bring suit or expend any sums of money to cure, remedy or correct Objections. At either party's option, the Cure Period for elimination of Objections shall be extended until Close of Escrow. In the event that Seller does not eliminate or resolve any Objections within the Cure Period, as the same may be extended pursuant to the preceding sentence, then Buyer shall have the option of either: (i) proceeding to Closing and accepting the title without cure of the Objections, without reduction in the purchase price and without claim against Seller therefor, or (ii) canceling this Agreement in which event Seller shall return the Deposit to Buyer, whereupon both parties shall be released from all obligations under this Agreement, except for Buyer's indemnity obligation pursuant to Section 5 herein. Notwithstanding anything to the contrary expressed or implied herein, however, Buyer shall be deemed (without further notice to Seller) to have objected to any monetary lien or encumbrance shown in the Title Report (except for any lien for nondelinquent real property taxes); no such monetary lien or exception shall be deemed a Permitted Exception; and Seller shall cause any and all such monetary liens and exceptions to be eliminated as a lien or encumbrance on title to the Property no later than the Close of Escrow. 5. Feasibility. Subject to the terms and conditions set forth herein, Buyer and Buyer's representatives shall have the right and shall be entitled to enter upon the Property, at reasonable times after the Opening of Escrow to inspect the Property and to determine the feasibility of acquiring the Property for Buyer's intended use. Buyer shall provide Seller with not less than one (1) business day prior notice of Buyer's CADocuments and Settings\jhairison\Local Settings\Temporary Internet Files\Content.Outlook\R2ZT9WY5\LADOCS_163452_3.DOC 3 01910/0001 163452.3 intent for Buyer or its representatives to enter the Property. Unless Buyer determines in its sole and absolute discretion that acquisition of the Property is feasible and delivers written notice ("Feasibility Notice") waiving this contingency to Seller and Escrow Agent on or before the date which is forty-five (45) days after the Opening of Escrow (the "Feasibility Period"), then this Agreement and the Escrow shall automatically terminate and the Deposit shall be returned to Buyer. Buyer shall indemnify, defend and hold Seller, its affiliates, and their respective officers, directors, employees and agents harmless from any liability, cost or expense arising from injuries to persons or property caused by Buyer's or Buyer's representatives' activities on the Property pursuant to this Section 5. Buyer shall be responsible for returning the Property to the condition in which it was prior to the time of any entry. Buyer's obligations pursuant to this Section 5 shall survive the expiration or earlier termination of this Agreement. Seller's representative shall have the right, but not the obligation, to be in attendance during any Phase I environmental site assessment or other environmental inspection/investigation activities. Buyer shall notify Seller of Buyer's intention to enter the Property to conduct any environmental assessment or inspection activities no less than three (3) business days prior to the proposed date of entry. At least ten (10) business days prior to any environmental examination beyond that customarily performed in a Phase I environmental site assessment, including, without limitation, any soils, groundwater or other environmental examination, inspection or test requiring invasive methods ("Invasive Testing"), Buyer shall provide Seller with a written plan describing the activities Buyer and/or its representative intend to conduct on the Property in connection with such Invasive Testing. Buyer's plan shall include, at a minimum: (i) a description of the proposed sampling locations; (ii) a description of how the samples will. be collected, and (iii) the test methods that will be used to analyze the samples. Seller reserves the right to review -and approve or disapprove and not allow, in its sole discretion, all examinations, inspections and tests to be conducted on the Property, including, without limitation, the locations of environmental samples. In the event Seller disapproves and does not allow the Invasive Testing proposed by Buyer, then either party shall have the right to terminate this Agreement and the Escrow. If this Agreement is terminated, the Deposit shall be returned to Buyer. If Seller approves the Invasive Testing proposed by Buyer, Buyer shall permit Seller, at Seller's expense, to split any samples collected by Buyer or its representatives in the course of such Invasive Testing. Buyer agrees to provide Seller copies of all data, reports, calculations or other documents or information generated in connection with Buyer's environmental inspection of the Property, including, without limitation, any Phase I Environmental Site Assessment report. All examinations, inspections, testing and related activities shall be conducted in compliance with applicable laws and regulations. In no event shall the Feasibility Period be extended as a result of Buyer's environmental due diligence. To the extent that there are obligations under any service or other contracts related to the Property that are assignable to Buyer and that Buyer agrees to assume during the Feasibility Period at and as of the Close of Escrow, Seller shall assign them to Buyer, CADocuments and Settings\jharrison\Local Settings\Temporary Internet Files\Content.Outlook\R2ZT9WY5\LADOCS_163452_3.DOC 4 01910/0001 163452.3 and Buyer shall assume them from Seller at and as of the Close of Escrow collectively, the "Assigned Property Contracts"). Buyer and its representatives shall treat all information regarding the Property as confidential (the "Confidential Information") and shall not disclose any Confidential Information to third parties without the prior written consent of Seller, unless required by law. In that connection, Seller understands that Buyer is subject to (among other laws) the California Public Records Act, and accordingly, Buyer shall be free to make such disclosures as such Act or other law (in Buyer's reasonable judgment) may require. Furthermore, nothing herein shall restrict Buyer's rights to disclose confidential information if such disclosure is (in Buyer's reasonable judgment) required in connection with Buyer's exercise of its rights and remedies hereunder in any litigation between the parties or otherwise. Buyer's obligations under this provision to maintain the confidentiality of the Confidential Information shall expire upon the earlier of the Close of Escrow, or one (1) year after any termination or expiration of this Agreement. 6. Seller Representations and Warranties. Seller represents and warrants to Buyer as follows, which representations and warranties shall be deemed renewed and remade at and as of the Close of Escrow: (a) The execution, delivery and performance of this Agreement by Seller have been duly authorized by the Board of Directors of Seller. Neither the execution of this Agreement nor the consummation of the transactions contemplated hereby will: (i) result in a breach of, or default under, any agreement to which Seller is bound, or (ii) violate any restrictions to which Seller is subject. (b) Seller has good and marketable title to, and is the record and beneficial 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. (c) Seller makes no covenant, representation or warranty as to the suitability of the Property for any purpose whatsoever or as to the physical condition of the Property, including, without limitation, the Property's environmental condition; provided, however, that Seller has no knowledge that the Property (i) is in violation of any environmental law, including, without limitation, any law that regulates or pertains to materials or substances that are, have been declared to be, hazardous to public health or safety, or (ii) contains any such materials or substances, except as set forth in Schedule 6(c) attached hereto. EXCEPT AS EXPRESSLY SET FORTH ABOVE, AND IN THE GRANT DEED, BUYER AGREES THAT IT IS ACQUIRING THE PROPERTY "AS -IS" AND "WHERE IS" CONDITION, FREE OF ANY OTHER REPRESENTATIONS OR WARRANTIES, EXPRESSED OR IMPLIED, WITH CADocuments and Settings\jharrison\Local Settings\Temporary Internet Files\Content.Outlook\R2ZT9WY5\LADOCS_163452_3.DOC 5 01910/0001 163452.3 NO REPRESENTATIONS OR WARRANTIES OF ANY KIND, EXPRESSED OR IMPLIED, EITHER ORAL OR WRITTEN, MADE BY SELLER OR ANY AGENT OR REPRESENTATIVE OF SELLER WITH RESPECT TO THE ENVIRONMENTAL, PHYSICAL OR STRUCTURAL CONDITION OF THE PROPERTY OR WITH RESPECT TO THE EXISTENCE OR ABSENCE OF PETROLEUM, HAZARDOUS SUBSTANCES OR WASTES, OR POLLUTION CONDITIONS IN, ON, UNDER OR AFFECTING THE PROPERTY OR THE GROUND WATER THEREUNDER OR WITH RESPECT TO THE COMPLIANCE OF THE PROPERTY OR ITS OPERATION WITH ANY LAWS, ORDINANCES OR REGULATIONS OF ANY GOVERNMENT OR OTHER BODY. BUYER ACKNOWLEDGES AND AGREES THAT, EXCEPT AS EXPLICITLY STATED IN THIS AGREEMENT, SELLER HAS NOT MADE AND DOES NOT MAKE ANY REPRESENTATIONS, WARRANTIES, OR COVENANTS OF ANY KIND OR CHARACTER WHATSOEVER, WHETHER EXPRESS OR IMPLIED, WITH RESPECT TO THE HABITABILITY, TENANTABILITY OR SUITABILITY FOR COMMERCIAL PURPOSES, MERCHANTABILITY, OR FITNESS OF THE PROPERTY FOR A PARTICULAR PURPOSE, ALL OF WHICH WARRANTIES SELLER HEREBY EXPRESSLY DISCLAIMS. (d) Seller is not a foreign person and is a "United States Person" as defined in Section 7001(a)(30) of the Internal Revenue Code of 1986, as amended. (e) . The purchase price constitutes all consideration due Seller for the Property, and Seller has waived and relinquished any relocation assistance to which Seller may be entitled under local, state or federal law. (f) Seller understands, and has agreed that (i) nothing in this Agreement affects or limits the City Health Department's responsibilities in the administration of local, state and federal law with respect to remediation of the Property, if such remediation is necessary; (ii) neither Buyer's relationship to the City Health Department nor anything required of Seller by the City Health Department in carrying out its responsibilities under the law, shall excuse Seller's obligations under this Agreement; and (iii) Buyer's approval of any contingency relative to the condition of the Property only includes approval by the Buyer (City of Vernon), and does not necessarily constitute approval by the City Health Department. 7. Buyer Representations and Warranties. Buyer represents and warrants to Seller as follows: (a) Buyer is a public body corporate and politic duly incorporated and existing pursuant to the laws of the State of California and authorized to do business in the State of California. CADocuments and Settings\jharrisonUTocal Settings\Temporary Internet Files\Content.Outlook\R2ZT9WY5\LADOCS_163452_3.DOC 6 01910/0001 163452.3 (b) Neither the execution of this Agreement nor the consummation of the transactions contemplated hereby (i) result in a beach of, or default under, any agreement to which Buyer is bound, or (ii) violate any restrictions to which Buyer is subject. (c) Buyer has conducted or will conduct its own due diligence and investigation with respect to the condition of the Property. Buyer acknowledges that as of Close of Escrow it shall have inspected the Property, having observed its physical characteristics and conditions, including, without limitation, subsurface conditions and solid and hazardous wastes and hazardous substances that may ' be present on, under or related to the Property. Buyer further acknowledges and agrees that except for Seller's express representations and warranties set forth in Section 6 hereof, the Property is to be sold and conveyed to, and purchased and accepted by Buyer, in its present condition, "AS IS," and, Buyer hereby assumes the risk that adverse physical and environmental characteristics and existing conditions may not have been revealed by its investigation. Except as set forth in Section 6 herein, Seller has not made any representations or warranties with respect to the Property upon which the Buyer has relied. 8. Conditions to Closing. (a) As conditions to Buyer's obligation to close: (i) all representations and warranties of Seller contained in Section 6 shall be true and accurate in all material respects as though said representations and warranties were made on and as of Close of Escrow. (ii) Seller shall have materially performed and complied with all covenants and conditions of this Agreement on Seller's part to be performed and complied with prior to or at Close of Escrow. (iii) Seller shall have implemented the "Phase II Soil Sampling Workplan Associated With Closure of Hazardous Materials Permit," which was prepared by Seller for the purpose of obtaining a Certificate of Closure for the Property pursuant to City of Vernon Ordinance 961, Article IV, Sec. 13.68 (the "Closure Certificate") and approved by the City of Vernon in September, 2007. (iv) concurrently with the Close of Escrow, the Title Company shall be prepared to issue, and shall issue to Buyer, a standard CLTA form of title insurance in the full amount of the purchase price showing title to the Property vested in Buyer and subject only to Permitted Exceptions (the "Title Policy"). (v) There shall not have been any material adverse change to the Property after the conclusion of the Feasibility Period. CADocuments and Settings\jharrison\Local Settings\Temporary Internet Files\Content.Outlook\R2ZT9WY5\LADOCS_163452_3.DOC 7 01910/0001 16452.3 (vi) Seller shall have deposited into Escrow a certificate satisfying requirements of Section 1445 of the Internal Revenue Code (the "FIRPTA Certificate"), a California Form 593-C (the "CA Form 593-C"), and any other documents that Seller is required to deposit into Escrow elsewhere hereunder. (vii) No action or proceeding shall have been commenced by or against Seller under the federal bankruptcy code or any state law for the relief of debtors or for the enforcement of the rights of creditors. Buyer, at its sole discretion, may waive any or all of the foregoing conditions. (b) As conditions to Seller's obligation to close: (i) All representations and warranties of Buyer contained in Section 7 shall be true and accurate in all respects as though said representations and warranties were made on and as of the Close of Escrow. (ii) Buyer shall have materially performed and complied with all covenants and conditions of this Agreement on Buyer's part to be performed and complied with prior to or at Close of Escrow. (iii) Buyer shall use reasonable best efforts to cooperate with Seller in obtaining the Closure Certificate for the Property. (iv) Buyer shall have delivered the purchase price to the Escrow Agent. (v) No action or proceeding shall have been commenced by or against Buyer under the federal bankruptcy code or any state law for the relief of debtors or for the enforcement of the rights of creditors. Seller, at its sole discretion, may waive any or all of the foregoing conditions. 9. Prorations. (a) All utility charges, all income and expense from the Assigned Property Contracts and all nondelinquent personal property taxes and assessments levied against the Property for the tax year" in which the Closing occurs shall be prorated between the parties at and as of the Close of Escrow. Real-estate taxes and assessments shall be prorated between Buyer and Seller at and as of the Close of Escrow based upon the most recent available information in the tax assessor's office. Seller shall be solely responsible for any and all taxes payable for any period preceding the Close of Escrow, including but not limited to any "roll back" or other taxes assessed or payable after the Close of Escrow with respect to any ownership or actions on the Property for any period prior to Closing. Escrow Holder is CADocuments and Settings\jharrison\Local Settings\Temporary Internet Files\Content.Outlook\R2ZT9WY5\LADOCS_163452_3.DOC 8 01910/0001 163452.3 authorized and instructed to issue a letter at Close of Escrow to the Auditor - Controller's Office, Public Acquisition Unit/Tax Division, County of Los Angeles, 500 West Temple Street, Tax Section, Room #153, Los Angeles, CA 90012, requesting tax cancellation, and notifying such Office of the transfer of the Property to a body corporate and politic and to remit taxes due, if any as of the Close of Escrow. Upon Escrow Holder's receipt of a confirming acknowledgment, Escrow Holder will forward a copy to Buyer, subsequent to the Close of Escrow. On or before five (5) business days prior to the Closing Date, Escrow Holder shall advise Buyer and Seller of Escrow Holder's estimate of the net credit to Buyer or Seller, as the case may be, resulting from prorations under this Agreement. If such prorations result in a net credit to Seller, Buyer shall deposit in Escrow in immediately available funds, along with the balance of the Purchase Price, the amount of such credit estimated by Escrow Holder. 10. Deliveries at Closing. (a) At the Close of Escrow, Seller shall deliver to Escrow Agent for delivery to Buyer the following documents: (i) A grant deed pursuant to which Seller conveys title of the Property to Buyer subject to the Permitted Exceptions. (ii) A Seller's affidavit in customary form and such other documents as may be reasonably required by the Title Company, executed by Seller certifying against any work done or supplies delivered to the Property which might be grounds for a materialman's or mechanic's lien. (iii) Any and all affidavits and other instruments and requirements which the Title Company shall reasonably require to issue the Title Policy. (iv) The FIRPTA Certificate and the CA Form 593-C. (b) At the Close of Escrow, Buyer will deliver to Seller the following: (i) The purchase price (net of all deductions and credits authorized herein) (the "Net Purchase Price"). (ii) Any and all affidavits and other instruments and requirements which the Title Company shall reasonably require. 11. Brokers. (a) At the Close of Escrow, Seller agrees to pay Grubb & Ellis ("Seller's Agent") a brokerage commission pursuant to their separate agreement. Seller has not dealt with any real estate broker in connection with this transaction other than Seller's Agent. Seller agrees to indemnify, defend and hold Buyer harmless against any CA\Documents and Settings\jharrison\Local Settings\Temporary Internet Files\Content.Outlook\R2ZT9WY5\LADOCS_163452_3.DOC 9 01910/0001 163452.3 claim for brokerage fees arising out of a breach of this representation and warranty. (b) At the Close of Escrow, Buyer agrees to pay Cushman & Wakefield ("Buyer's Agent") a brokerage commission pursuant to their separate agreement. Buyer represents and warrants that it has not dealt with any real estate broker in connection with this transaction other than Buyer's Agent. Buyer agrees to indemnify, defend and hold Seller harmless against any claim for brokerage fees arising out of a breach of this representation and warranty. 12. Closing Costs. The parties shall share equally the Escrow Agent's escrow costs. Buyer shall be responsible for the insurance premium for the Title Policy, including any charges for any special endorsements or extended coverage requested by Buyer therefor, the insurance premium for a loan policy for its mortgage lender, if any, and all costs of inspection and due diligence, including, but not limited to any survey costs. Each party shall pay its own attorney fees and costs. Seller shall be responsible for all transfer and documentary fees and taxes. All other closing costs shall be apportioned or allocated between the parties in the manner customary in the county in which the Property is located. 13.Close Of Escrow. As soon as (a) Buyer and Seller have deposited into Escrow all of the monies and documents that Buyer and Seller are required to deliver into Escrow, and (b) Escrow Agent is prepared to deliver to each party the documents and monies that each is to receive hereunder, including, without limitation, (i) upon recordation of the grant deed, the Title Policy to Buyer, and (ii) the Net Purchase Price to Seller, Escrow Holder shall do the following: (A) Cause the Title Company to record the grant deed in the official records of the Los Angeles County Recorder; (B) deliver to Buyer the FIRPTA Certificate, the CA Form 593-C, the Title Policy and any other documents that Seller is to deliver and Buyer is to receive hereunder through Escrow upon the Close of Escrow; (C) deliver to Seller any documents that Buyer is to deliver and Seller is to receive hereunder through Escrow upon the Close of Escrow; (D) disburse to Seller, by wire transfer to an account designated by Seller in writing, the Net Purchase Price; (E) disburse to the Title Company the premium for the Title Policy; C:\Documents and Settings\jharrison\Local Settings\Temporary Internet Files\Content.Outlook\R2ZT9WY5\LADOCS_163452_3.DOC 10 01910/0001 163452.3 (F) disburse Escrow Holder's fees to Escrow Holder; (G) disburse to Buyer any funds remaining in Escrow after the foregoing payments; and (H) obtain for each party conformed copies of all documents recorded in connection with the transactions contemplated hereunder. Escrow Holder's performance of the foregoing actions shall be deemed to occur simultaneously. The taking of such actions and the moment thereof are hereinabove and hereinafter called the "Close of Escrow" or the "Closing". The Close of Escrow shall occur no later than fifteen (15) days after expiration of the Feasibility Period; provided, however, that the date of the Closing may be accelerated at any time by mutual written agreement of Buyer and Seller. 14. Notices. Any notices required or permitted to be given under this Agreement shall be delivered by certified mail return receipt requested or overnight courier service, and addressed as follows: If to Seller: Smurfit -Stone Container Enterprises, Inc. Six City Place Drive Creve Coeur, Missouri 63141 Attention: Karen S. Copeland With a copy to: Armstrong Teasdale LLP One Metropolitan Square, Suite 2600 St. Louis, Missouri 63102 Attention: Mary M. Machon, Esq. If to Buyer: City of Vernon 4305 Santa Fe Avenue Vernon, CA 90058 Attention: Jeff A. Harrison, City Attorney With a copy to: Troy & Gould 1801 Century Park East, Floor 16 Los Angeles, CA 90071-2301 Attention: Charles L. Woltmann, Esq. 15. Governing Law. This Agreement shall be governed by the laws of the State of California without regard to the conflicts of laws principles. 16. Amendments. CADocuments and Settings\jharrison\Local Settings\Temporary Internet Files\Content.Outlook\R2ZT9WY5\LADOCS_163452_3.DOC 11 01910/0001 163452.3 This Agreement may not be amended except by a further agreement in writing executed by the parties hereto. 17. Counterparts. This Agreement may be executed in two or more counterparts. Each executed counterpart shall be deemed an original hereof, but all counterparts together shall constitute one and the same instrument. 18. Possession, Risk of Loss. At the Close of Escrow, Seller shall deliver possession of the Property to Buyer free and clear of all third -party occupancies or rights to possession (other than Permitted Exceptions), and all risk of loss of, or damage to the Property from any source shall, at that time, pass to and become the responsibility of Buyer. Prior to Close of Escrow, the risk of loss shall remain with Seller. If all or part of any Property is materially destroyed or damaged by fire or other casualty prior to Close of Escrow, either party hereto may terminate this Agreement by providing written notice to the other party within thirty (30) days of such destruction or damage. In the event either party terminates this Agreement pursuant to this Section 18, the Deposit shall be returned to Buyer forthwith. 19. Attorney's Fees. In the event suit is brought or an attorney is retained by any party to this Agreement to seek interpretation or construction of any term or provision of this Agreement, to enforce the terms of this Agreement, to collect any money due, or to obtain any money damages or equitable relief for breach, the prevailing party shall be entitled to recover reimbursement for reasonable attorneys' fees, court costs, costs of investigation, and other related expenses. 20. Intended Agreement. This Agreement is the result of arms -length negotiations between parties of equivalent bargaining power and expresses the complete, actual, and intended agreement of the parties. This Agreement shall not be construed for or against either party as a result of its participation, or the participation of its counsel in the preparation and/or drafting of this Agreement or any exhibits hereto. 21. Relationship. This Agreement shall not be construed as creating a joint venture, partnership, or any other cooperative or joint arrangement between Buyer and Seller, and it shall be construed strictly in accordance with its terms. CADocuments and Settings\jharrison\Loeal Settings\Temporary Internet Files\Content.Outlook\R2ZT9WY5\LADOCS_163452_3.DOC 12 01910/0001 163452.3 22. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors in interest and permitted assigns. 23. Further Instruments and Documents. Each party hereto shall promptly upon the request of the other party or Escrow Agent, acknowledge and deliver to the other party or Escrow Agent any and all further instruments and assurances reasonably requested or appropriate to evidence or give effect to the provisions of this Agreement or to satisfy Escrow Agent's requirements, including those exhibits which are not attached at the time the parties execute this Agreement. 24. Integration. This Agreement represents the entire agreement of the parties with respect to its subject matter, and all agreements, oral or written, entered into prior to this Agreement are revoked and superseded. No representations, warranties, inducements, or oral agreements, have been made by any of the parties except as expressly set forth herein or in other contemporaneous written agreements.. 25. Severability. If any provision of this Agreement is declared void or unenforceable, such provision shall be deemed severed from this Agreement, and this Agreement shall otherwise remain in full force and effect. 26. Waiver. Failure of any party to exercise any right, remedy, or option arising out of a breach of this Agreement shall not be deemed a waiver of any right, remedy, or option with respect to any subsequent or different breach, or in the continuance of any existing breach. 27. Time of Essence. Time is hereby declared to be of the essence for the performance of all conditions and obligations under this Agreement. All periods terminating on a given day or date shall terminate at 5:00 p.m. (Pacific time) on such day or dates, and references to "days" shall refer to calendar days except for such references which are to "business days," which shall refer to days which are not Friday, Saturday, Sunday or a legal holiday. Notwithstanding the foregoing, if any period of time hereunder terminates on, or if any action is to be taken on a date which is, a Friday, Saturday, Sunday or legal holiday, the terminations of such period or the date by which such action must be taken shall be on the next succeeding business day. CADocuments and Settings\jharrison\Local Settings\Temporary Internet Files\Content.Outlook\R2ZT9WY5\LADOCS_163452_3.DOC 13 01910/0001 163452.3 28. Construction/Interpretation. The captions and paragraph headings used in this Agreement are for convenience and reference only and are not intended to define, limit, or describe the scope or intent of any provision of this Agreement. 29. Assignment. Buyer may assign this Agreement without the prior written consent of the Seller; provided, however, that no assignment shall relieve Buyer of its obligations hereunder. 30. 1031 Exchange. Either party ("exchanging party") may consummate the purchase or sale of the Property as part of a so-called like kind exchange (the "Exchange") pursuant to § 1031 of the Internal Revenue Code of 1986, as amended (the "Code"), provided that: (a) the Closing shall not be delayed or affected by reason of the Exchange nor shall the consummation or accomplishment of the Exchange be a condition precedent or condition subsequent to the exchanging party's obligations under this Contract; (b) the exchanging party shall effect the Exchange through an assignment of this Contract, or its rights under this Contract, to a qualified intermediary and the other party ("accommodating party") shall not be required to take an assignment of the purchase agreement for the relinquished property or be required to acquire or hold title to any real property for purposes of consummating the Exchange; and (c) the exchanging party shall pay any additional costs that would not otherwise have been incurred by the exchanging party or the accommodating party had the exchanging party not consummated its purchase through the Exchange. The accommodating party shall not by this agreement or acquiescence to the Exchange (i) have its rights under this Contract affected or diminished in any manner or (ii) be responsible for compliance with or be deemed to have warranted to the exchanging party that the Exchange in fact complies with § 1031 of the Code. [Signature Page Follows] CADocuments and Settings\jharrison\Local Settings\Temporary Internet Files\Content.Outlook\R2ZT9WY5\LADOCS_163452_3.DOC 14 01910/0001 163452.3 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by its duly authorized officers. SELLER: SMURFIT-STONE CONTAINER ENTERPRISES, INC. By: Title: Dated: BUYER: CITY OF VERNON, CALIFORNIA By: Leonis Malburg Dated: Attest: Name: Manuela Giron Title: City Clerk Approved As to Form: By: Name: Jeff A. Harrison Title: Acting City Attorney ESCROW AGENT: NORTH AMERICAN TITLE COMPANY Date of Opening of Escrow: By: Name: Tina DeBow Title: Escrow Officer 2007 CADocuments and Settings\jharrison\Local Settings\Temporary Internet Files\Content.Outlook\R2ZT9WY5\LADOCS_163452_3.DOC 15 01910/0001 163452.3 -.0, _ . OFFICE OF THE CITY ATTORNEY Jeff A. Harrison, City Attorney 4305 Santa Fe Avenue, Vernon, California 90058 Telephone (323) 583-8811 Fax (323) 826-1438 December 12, 2007 VIA FEDERAL EXPRESS Sandra Slon, Esq. Troy & Gould 1801 Century Park East, 16th Floor Los Angeles, CA 90067-2367 Re: Purchase of Smurfit Property Dear Sandy: Enclosed please find the originally signed Certificate of Acceptance and Preliminary Change of Ownership Report regarding the above -referenced matter. If you have any questions, please contact me. Very truly yours, If A Harrison City Attorney JH:em Enclosures cc: Ms. Nelly Giron, City Clerk (w/ encls.) / / bi Exclusively Industrial CERTIFICATE OF ACCEPTANCE This is to certify that the interest in real property conveyed by Grant Deed dated December /I , 2007, from Smurfit -Stone Container Enterprises, Inc., a Delaware corporation, for the property commonly known as: 2200 E. 55th Street and 2001 E. 571h Street, Vernon, CA, is hereby accepted by the undersigned officer(s) on behalf of the City Council of said City pursuant to authority conferred by Resolution No. 9439 of the City Council of said City adopted on October 15 , 2007 and the City consents to the recordation thereof by its duly authorized officer(s). Date: L XtAV,&W //, 7 The City of Vernon By: Name: i fx Eric T. Fresch Title: MWyW City Administrator T EST: A.- Manuela Giron, ity lerk A PROV AS TO FORM: N J . Harrison Tit e. City ttorney Assessor's Parcel Numbers: APN: 6308-017-009; 6308-017-015 01910/0049 166525.2 COUNTY OF LOS ANGELES • OFFICE OF THE ASSESSOR FOR RECORDER'S USE ONLY 500 WEST TEMPLE STREET • LOS ANGELES, CA 90012-2770 DOCUMENT NUMBER Telephone: 1.213.974.3211 • Email: helpdesk@assessorlacounty.gov • Website: assessor. lacounty. gov ' Si desea ayuda en Espanol, flame al n6mero 1.213.974.3211 RICK AUERBACH ASSESSOR PRELIMINARY CHANGE OF OWNERSHIP REPORT [To be completed by transferee (buyer) prior to transfer of subject properly in accordance with section 480.3 of the Revenue and Taxation Code.] A Preliminary Change of Ownership Report must be filed with each conveyance in the County Recorder's office for the county where the property is located; this particular form may be used in all 58 counties of California. THIS REPORT IS NOT A PUBLIC DOCUMENT SELLER/TRANSFEROR: Smurfit -Stone Container Enterprises, Inc. BUYER./TRANSFEREE: City of Vernon ASSESSOR'S PARCEL NUMBER(S) 6308-017-009; 6308-017-015 RECORDING DATE PROPERTY ADDRESS OR LOCATION: 2200 E. 551h Street and 2001 E. 57th Street, Vernon, California MAIL TAX INFORMATION TO: Name Jeff A. Harrison Address 4305 Santa Fe Avenue, Vernon, California 90058 Phone Number (8 a.m.-5 p.m.) (323) 583-8811 NOTICE: A lien for property taxes applies to your property on January 1 of each year for the taxes owing in the following fiscal year. July 1 through June 30. One-half of these taxes is due November 1, and one-half is due February 1. The first installment becomes delinquent on December 10, and the second installment becomes delinquent on April 10. One tax bill is mailed before November 1 to the owner of record. You may be responsible for the current or upcoming property taxes even if you do not receive the tax bill. The property which you acquired may be subject to a supplemental assessment in an amount to be determined by the Los Angeles County Assessor. For further information on your supplemental roll obligation, please call the Los Angeles County Assessor at (213) 974-321.1 PART I: TRANSFER INFORMATION (please answer all questions) YES NO ❑ ❑ A. Is this transfer solely between husband and wife (addition of a spouse, death of a spouse, divorce settlement, etc.)? ❑ ❑ B. Is this transaction only a correction of the name(s) of the person(s) holding title to the property (for example, a name change upon marriage)? Please explain ❑ ❑ C. Is this document recorded to create, terminate, or reconvey a lender's interest in the property? ❑ ❑ D. Is this transaction recorded only as a requirement for financing purposes or to create, termir reconvey a security interest (e.g., cosigner)?Please explain E. Is this document recorded to substitute a trustee of a trust, mortgage or o F. Did this transfer result in the creation of a joint tenant ch th eller G. Does this transfer return propert o the rson�et._r�sfer ted joi tena H. Is this a transfer of prope 1 to a revocable tha ' ay be r ked b r and is for tl 2. to a trust that a revoked b the for/Grantor who is also a jo tenant(s) as neficiaries w n he Creator/Grantor dies? ,d isferor) r1mains as one of the joint tenants? (original ransferor)? benefit of the ❑ transferor ❑ transferor's spouse? and which names the other joint ❑ ❑ 3. to an irrevoc le tr r the tnefit of the ❑ Creato antor and/or ❑ Grantor's spouse? ❑ ❑ 4. to an irrevocab a trust from wth�raining erts to the Creator/Grantor within 12 years? ❑ ❑ I. If this property is subject to a lease, is tlease term 35 years or more including written options? ❑ ❑J Is this a transfer between ❑ p s) and child(ren)? ❑ or from grandparent(s) to grandchild(ren)? ❑ ❑ �K. Is this transaction to replace a principal residence by a person 55 years of age or older? Within the same county? ❑ Yes ONO ❑ ❑ -L. Is this transaction to replace a principal residence by a person who is severely disabled as defined by Revenue and Taxation Code section 69.5? Within the same county? ❑ Yes ❑ No ❑ ❑ M. Is this transfer solely between domestic partners currently registered with the California Secretary of State? "If you checked yes to J, K or L, you may qualify for a property tax reassessment exclusion, which may result in lower taxes on your property. If you do not file a claim, your property will be reassessed. Please provide any other information that will help the Assessor to understand the nature of the transfer. If the conveying document constitutes an exclusion from a change in ownership as defined in section 62 of the Revenue and Taxation Code for any reason other than those listed above, set forth the specific exclusions claimed: Please answer all questions in each section. If a question does not apply, indicate with "N/A." Sign and date at bottom of second page. PART II: OTHER TRANSFER INFORMATION A. Date of transfer if other than recording date B. Type of transfer (please check appropriate box): ❑ Purchase ❑ Foreclosure ❑ Gift ❑ Trade or Exchange ❑ Merger, Stock, or Partnership Acquisition ❑ Contract of Sale — Date of Contract ❑ Inheritance — Date of Death ❑ Other (please explain): ❑ Creation of Lease ❑ Assignment of a Lease ❑ Termination of a Lease ❑ Sale/Leaseback ❑ Date lease began ❑ Original term in years (including written options) ❑ Remaining term in years (including written options) Monthly Payment Remaining Term C. Was only a partial interest in the property transferred? ❑ Yes ❑ No If yes, indicate the percentage transferred %. American LegalNet, Inc. BOE-502-A (FRONT) REV. 9 (8-06) ASSR-70 (Rev. 08/06) www.FormsWorkflow.com Please write Assessor's Parcel Number(s): Please answer, to the best of your knowledge, all applicable questions, then sign and date. If a question does not apply, indicate with "N/A. " PART III: PURCHASE PRICE AND TERMS OF SALE A. CASH DOWN PAYMENT OR value of trade or exchange (excluding closing costs) Amount $ B. FIRST DEED OF TRUST @ % interest for years. Pymts./Mo. = $ (Prin: & Int. only) Amount $ FHA( (Discount Points) ❑ Fixed rate ❑ New loan ❑ Conventional ❑ Variable rate ❑ Assumed existing loan balance VA( Discount Points) ❑ All inclusive D.T. ($ Wrapped) ❑ Bank or savings & loan ❑ Cal -Vet ❑ Loan carried by seller ❑ Finance company Balloon payment ❑ Yes ❑ No Due Date Amount $ C. SECOND DEED OF TRUST @ % interest for years. Pymts./Mo ❑ Bank or savings & loan ❑ Fixed rate ❑ Loan carried by seller ❑ Variable rate Balloon payment ❑ Yes ❑ No Due Date D. OTHER FINANCING: Is other financing involved not covered in (b) or (c) above? _ $ (Prin. & Int. only) Amount $_ ❑ New loan ❑ Assumed existing loan balance Amount $ ❑ Yes ❑ No Amount $ Type @ % interest for years. Pymts./Mo. = $ (Prin. & Int. only) ❑ Bank or savings & loan ❑ Fixed rate ❑ New loan ❑ Loan carried by seller ❑ Variable rate ❑ Assumed existing loan balance Balloon payment ❑ Yes ❑ No Due Date Amount $ E. WAS AN IMPROVEMENT BOND ASSUMED BY THE BUYER? ❑ Yes ❑ No Outstanding Balance: Amount $ F. TOTAL PURCHASE PRICE (or acquisition price, if traded or exchanged, include real estate commission if paid) TOTAL ITEMS A THROUGH E 1 $ 0.00 G. PROPERTY PURCHASED Through a broker El Direct from seller ❑ From a fa member ❑ Other (please explain): If purchased through a broker, provide broker's name and phone number: Please explain any special terms, seller concessions, or financing and any and terms of sale: PART IV: P A. TYPE OF PROPERTY TRANSFERRED: ❑ Single-family residence ❑ Multiple -family residence (no. of units: ) ❑ Commercial/Industrial ❑ Other (Description: i.e., timber, mineral, wate rights, B. IS THIS PROPERTY INTENDED AS YOUR PRI CIPAL that would help the Assessor understand the purchase price �eicultural ❑ Timeshare Co-op/Own-your-own ❑ Manufactured home Condominium ❑ Unimproved lot Yes I I No If yes, enter date of occupancy 20 or intended occupancy / , 20 6'e 'URHAZE ( r) (month) (day) (year) C. IS PERSONAL PROPERTY INPRIC (i.e., furniture, farm equipment, machinery, etc.) (other than a manufactured homroperty )? ❑Yes ❑ No If yes, enter the value of the pey included the purchase price $ (Attach itemized list of personal property.) D. IS A MANUFACTURED HOMEN PUR ASE PRICE? ❑ Yes ❑ No If yes, how much of the purchac to the manufactured home? $ Is the manufacturedhome subject to local property tax? ❑ Yes ❑ No What is the decal number? E. DOES THE PROPERTY PRODUCE INCOME? ❑ Yes ❑ No If yes, is the income from: ❑ Lease/Rent ❑ Contract ❑ Mineral rights ❑ Other (please explain): F. WHAT WAS THE CONDITION OF THE PROPERTY AT THE TIME OF SALE? ❑ Good ❑ Average ❑ Fair ❑ Poor Please explain the physical condition of the property and provide any other information (such as restrictions, etc.) that would assist the Assessor in determining the value of the CERTIFICATION OWNERSHIP TYPE (✓) Proprietorship ❑ Partnership ❑ Corporation ❑ 1 certify that the foregoing is true, correct and complete to the best of my knowledge and belief. This declaration is binding on each and every co-owner and/or partner Other Municipality NAME OF NEW OWNER/CORPORATE OFFICER TITLE Eric T. Fresch City Administrator SIGNATURE OF N =NER/C0f�PORATE/FFIgWDATE December 10, 2007 NAME OF ENTITY (typed or printed) CFEDERAL EMPLOYER ID NUMBER City of Vernon ADDRESS (typed or printed) E-MAIL ADDRESS (optional) DATE 4305 Santa Fe Avenue, Vernon, California 90058 (NOTE: The Assessor may contact you for additional information.) If a document evidencing a change of ownership is presented to the recorder for recordation without the concurrent filing of a preliminary change of ownership report, the recorder may charge an additional recording fee of twenty dollars ($20). American LegalNet, Inc. www.FormsWorkflow.com BOE-502-A (BACK) REV. 9 (8-06) ASSR-70 (Rev. 08/06) OFFICE OF THE CITY ATTORNEY Jeff A. Harrison, City Attorney 4305 Santa Fe Avenue, Vernon, California 90058 Telephone (323) 583-8811 Fax (323) 826-1438 December 11, 2007 VIA FEDERAL EXPRESS Sandra Slon, Esq. Troy & Gould 1801 Century Park East, 16th Floor Los Angeles, CA 90067-2367 Re: Smurfit -Stone Container Enterprises, Inc. Dear Sandy: Enclosed please find the originally signed Amendment to the Agreement for Purchase and Sale of Real Property regarding the above -referenced matter. Please contact me upon your receipt. Very truly yours, rarrison A City A JH:em Enclosures cc: Ms. Nelly Giron, City Clerk (w/ encls.) E-,Cc(usive(y Industfia( 1.9!5� ® I... OFFICE OF THE CITY ATTORNEY Jeff A. Harrison, City Attorney 4305 Santa Fe Avenue, Vernon, California 90058 Telephone (323) 583-8811 Fax (323) 826-1438 November 8, 2007 VIA U.S. MAIL Tina De Bow, Senior Escrow Officer North American Title Company 101 N. Brand Blvd., Suite 1800 Glendale, CA 91203 Re: 2200 E. 55th Street & 2001 E. 57th Street Escrow No. 231119-TD Dear Tina: Enclosed please find the signed Acknowledgement of Letter, Escrow Acceptance and Supplemental Instructions, page 1 of LGS Report (report number 178253), page 1 of LGS Report (report number 178255), PCOR Acknowledgment, POOR and Buyer's Commission Instructions Acknowledgement for the above -referenced matter. Very trul yours, Je H rison City Attorney JH:em Enclosures cc: Ms. Nelly Giron, City Clerk (w/ encls.) E-)(c(usivefy Industriaf Via Golden.State Overnight November 2, 2007 CITY OF VERNON ATTN: JEFF A. HARRISON 4305 SANTA FE AVENUE VERNON, CA 90058 ESCROW NO,: 231119-TD PROPERTY: 2200 E. 55TH STREET & 2001 E. 57TH STREET VERNON, CA 90058 Dear Mr, Harrison: In connection with the above -numbered escrow, we enclose the following items: Please examine the following, and if they meet with your approval, sign and return. Copies are enclosed for your records. ✓ Escrow Acceptance and Supplemental Instructions dated October 22, 2007 (Revised 10--24-07); ✓ Page 1 of the LGS Report dated October 22, 2007 under their report number 178253. Please sign as Transferor (copy of the entire report is enclosed for your records); and ✓ Page 1 of the LGS Report dated October 22, 2007 under their report number 178255. Please sign as Transferor (copy of the entire report is enclosed for your records); and ✓ PCOR Acknowledgement. Please complete, sign and return the following: ✓ Preliminary Change of Ownership. Further enclosed for your information and records is a copy of the plotted easements. Please acknowledge receipt of the enclosed documents for our file by signing in the space provided below on page 2 and return with the above documents. Your prompt attention to these items and their return to our office will assist us in the completion of your escrow. We are pleased to have been selected to service your escrow needs. If there is any way that we may be of furt er<assistance, pleased of hesitate to contact our office. Sincerely', Maria Flores for TINA DE BOW, Senior Escrow Officer Enclosures (as stated) TD/mf 101 N. Brand Blvd. Suite 1800 Glendale, CA 91203 PHONE: (818)240-4912 FAX: (818)551-5361 TripleTek Enterprise Settlement System 4578 BuyOpLtr.doc Rgyers opening letter Dated November 2, 2007 Escrow No. 2311019-Td Page 2 Cc: Sandy Slon Troy & Gould 1801 Century Park East, 16th Floor Los Angeles, CA 90067 John McMillan Cushman & Wakefield of California 601 S. Figueroa St., 471h Floor Los Angeles, CA 90017 Joseph Furnish Lake Street Associates, Inc. 440 Western Avenue, #202 Glendale, CA 91201 BUYER: City of Vernon, a body cor oO and politic By: Eric T. Fresch, Cit 'Administrator Approved ,y By: Vj �A— I Jeff V rris , City Attorney 101 N. Brand Blvd. Suite 1800 Glendale, CA 91203 PHONE: (818)240-4912 FAx: (818)551-5361 TripleTek Enterprise Settlement System 4578 BuyOpl-tr.doc 1t AN COMPANY Like ClockworkO 1.01 N. Brand Blvd., #1800,Glendale, CA 91203 Phone: 818 240-4912 Fax: 818 240-9884 Page 1 ESCROW NO. 231119-TD DATE: OCTOBER 22, 2007 (Revised 10-24-07) PROPERTY ADDRESS: 2200 E. 55TH STREET AND 2001 EAST 57TH STREET, VERNON, CA 90058 ESCROW ACCEPTANCE AND SUPPLEMENTAL INSTRUCTIONS Escrow Holder hereby acknowledges receipt of three fully executed in counterpart, duplicate originals of that certain Agreement for Purchase and Sale of Real Property, dated as of October 18, 2007, by and between Smurfit -Stone Container Enterprises, Inc., a Delaware corporation, as Seller, and City of Vernon, a public body corporate and politic, as Buyer (hereinafter the "Agreement"). Escrow Holder's General Provisions are attached hereto and by this reference are made a part hereof. In the event of a conflict between the Escrow Holder's General Provisions and the Agreement the Agreement shall control. Escrow Holder is hereby authorized and instructed to deliver one fully executed original counter part, of the Agreement, to the Seller and one to the Buyer, at their respective directed addresses appearing in the notices section of the Agreement. Escrow Holder shall retain one fully executed original counterpart Agreement in the above referenced escrow file for Escrow Holder's custodial retention purposes. Escrow Holder hereby acknowledges receipt of Buyer's initial earnest money deposit in the amount of $250,000.00 as called for in the Agreement, on October 22, 2007. Buyer has delivered or caused to be delivered to Escrow Holder a completed W-9 and Notice of Opportunity to Earn Interest Instructions form, receipt of which is hereby acknowledged as having been received by Escrow Holder.on Oct. 23, 2007. Buyer and Seller execute these instructions, confirming the following time sensitive dates: 1. The date to be considered as the Opening of Escrow Date is hereby established as being October 18, 20G7: 2, The 3rd business day after said Opening Date is hereby confirmed to be October 24, 2007.* 3. The 51h business day after said Opening Date is hereby confirmed to be October 29, 2007.* *Fridays are not business days per Section 27 of the Agreement. AN qy Like Clockwork@ 101 N. Brand Blvd., #1800,Glendale, CA 91203 Phone; 818 240-4912 Fax: 818 240-9884 Page 2 ESCROW NO. 231119-TD DATE: OCTOBER 22, 2007 (Revised 10-24-07) PROPERTY ADDRESS: 2200 E, 55TI STREET AND 2001 EAST 57T" STREET, VERNON, CA 90058 ESCROW ACCEPTANCE AND SUPPLEMENTAL INSTRUCTIONS -continued 4. The 45th date after said Opening Date is hereby established as being December 3, 2007 (said date being Dec. 2, 2007, which is a Sunday, and therefore moved to the next business day), and is confirmed by the undersigned parties, as being the expiration date of the Feasibility Period. 5. Seller and Buyer will deposit or cause to be deposited, prior to the close of escrow, fully executed authorizations to pay the Broker's commissions as referenced in Paragraph 11 of the Agreement. 6. Buyer and Seller do hereby acknowledge receipt of a copy of those certain LGS Reports, Inc., natural hazard disclosure reports, dated Oct. 22, 2007, for the subject property, thereby satisfying this requirement. Buyer and Seller, and Signature of Agent for Transferor shall sign and return the Statutory Natural Hazard Disclosure Statement the "Statutory Form" for each report, and deposit or cause to be deposited the same with Escrow Holder, within 5 days from receipt of same through escrow. EACH OF THE UNDERSIGNED STATES THAT HE/SHE HAS READ THE FOREGOING INSTRUCTIONS AND UNDERSTANDS THEM AND DOES HEREBY ACKNOWLEDGE RECEIPT OF A COPY OF THESE INSTRUCTIONS. EACH OF THE UNDERSIGNED UNDERSTANDS THESE INSTRUCTIONS MAY BE EXECUTED IN COUNTERPARTS, ALL OF WHICH WHEN TAKEN TOGETHER SHALL BE DEEMED TO BE THE INSTRUMENT. BUYER: SELLER: City of Vernon, a body corporate and politic Smurfit -Stone Container Enterprises, Inc., a Delaware corporation By, Eric T. Fresch,'City Adriiriistrator By: Craig A. Hunt, Sr. VP & Secretary Approved by: By: Je arri , City Attorney Escrow No. 231119-TD GENERAL PROVISIONS DEPOSIT AND DISBURSEMENT OF FUNDS All funds received in this escrow shall be deposited with other escrow funds in a general escrow account or accounts of North American Title . Company, Inc. (hereinafter referred to as "NATC") with any state or national bank or savings and loan, and may be transferred to any other such general escrow account or accounts. Said funds will not earn interest unless specifically instructed, NATC shall have no obligation to account to parties in any manner for the value of, or pay to parties, any benefit received by NATC, directly or indirectly, by reason of the deposit of the escrowed funds or the maintenance of such accounts with that bank. Those benefits may include, without limitation, credits allowed by that bank on loans to NATC and on accounting, reporting and other services and products of that bank and earnings on investments made with the proceeds of such loans, Any such benefits shall be deemed additional compensation eamed by NATC for its services as escrow holder. North American Title Company will impose a $25.00 returned item handling fee for each item in this transaction returned unpaid by the drawer's financial institution. North American Title Company may present any deposit item in this transaction for payment by the use of an electronic automated clearinghouse (ACH) transaction. All disbursements shall be made by check of NATC, NATC shall raot be responsible for any delay in closing if funds received by escrow are not available for immediate withdrawal. NATC is authorized not to close escrow or disburse until good funds as provided for in California Insurance Code Section 12413.1 ("A13512") have been confirmed in escrow. if any check submitted to escrow is dishonored upon presentment for payment, you are authorized to notify all principals and/or their respective agents of such nonpayment. In the event any cheek(s) issued through the escrow or subescrow process, per the attached Sellers/Buyers/BOITOWCrs Statement, are uncashed or unnegotiated ("uncashed") for a period of 150 days after NATC's original issuance of such check(s), then NATC is authorized and instructed to cancel such check(s) and reissue to the same payee(s). The undersigned, both for himself/herself and for any third party payee(s), recognize(s) that NATC incurs significant expense in tracking uncashed checks, canceling and reissuing checks, and maintaining bank and accounting records of such checks. Since these activities by NATC would be additional services not otherwise contemplated and therefore not compensated by NATC's other fees and charges as shown on the attached Sellers/Buyers/Borrowers Statement, the undersigned acknowledges that a reasonable charge by NATC for such additional services is and will be fifty dollars ($50.00), which will be deducted from the payee's reissued check(s). In the event NATC is requested by payee to cancel and reissue any check prior to the 150 days, NATC is authorized to charge $50 as its fee for such service. If the original canceled check is in an amount of $50 or less, then NATC is authorized and instructed to charge and pay to itself as its fee the entire amount of the check as canceled. NATC has sole discretion and authority to determine when it may be proper not to charge such $50 fee for these services. If any uncashed reissued check also remains uncashed for a period of 150 days, then NATC is authorized and instructed to process the remaining funds for escheatment to the State of California, in accordance with NATC's customary escheatment procedures. 2. CLOSE OF ESCROW The phrase 'close of escrow' (or 'COE' of 'CE') as used in this escrow means the date on which documents are recorded, unless otherwise specified. Delivery of document by Escrow to a real estate broker shall be deemed deliver), to the principal, 3'. DELIVERY, RECEIPT AND NOTICES All written notices, communications, changes of instructions and documents intended for NATC are required to be delivered timely at time office of NATC as set forth herein. Delivery to Buyer or Seller as used in these instructions is to be by regular mail, and receipt is deemed to be 72 hours after such mailing unless otherwise stated herein.. All documents, balances and statements due the undersigned are to be mailed to the respective addresses shown below, unless otherwise directed. 4. PRORATION, ADJUSTMENT AND DEMANDS Unless otherwise specified in writing, all prorations or adjustments are to be made as of close of escrow on the basis of a 30,day month. NATC is to use the information contained in the latest available real property tax statement, without regard to any reassessments or subsequent changes. Real property tax bills or statements issued after close of escrow shall be handled directly between buyer and seller outside of escrow. NATC is instructed to assume and shall be fully protected in assuming that all information (for example, association fees, rents, rental deposits, insurance, insurance premiums, beneficiary statements) provided to NATC by the parties of their agent(s) is correct. NATC is authorized to pay all encumbrances necessary to place title in condition called for herein, including but not limited to prepayment penalties, without further approval of the undersigned. Application of payoff funds: Should a check or wire be deemed unacceptable by lenders, creditors, lien holders or beneficiary of a Deed or Trust, you are authorized to act on our behalf in requesting the funds, as well as any balance in an impound account, be applied towards the balance due. 5. SUPPLEMENTALTAXES The parties acknowledge that the subject property may be subject to real property supplemental taxes dire as a result of change of ownership taking place through this escrow, prior changes in ownership, or improvements of the subject property. Any adjustment due on receipt of a supplemental tax bill will be made by the parties outside of this escrow and NATC is released from all liability in connection with same. 6. UTILITIES, WATER, GARBAGE AND ENVIRONMENTAL ISSUES Transfer of utilities, water, and garbage service, or any interruptions or cancellations thereof are to be settled by Buyer and Seller directly and outside of escrow. NATC shall not be responsible for any late payments or nonpayment for any of these services. It is acknowledged that NATC has made no investigation concerning the property as to environmental or hazardous materials issues, and NATC is released of any responsibility or liability in connection with such issues. 7. POSSESSION Possession of the subject property shall be settled by the Buyer and Seller, and NATC shall not be liable or responsible for such possession. 8. RECORDATION OF INSTRUMENTS NATC is authorized and instructed to record any documents delivered through this escrow, the recording of which is necessary or proper in the issuance of the requested policy or policies of title insurance. 9. AUTHORIZATION TO FURNISH COPIES NATC is authorized to furnish copies of preliminary reports, inspection reports, escrow instructions, supplements, amendments or notices of cancellations and closing statements in this escrow to the real estate broker(s) and lender(s) refened to in this escrow. NATC may do so without incurring liability to any party. 10. FIRE, FLOOD, AND HAZARD INSURANCE / Other than as may be specifically instructed by lender, NATC is not to be concerned with nor make any inquiry as to any fire, flood, hazard and other liability insurance. 11. PERSONAL PROPERTY TAXES No examination or insurance as to the existence, amount or payment of personal property taxes is required of NATC unless specifically instructed. 12. ACTION IN INTERPLEADER The parties expressly agree that NATC, as escrow holder, has the absolute right at its election to file an action in interpleader requiring the parties to answer and litigate their several claims and tights among themselves. NATC is authorized to deposit with the clerk of the court all documents and funds held in this escrow. In the event such action is filed, the parties jointly and severally agree to pay NATC's cancellation charges and costs, expenses and reasonable attorneys fees which NATC is required to expend in this interpleader action. Upon the filing of the action, NATC shall be fully released from all obligations to further perform any duties otherwise imposed by the terms of this escrow. 13. USURY PLEAS �I TIAL Buyer: �� Seller:_ North American Title Company, 101 N. Brand Blvd. Suite 1800 Glendale, CA 91203 PHONE: PAX: (818)551-53G1 TripleTek Enterprise Settlement System 4735 GenProvSale.doc NATC is not to be concerned with any question of usury in the processing of this escrow and NATC is hereby released of any responsibilityor liability therefore. 14, CANCELLATION OF ESCROW Any principal requesting that NATC cancel this escrow shall file notice of demand to cancel in NATC's office in writing. NATC shall within a reasonable time thereafter mail or otherwise deliver one copy of such notice of demand to cancel to the principals or their respective agents. Unless written objection to such notice of demand to cancel is filed with NATC within fifteen (15) calendar days after the date NATC mailed or delivered the initial notice of demand to cancel, NATC is authorized to cancel this escrow. IfNATC cancels this escrow, it is authorized to return the documents to the patties. NATC is, in any event, authorized to hold any money deposited in escrow until it is in receipt of mutual written instructions signed by all parties of the order of a court of competent jurisdiction, concerning the disposition of such money. NATC may return lender's papers and/or funds upon lender's demand. In the event of cancellation of this escrow, the fees and charges due NATC, including expenditures incurred or authorized, shall be bome by the parties or decided by a court of competentjurisdiction. 15. CONFLICTING INSTRUCTIONS Should NATC receive or become aware of any conflicting instructions, demands or claims with respect to this escrow or with respect to any money or property deposited herein or affected, NATC-,shall have the right to discontinue any or all further acts on its part until in receipt of consistent instructions or until the conflict is resolved to NATO's satisfaction. In the event that any dispute between the parties is submitted to arbitration, NATC is authorized to follow the award or decision of such arbitrator(s), whether or not such arbitration award or decision is 'binding' or'final,' 16. TERMINATION OF AGENCY OBLIGATIONS If there is no action taken on this escrow for any six month period, NATC's agency obligation shall terminate at its option and NATC shall be authorized to returns all documents, monies or other items to the parties depositing same. This shall not limit NATC's right to withdraw as escrow agent from this transaction at any time. In the event of termination of NATC's agency obligations, the parties shall pay its fees, charges and any expenses incurred. 17. RIGHT OF RESIGNATION NATC has the right to resign as escrow holder, upon reasonable written notice, and it is acknowledged that five calendar days shall be deemed reasonable under this paragraph. If such right is exercised, NATC is authorized to return all funds and documents to the party who deposited them and NATC shall have no further liability in this escrow. 18, MEMORANDA NATC is to be concerned only with the directives specifically set forth in the escrow instructions and amendments hereto, and is not to be concerned with of liable Tor items designated as 'memoranda' in the within escrow instruction, nor with any other agreement or contract between the parties. 19, DESTRUCTION OF RECORDS NATC is authorized to destroy or otherwise dispose of any and all documents, papers, instructions, correspondence and other material pertaining to this escrow at the expiration of seven years fiom the close of escrow or cancellation thereof, without liability and without further notice to parties in the transaction. - 20. CHANGE OF OWNERSHIP Revenue and Taxation Code Section 480.3 requires that Buyers complete a Preliminary Change of Ownership Report (PCOR) for all deeds and other documents which reflect change in ownership of real property. If such PCOR is not presented at time of recording, or is incomplete, a fee of $20 or as required by law will be charged to the appropriate party. NATC is relieved of all liability or responsibility as to the validity, sufficiency or preparation of said PCOR. 21. INTERNAL REVENUE SERVICE REPORTING REQUIREMENTS The Parties acknowledge that NATC may be required to report this real estate transaction, or aspects thereof, to the Internal Revenue Service. The Patties authorize NATC to make such reporting as it deems necessary, and agree to hold NATC harmless for such reporting. The Parties also agree to provide to NATC all documentation and information requested by NATIC to comply with reporting requirements. 22. FOREIGN INVESTOR REAL PROPERTY TAX ACT(S) Under Section 1445 of the Internal Revenue Code as amended ("Section 1445"), the Foreign Investment in Real Property Tax Act ("FIRPTA. ), every Buyer of U.S. real property must, unless an exemption applies, deduct and shall deduct and hold from seller's proceeds ten percent (10%) of the gross sales price. NATC is released from and shall have no liability, obligation or responsibility with respect to (a) withholding of funds Pursuant to Section 1445(b) advising the parties as to the requirements of such section, (c) determining whether the transferor is a foreign person under such Section, or (d) obtaining a non -foreign affidavit or other basis for an exemption of such section, or otherwise making any inquiry concerning compliance with such Section by any party to the transaction. State Withholding & Reportingfor closings after Jauumy 1, 2003: Under California Law (Rev & Tax Corte 18662) a buyer may be required to withhold and deliver to the Franchise Tax Board (FTB) an amount equal to 3.33% of the sales price in the case of disposition of California real properq, interest ("Real Property') by either: 1) A seller who is an individual or when the disbursement instructions authorize the proceeds to be sent to a financial internnedimy of seller or 2) a corporation seller that has no permanent place of business in California. Buyer may be subject to a penalty (equal to the greater of 10% of the amount required to be withheld or $500) for failing to withhold and transmit the funds to FTB in the time required by law. Buyer is not required to withhold any amount and will not be subject to penalty far failure to withhold f a) the sale price of the Real Property does not exceed $100,000; b) the seller executes a written certificate under penally ofperjuty certfdng that the seller is a corporation with a permanent place of business in California; or c) the seller, who is an individual, executes a written certificate under• penalh, ofperjury certifying one of the following: (i) the Real Property was the seller's principal residence (as defined in IRC 121); (ii) the Real Property is or will be exchanged for property of like kind (as defined in IRC 1031) and that the seller intents to acquire property sintilar or related in service to use so as to be eligible for nonrecognition of gain for California intone tax purposed under IRC 1031; (iii) the Real Property has been compulsorily or involuntarily converted (cis defined in IRC 1033) and the seller intends to acquire properly similar or related in service or use as to be eligible for nonrecognition ofgain for California income tax purposes under IRC 1033; or (bg the Real Property sale will result in loss of California intone taxpurposes. Seller is subject to penalties for knowingly filing a fraudulent certfcale for the purpose of avoiding the withholding laws. FTB may grant reduced withholding and waivers fr•ou withholding on a case -by -case basis for corporations o• other entities. Contact FTB: For additional information regarding California withholding, contact the Franchise Tax Board at (toll free) 888-792-4900, by email at urns a,t/b.ca..eov or visit their website at www.ltb.ca. eov. 23. DISCLOSURE OF TAXPAYER IDENTIFICATION NUMBERS Internal Revenue Code Section 6109(h) imposes requirements for furnishing, disclosing and including taxpayer identification numbers in tax returns on the Parties to a residential real estate transaction involving seller -provided Financing. The parties understand that the disclosure reporting requirements are exclusive obligations between the Parties to this transaction and that NATC is not obligated to transmit the taxpayer identification numbers to the Internal Revenue Service or to the Parties-NATC is not rendering an opinion concerning the effect of this law,on this tansaction, and the Parties are not relying upon any statements made or omitted by the escrow or closing officer. To facilitate compliance with this law, the parties to this escrow hereby authorize NATC to release any Party's taxpayer identification number to any requesting Party who Is a Party to this transaction. The requesting Party shall deliver a written request to escrow. The parties hereto waive all rights of confidentiality regarding their respective taxpayer identification numbers and agree to defend, indemnify, and hold NATC harmless fi-on1 and against any fees, costs, or judgments incurred and/or awarded in connection with the release of taxpayer identification numbers. 24, "FAX/ELECTRONIC" TRANSMISSIONS NATC is authorized to accept and rely upon instructions and amendments thereto as such may be submitted via facsimile machines (`PAX') or electronic media. The parties hereby agree and instruct escrow holder to rely upon such documents hearing original signatures. The parties hereby agree to provide to escrow holder the original documents within 72 hours of transmission. The parties further PLEA INITIAL Buyce - Seller:_ North American Title Company, 101 N. Brand Blvd. Suite 1800 Glendale, CA 91203 PHONE: FAX: (818)551-5361 TripleTel, Enterprise Sealemenl System 4735 G-P—Sale.doc acknowledge and agree that documents necessary for recording by the County Recorder must contain original/notarized signatures, and therefore, non -receipt of the original document(s) to record can delay the close of escrow. 25. AGREEMENT OF CO.OPERATION (Unjust Enrichment) In the event that any party to this escrow received funds or is credited with funds that they are not entitled to, for whatever reason, they agree upon written demand, to return said funds to the proper party entitled or to the escrow for disbursement, In [he event that suit is brought to enforce the return of said funds, the parties agree to reimburse the prevailing party to reasonable Attorney Fees. 26. OFFICIAL BUSINESS HOURS NATC's official business hours are 8 am through 5 pm Monday through Friday, unless otherwise posted. 27. MISCELLANEOUS FEES The Buyer/Borrower(s) hereby agree to pay an electronic delivery fee in the event lender chooses to send the loan documents electronically. NATC may also charge a fee for special courier services. A per check charge for payment of consumer debt (credit cards and other non -secured loans), wiling of funds due the lender to satisfy an existing loan and/or the proceeds due the Seller(s), Buyer/Bon'ower(s) and for drawing any additional documents necessary to close this transaction. 28, CONTINGENCY PERIODS Escrow holder shall not be responsible for monitoring contingency time periods between the parties. The parties shall execute such documents as may be requested by escrow holder, to confirm the status of any such period. 29. IMPORTANT NOTICE Except for wire transfers, funds remitted to the escrow are subject to availability requirements by Sections 123413.1 of the California Insurance Code, CASHIERS, CERTIFIED OR TELLER'S checks, payable to NATC are generally available for disbursement on the next business day following the date of deposit to North American Title Company Trust Account. Other forms of payment may cause extended delays in the closing of your transaction pursuant to the requirements imposed by Stale Law. (Wire transfer information available upon request.) 30. ESCROW INSTRUCTIONS, COUNTERPART APPROVAL AND SEVERABILITY Any escrow instruction, amendment of supplement to these instructions must be in writing. Collectively, these escrow instructions constitute the entire escrow between the escrow holder and the parties. These escrow instructions, amendments and supplements may be executed in one or more counterparts, each of which independently shall have the same effect as if it were the original, regardless of date of execution or delivery, and all of which taken together shall constitute one and the same instructions. In these instructions, whenever the context so requires, the masculine gender includes the feminine and/or neuter, and the singular includes the plural. In the event one or more of these General Provisions is held to be invalid in judicial, administrative or other proceedings, the remaining General Provisions will continue to be operative. Should there be any conflict between these General Provisions and any other agreements of which these General Provisions are a part, all the terms and conditions of these General Provisions shall control as to NATO. Once the Parties have performed and/or satisfied all conditions to escrow, NATC is authorized to close escrow without further instruction or authorization from the undersigned. ALL PARTIES ACKNOWLEDGE THAT NORTH AMERICAN TITLE COMPANY HAS NOT GIVEN AND WILL NOT GIVE ANY LEGAL, TAX, REAL ESTATE OR INVESTMENT ADVICE IN THIS ESCROW, NOR HAS IT MADE NOR WILL IT MAKE ANY INVESTIGATION, REPRESENTATIONS, OR ASSURANCES AS TO SUCH MATTERS OR AS TO COMPLIANCE OF THIS TRANSACTION WITH ANY TAX, SECURITIES, OR ANY OTHER FEDERAL OR STATE LAWS OR REGULATIONS. NORTH AMERICAN TITLE COMPANY RECOMMENDS THAT THE PARTIES SEEK AND OBTAIN INDEPENDENT LEGAL COUNSEL AND OTHER PROFESSIONAL ADVICE AS TO ALL SUCH MATTERS. THE ESCROW HOLDER IS NORTH AMERICAN TITLE COMPANY, INC., WHICH IS LICENSED BY THE CALIFORNIA DEPARTMENT OF INSURANCE. SELLER: Smurfit -Stone Container Enterprises, Inc., a Delaware corporation By: Craig A. Hunt, Sr. VP & Secretary BUYER: City of Vernon a corm to td politic By;_ Eric T. Fresch, City Administrator Approved By: Jeff a risot, C' Attorney PLEASE INITIAL Buy e Seller: North American Ti tic Company, 101 N. Brand Blvd. Suite 1800 Glendale, CA 91203 1111 ONE: FAX: (818)551-5361 Tnple'rck Emmrp ise Seulensnt System 4735 G-Pro,,S.k.doc 0 LGS Reports The Commercial Natural Hazard Disclosure Report FOR LOS ANGELES COUNTY The transferor and his or her agent(s) disclose the following information with the knowledge that even though this is not a warranty, prospective transferees may rely on this information in deciding whether and on what terms to purchase the subject property. Transferor hereby authorizes any agent(s) representing any principal(s) in this action to provide a copy of this statement to any person or entity in connection with any actual or anticipated sale of the property. The following are representations made by the transferor and his or her agent(s) based on their knowledge and maps drawn by the State. This information is a disclosure and Is not intended to be part of any contract between the transferee and the transferor. THIS REAL PROPERTY LIES WITHIN THE FOLLOWING HAZARDOUS AREA(S): A SPECIAL FLOOD HAZARD AREA (Any type Zone"A" or "V") designated by the Federal Emergency Management Agency. Yes No X Do not know and information not available from local jurisdiction AN AREA OF POTENTIAL FLOODING shown on a dam failure inundation map pursuant to Section 8589.5 of the Government Code. Yes X No Do not know and information not available from local jurisdiction A VERY HIGH FIRE HAZARD SEVERITY ZONE pursuant to Section 51178 or 51179 of the Government Code. The owner of this property is subject to the maintenance requirements of Section 51182 of the Government Code. Yes No X A WILDLAND AREA THAT MAY CONTAIN SUBSTANTIAL FOREST FIRE RISK AND HAZARDS pursuant to Section 4125 of the Public Resources Code. The owner of this property is subject to the maintenance requirements of Section 4291 of the Public Resources Code. Additionally, it is not the state's responsibility to provide fire protection services to any building or structure located within the wildlands unless the Department of Forestry and Fire Protection has entered into a cooperative agreement with a local agency for those purposes pursuant to Section 4142 of the Public Resources Code. Yes No X AN EARTHQUAKE FAULT ZONE pursuant to Section 2622 of the Public Resources Code. Yes No X A\ SEISMIC HAZARD ZONE pursuant to Section 2696 of the Public Resources Code. Yes (Landslide Zone) _ Yes (Liquefaction Zone) No X Map not yet released by state THESE HAZARDS MAY LIMIT YOUR ABILITY TO DEVELOP THE REAL PROPERTY, TO OBTAIN INSURANCE, OR TO RECEIVE ASSISTANCE AFTER A DISASTER. THE MAPS ON WHICH THESE DISCLOSURES ARE BASED ESTIMATE WHERE NATURAL HAZARDS EXIST. THEY ARE NOT DEFINITIVE INDICATORS OF WHETHER OR NOT A PROPERTY WILL BE AFFECTED BY A NATURAL DISASTER. TRANSFEREE(S) AND TRANSFEROR(S) MAY WISH TO OBTAIN PROFESSIONAL ADVICE REGARDING THOSE HAZARDS AND OTHER HAZARDS THAT MAY AFFECT THE PROPERTY. Signature of Transferor (Seller) Date Signature of Transferor (Seller) Date Signature of Agent Date Signature of Agent Date Check only one of the following: Transferor(s) and their agent(s) represent that the information herein is true and correct to the best of their knowledge as of the date signed by the transferor(s) and agent(s). X� Transferor(s) and their agent(s) acknowledge that they have exercised good faith in the selection of a third —party report provider as required in Civil Code Section 1103.7, and that the representations made in this Natural Hazard Disclosure Statement are based upon information provided by the independent third — party disclosure provider as a substituted disclosure pursuant to Civil Code Section 1103.4. Neither transferor(s) nor their agent(s) (1) has independently verified the information contained in this statement and report or (2) is personally aware of any errors or inaccuracies in the information contained on the statement. This statement was prepared by the provider below: Third —Party Disclosure Provider(s) t Date 1012212007 Rept. No. 178253 Scott Roecklein, Sr. Vice President LGS Reports, Inc. Transferee represents that he or she has read and understands this document. I (We) also have read and understand the added local hazard, airport, 1915 Bond Act, Mello -Roos, military ordnance, commercial zoning, BCDC disclosure, energy efficiency disclosure, Megan's Law disclosures, as well as the mold, radon, meth lab, and endangered species advisories and the map cover page containgil in this report. Pursuant to Civil Code Section 1103.8. the representations made in this Natural Hazard Disclosure Statement do not constitute all oM transfe ' q or agent's disclosure obligations in this transaction. Signature of Transferee(s) '/ Date Signature of Transferee(s) Date Statutory Form ©2007 LGS Reports, Inc. LLC- 200 Commerce Irvine, CA 92602 Phone: (800) 814 5599 Fax (800) 547 6566 The transferor and his or her agent(s) disclose the following information with the knowledge that even though this is not a warranty, prospective transferees may rely on this information in deciding whether and on what terms to purchase the subject property. Transferor hereby authorizes any agent(s) representing any principal(s) in this action to provide a copy of this statement to any person or entity in connection with any actual or anticipated sale of the properly. The following are representations made by the transferor and his or her agent(s) based on their knowledge and maps drawn by the State. This information is a disclosure and is not intended to be part of any contract between the transferee and the transferor. THIS REAL PROPERTY LIES WITHIN THE FOLLOWING HAZARDOUS AREA(S): A SPECIAL FLOOD HAZARD AREA (Any type Zone "A" or "W) designated by the Federal Emergency Management Agency Yes No X Do not know and information not available from local jurisdiction AN AREA OF POTENTIAL FLOODING shown on a.dam failure inundation map pursuant to Section 8589.5 of the Government Code. Yes X No Do not know and information not available from local jurisdiction A VERY HIGH FIRE HAZARD SEVERITY ZONE pursuant to Section 51178 or 51179 of the Government Code. The owner of this property is subject to the maintenance requirements of Section 51182 of the Government Code. Yes No X A WILDLAND AREA THAT MAY CONTAIN SUBSTANTIAL FOREST FIRE RISK AND HAZARDS pursuant to Section 4125 of the Public Resources Code. The owner of this property is subject to the maintenance requirements of Section 4291 of the Public Resources Code. Additionally, it is not the state's responsibility to provide fire protection services to any building or structure located within the wildlands unless the Department of Forestry and Fire Protection has entered into a cooperative agreement with a local agency for those purposes pursuant to Section 4142 of the Public Resources Code. Yes No X AN EARTHQUAKE FAULT ZONE pursuant to Section 2622 of the Public Resources Code. Yes No X A SEISMIC HAZARD ZONE pursuant to Section 2696 of the Public Resources Code. Yes (Landslide Zone) _ Yes (Liquefaction Zone) _ No X Map not yet released by state _ THESE HAZARDS MAY LIMIT YOUR ABILITY TO DEVELOP THE REAL PROPERTY, TO OBTAIN INSURANCE, OR TO RECEIVE ASSISTANCE AFTER A DISASTER. THE MAPS ON WHICH THESE DISCLOSURES ARE BASED ESTIMATE WHERE NATURAL HAZARDS EXIST. THEY ARE NOT DEFINITIVE INDICATORS OF WHETHER OR NOT A PROPERTY WILL BE AFFECTED BY A NATURAL DISASTER. TRANSFEREE(S) AND TRANSFEROR(S) MAY WISH TO OBTAIN PROFESSIONAL ADVICE REGARDING THOSE HAZARDS AND OTHER HAZARDS THAT MAY AFFECT THE PROPERTY. Signature of Transferor (Seller) Signature of Transferor (Seller) Signature of Agent Signature of Agent Check only one of the following: Date Date Date Date Transferor(s) and their agent(s) represent that the information herein is true and correct to the best of their knowledge as of the date signed by the transferor(s) and agent(s). XJ Transferor(s) and their agent(s) acknowledge that they have exercised good faith in the selection of a third —party report provider as required in Civil Code Section 1103.7, and that the representations made in this Natural Hazard Disclosure Statement are based upon information provided by the independent third — party disclosure provider as a substituted disclosure pursuant to Civil Code Section 1103.4. Neither transferor(s) nor their agent(s) (1) has independently verified the information contained in this statement and report or (2) is personally aware of any errors or inaccuracies in the information contained on the statement. This statement was prepared by the provider below: Third —Party Disclosure Provider(s) Date 10/22/2007 Rept. No. 178255 Scott Roecklein, Sr. Vice President LGS Reports, Inc. Transferee represents that he or she has read and understands this document. I (We) also have read and understand the added local hazard, airport, 1915 Bond Act, Mello -Roos, military ordnance, commercial zoning, BCDC disclosure, energy efficiency disclosure, Megan's Law disclosures, as well as the mold, radon, meth lab, and endangered species advisories and the map cover page contained�in his report. Pursuant to Civil Code Section 1103.8, the representations made in this Natural Hazard Disclosure Statement do not constitute all oft iransferor's gent's disclosure obligations in this transaction. 1 } Signature of Transferee(s) - r Y _ Date Signature of Transferee(s) Date Statutory Form 02007 LGS Reports, Inc. LLC- 200 Commerce Irvine, CA 92602 Phone: (800) 814 5599 Fax: (800) 547 6566 ACKNOWLEDGEMENT REGARDING PRELIMINARY CHANGE OF OWNERSHIP REPORT Me hand you herewith a completed Preliminary Change of Ownership Report. North American Title cannot guarantee the acceptance by the County Assessor's office of the PCOR provided at close of escrow. The undersigned buyer, or transferee, hereby acknowledges that the County Assessor may send a duplicate Preliminary Change of Ownership Report following the close of this escrow. Buyer's/Transferee's failure to comply with the Assessor's request, to complete information and return the form, may cause penalties or fines to be imposed. The undersigned hereby does, and shall, indemnify and hold North American Title Company, harmless from and against all penalties, fines, costs, damages, losses-, attorney's fees, claims and liabilities of any nature whatsoever, which may arise in connection therewith. City of Vernon, a bod co porate and politic By: Eric T. resch, ity Administrator Approved by: By. (�# 4 %_�- — Jeff arris , City Attorney BOE-502-A (FRONT) REV. 8 (10-05) ASSR-70 (Rev. 05/06) PRELIMINARY CHANGE OF OWNERSHIP REPORT [To be completed by transferee (buyer) prior to transfer of subject property in accordance with Section 480.3 of the Revenue and Taxation Code.] A Preliminary Change of Ownership Report must be filled with each conveyance in the County Recorder's office for the county where the property is located; this particular form may be used in all 58 counties of California. THIS REPORT IS NOT A PUBLIC DOCUMENT FOR RECORDER'S USE ONLY SELLER/TRANSFEROR: SMURFIT-STONE CONTAINER ENTERPRISES, INC. BUYER/TRANSFEREE: CITY OF VERNON ASSESSOR'S PARCEL NUMBER(S): 6308-017-009, 6308-017-015 PROPERTY ADDRESS OR LOCATION: 2200 E. 55TH STREET and 2001 E. 57TH STREET VERNON, CA 90058 MAIL TAX INFORMATION TO: Name CITY OF VERNON Address 4305 Santa Fe Avenue Vernon, CA 90058 Phone Number (8 a.m. — 5 p.m.) ,(323) 583-8811 NOTICE: A lien for property taxes applies to your property on January 1 of each year for the taxes owing in the following fiscal year, July 1 through June 30. One-half of these taxes is due November 1, and one-half is due February 1. The first installment becomes delinquent on December 10, and the second installment becomes delinquent on Apr')10. One tax bill is mailed before November 1 to the owner of record. You may be responsible for the current or upcoming prop y taxes even if you do not receive the tax bill. The property which you acquired may be subject to a supplement assessment in an amount to be determined by the LOS ANGELES Count Assessor. For further information on our su lemental roll obli ation, please call the LOS ANGELES County Assessor. PART I: TRANSFER INFORM ION (please answer all questions) Yes No ❑ ❑ A. Is this transfer solely between husband an _�v I El ❑ B. Is this transaction only a correction of the ar�1 upon marriage)? Please explain ❑ ❑ C. Is this document recorded to create, termi ate ❑ ❑ D. Is this transaction recorded only as a re ire interest (e.g., cosigner)? Please explain \ ❑ ❑ E. Is this document recorded to substilklilte a trust ❑ ❑ F. Did this transfer result in the creatio f a joint ❑ ❑ G. Does this transfer return propert to tie rsol e ❑ ❑ H. Is this a transfer of property: 1 1. to a revocable trust that m b t revokec spouse? 2. to a trust that may b revok by t�� additi of a sg�buse, de of a spouse, divorce settlement, etc.)? of the ers9h(s) hollibg title to the property (for example, a name change or reconve a lendeo Interest in the property? ment for f) ancing urposes or to create, terminate, or reconvey a security ist, mortgage, or other similar document? in wh)th the seller (transferor) remains as one of the joint tenants? oteA the joint tenancy (original transferor)? the t6nsferor and is for the benefit of the ❑ transferor ❑ transferor's who is also a joint tenant, and which names the other joint tenant(s) as beneficiaries hen the C at /Grantor dies? 3. to an irrevocable trUl t fore benefi of the Creator/Grantor and/or ❑ Grantor's spouse? 4. to an irrevocable trust frwhich e prop?? y reverts to the Creator/Grantor within 12 years. ❑ ❑ I. If this property is subject`to lease is he rem Thing lease term 35 years or more including written options? ❑ ❑ *J. Is this a transfer betweerrii arent(s and child(ren)? ❑ or from grandparent(s) to grandchild(ren)? ❑ ❑ *K. Is this transaction to repla la pr pal resid nce by a person 55 years of age or older? Within the same\�county? es ❑ No ❑ ❑ *L. Is this trans Lt'd to replace a principal residence by a person who is severely disabled as defined by Revenue and Taxation Code Se, 'on 69.5? ithin the ame county? ❑ Yes ❑ No ❑ ❑ M. Is thi /ransfer sole y ween omestic artners currently registered with the California Secretary of State? *If you checked y s to J, K, or , you qualify or a property tax reassessment exclusion, which may result in lower taxes on your property. If ou do not file claim, our pro erty will be reassessed. Please provide y other informat4n that ould hel , the Assessor to understand the nature of the transfer. If the conveyin docum nt constitutes a exclusio from a change in ownership as defined in section 62 of the Revenue and taxation Code for any reason ther In those listed a ve, set f rth the specific exclusions claimed: Please an .veer all uestions i each ection. If a question does not apply, indicate with "N/A Sign and date at bottom of second age. PART II: OTHER TRANSFER INFORMATION A. Date of tran f„ r if othe than r cording to B. Type of trans er (pie e chec appropr ate box): ❑ Purchase ❑ Foreclo ure ❑ Gift o Trade or Exchange ❑ Merger, Stock, or Partnership Acquisition ❑ Contract of al -- Date of Contract ❑ Inheritance - ate of eath ❑ Other (please explain); ❑ Creation of Lease / o Assignment of a Lease ❑ Termination of a Lease ❑ Date lease began ❑ Original term in years (including written options) ❑ Remaining term in years (including written options) Monthly Payment Remaining Term C. Was only a partial interest in the property transferred? ❑ Yes ❑ No If yes, indicate the percentage transferred % ❑ Sale/Leaseback BOE-502-A (BACK) REV. 8 (10-05) ASSR-70 (Rev. 05/06) Please write Assessor's Parcel Number(s): Please answer, to the best of your knowledge all applicable questions then sign and date. If a question does not apply, indicate with "N/A." PART III: PURCHASE PRICE AND TERMS OF SALE A. CASH DOWN PAYMENT OR Value of Trade or Exchange (excluding closing costs) Amount $ B. FIRST DEED OF TRUST @ % interest for years. Pymts./Mo.=$ (Prin. & Int. only) Amount $ ❑ FHA ( Discount Points) ❑ Fixed rate ❑ New loan ❑ Conventional ❑ Variable rate ❑ Assumed existing loan balance ❑ VA ( Discount Points) ❑ All inclusive D.T. ($ Wrapped) ❑ Bank or savings & loan ❑ Cal -Vet ❑ Loan carried by seller ❑ Finance Company Balloon Payment ❑ Yes ❑ No Due Date Amount $ C. SECOND DEED OF TRUST @ % interest for years. Pymts./Mo.=$ (Prin. & Int. only) Amount $ ❑ Bank or savings & loan ❑ Fixed rate ❑ New to n ❑ Loan carried by seller ❑ Variable rate ❑ Assu ed existing loan balance Balloon Payment o Yes ❑ No Due Date Amount $ D. OTHER FINANCING: Is other financing involved not covered i ) or (c) above? ❑ es ❑ No Amount $ Type @ % interest for ye rs. ymts./Mo.=$ (Prin. & Int. only) ❑ Bank or savings & loan ❑ Fixed rate ❑ New loan ❑ Loan carried by seller ❑ Variable rate Assumed existing loan balance Balloon Payment ❑ Yes ❑ No D Date ount $ E. WAS AN IMPROVEMENT BOND ASSUMED BY THE B Y; ? ❑ Y ❑ N Outstanding Balance: Amount $ F. TOTAL PURCHASE PRICE (or acquisition price, if trade \ excha �ed, incl de real estate commission if paid) N O i OTAL ITEMS A THROUGH E $ G. PROPERTY PURCHASED ❑ Through a bro If purchased through a broker, provide broke Please explain any special terms, seller on the purchase price and term of sale: PART A. TYPE OF PROPERTY TRANSFER ED: ❑ Single-family residence ❑ Multiple -family residence (no. of its: ❑ Commercial/Industrial ❑ Other (Description: i.e., timber, ' eral, B. IS THIS PROPERTY INTENDED AS UR If yes, enter the date of ocbupancy C. IS PERSONAL PRO ER_Ty-t, CLUDED (other than a m �iufactured ho bjec If yes, enter th value of the p sona property..) D. IS A MANUFACTL ED HOME CLUD If yes, how uch f the purchasprice i Is the man actu ed home subjec to loc E. DOES TH � PERTY PRODUCE IN ❑ Lease/ ent ❑ Co 'tract F. WHAT WAS T tOFs!cal ION OF T ❑'Good ❑ ver❑ Fai Please explain the ka condition of Assessor in determining the value of h to I c De v i rom a family member ❑ Other (please explain): end n ne num er: or fi ncing a d any other information that would help the Assessor understand ERT) INFORMATION Agriculral ❑ Timeshare Co-op/ wn-your-own ❑ Manufactured Home Condq Inium ❑ Unimproved lot 'tc( -- CIPAL R SIDENCE? ❑ Yes ❑ No 2 or intended occupancy / 20 (day) (year) (month) (day) (year) PURCH SE PRICE? (i.e., furniture, farm equipment, machinery, etc.) I prope tax?) ❑ Yes ❑ No cluded n the purchase price $ (Attach itemized list of personal E iN PURCF(ASE PRICE? ❑ Yes ❑ No allocated to the manufactured home? $ I property t ? ❑ Yes❑ No What is the decal number? OME? ❑ es ❑ No If yes, is the income from: ❑ Mineral fights ❑ Other (please explain): PROPERTY AT THE TIME OF SALE? ❑ Poor the property and provide any other information (such as restrictions, etc.) that would assist the e property. CERTIFICATION OWNERSHIP TYPE (,/) Proprietorship ❑ Partnership ❑ 1 certify that the foregoing is true, correct and complete to the best of my knowledge and belief. Corporation ❑ This declaration is binding on each and every co-owner and/or partner. Other ❑ NAME OF NEW OWNER/CORPORATE OFFICER CITY OF VERNON, A PUBLIC BODY CORPORATE AND POLITIC TITLE SIGNATURE OF NEW OWN CORP OFF CER City Administrator DATE 11-5-07 NAME OF ENTITY (typed rin ed) FEDERAL EMPLOYER ID NUMBER ADDRESS (typed or printed) E-MAIL ADDRESS (optional) DATE (Note: The Assessor may contact you for additional information.) If a document evidencing a change of ownership is presented to the recorder for recordation without the concurrent filing of a preliminary change of ownership report, the recorder may charge an additional recording fee of twenty dollars ($20). First Amendment to Agreement For Purchase and Sale of Real Property This First Amendment to Agreement for Purchase and We of Real Property (this "Amendment") is made as of December o, 2007 by and between Smurfit -Stone Container Enterprises, Inc., a Delaware corporation ("Seller") and The City of Vernon (`Buyer") in order to amend certain terms of the Agreement for Purchase and Sale of Real Property dated as of October 18, 2007 by and between the Buyer and Seller (the "Agreement"). Each initially capitalized term used in this Amendment without definition shall have the definition ascribed to such term in the Agreement. For good and Valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:. 1. Abandonment of Wells, Purchase Price Reduction for Non -Abandonment. Buyer and Seller have agreed that Seller will abandon only one of the three wells currently located on the Property (Well #7). The abandonment of Well #7 will be undertaken in accordance with all applicable laws, and Seller will obtain all necessary permits for this work, The abandonment of Well #7 will be accomplished within thirty (30) calendar days following the Closing Date. Seller will not abandon, damage; or destroy Wells #9 and #10. In consideration of the savings achieved. by Seller in regard to not abandoning these two wells, the parties have agreed that the Purchase Price for the Property will be reduced by $125,000. The final Purchase Price is therefore amended to be $17,125,000: 2. Property Taxes; Holdback and No Proration, Although Seller has advised Buyer that Seller has paid, in full, the December 10, 2007 installment of real property taxes on the Property, the County Assessor's Office may not process the taxes soon enough for the taxes to be shown as paid prior to the Closing Date, If the County Assessor's Office has not shown that the December 10, 2007 taxes have been paid in full by the Closing Date, the full amount of the installment of property taxes due and payable by December 10, 2007 in the amount of $57,016.27, plus the penalty amount in the amount of 10% of such amount ($5,701.61), for a total amount of $62,717.88 will beheld in Escrow from the proceeds of the Purchase Price. These funds will be released to the Seller by Escrow within two (2) business days following notification from the Assessor's Office of payment in full of the December 10, 2007 installment of the property taxes for the Property. Notwithstanding anything to the contrary in the Agreement, the parties acknowledge and agree that, since the Buyer is a tax exempt entity, there will be no proration of property taxes through Escrow. Any property taxes that were prepaid by the Seller for periods during which Seller will not own the Property will be handled between Seller and the County Assessor'sOffice. 3. Remediation and Holdback. The Buyer will assume responsibility for remediating the hydrocarbon contaminated soils at Boring B 18 after the Closing. The amount of $121000 (the "Holdback Amount") will be held back from the proceeds of the Purchase Price to reimburse Buyer for the cost of the remediation. Buyer will notify Escrow and Seller within two 01910/0049-166134.3 (2) business days following completion of the remediation and receipt ;of the final closure certificate from the City of Vernon Department of Environmental health that the remediation has been completed, and such notice will include a copy of the invoice for the remediation, within two (2) business days following Escrow's receipt of the notice of completion, closure certificate, and invoice, Escrow will deliver to Buyer a reimbursement in full for the cost of the remediation as shown on the invoice, and will deliver to Seller any excess of the Holdback Amount that is not awing to Buyer as reimbursement for the cost of the remediation; provided, however, that in no event will Seller be obligated to reimburse Buyer more than the Holdback Amount for the remediation; and Buyer will be responsible for any excess costs of remediation. 4. Closing Date. The Closing Date shall be December 18 2007. 5. Effectiveness of A' Bement. All other terms and provisions of the Agreement shall remain in full force and effect and, except as expressly amended or modified hereby, are hereby ratified and reaffirmed, In the event of any inconsistency between the provisions of this Amendment and the provisions of the Agreement, the provisions of this Amendment shall control. b. Counterparts and Facsimile. This Amendment may be executed in one or more counterparts, each of which shall be deemed an original but all of which taken together shall constitute one and the same instrument. The pasties acknowledge the validity of signatures by facsimile; provided, however, each party shall promptly deliver to the other party an originally signed document. Executed as of the date first above written. BUYER: The City of Vernon By: 'LI-I— Eric T. Fresch, Citi AdnVnistrator. ATT T; By:_ T'Manuela Giron, Ci Cle APPROVED O FORM: By; frTson, City Attorney 2. 01910/0049 166134;3 SELLER: SMURFIT-STONE CONTAINER ENTERPRISES, INC. By: Title: r ri 3 01910/0049 166134.3 AGREEMENT FOR PURCHASE AND SALE OF REAL PROPERTY THIS AGREEMENT is made and entered into (for identification purposes only) as of this day of October, 2007, BETWEEN SMURFIT-STONE CONTAINER ENTERPRISES, INC., a Delaware corporation ("Seller"), of the one part AND CITY OF VERNON, a public body corporate and politic ("Buyer"), of the other part, NOW THEREFORE, in consideration of their mutual promises, covenants, representations, and warranties herein, the Buyer and Seller agree as follows: 1. Sale and Purchase: Escrow. Seller agrees to sell to Buyer, and Buyer agrees to purchase from Seller, on the terms and conditions hereinafter set forth, that certain real property, commonly known as 2200 E. 55th Street and 2001 E. 57th Street, Vernon; California (APNs: 6308-017-009 and 6308-017-015), including all rights, privileges and easements appurtenant to said real property, including, without, limitation, all improvements, structures and fixtures thereon, and, to the extent assignable, all minerals, oil, gas, and other hydrocarbon substances on and under the Property, as well as, to the extent assignable, all development rights, or other governmental authorizations, patented or unpatented mining claims, air rights, and any other rights, rights -of -way, and appurtenances for the beneficial use and enjoyment of the real property, excluding, however all environmental and natural resource related credits and rights, including without limitation, any water rights or rights to Emissions Reducing Credits, unless specifically identified herein (collectively, the "Property"). The purchase and sale of the Property shall be conducted through an escrow (the "Escrow") with North American Title Company, 101 North Brand Blvd., Suite 1800, Glendale, CA 91203, attn: Ms. Tina DeBow (Escrow Officer), phone: 818-240-4912, fax: 818-240-9884, as escrow agent ("Escrow Agent") at such address. The opening of Escrow (the "Opening of Escrow") shall occur when Escrow Agent possesses a copy or copies of this Agreement executed in counterparts or otherwise by the parties. Escrow Agent's signature below shall constitute the agreement of Escrow Agent to serve hereunder in such capacity, and Escrow Agent shall insert the date of the Opening of Escrow where indicated at the end of this Agreement. Escrow Agent shall notify the parties 01910/0001 163968.1 of the Opening of Escrow immediately by telephone, and shall promptly return to each party counterparts of this Agreement executed by the other party and Escrow Agent. The parties shall promptly execute. and deliver to Escrow Agent such additional instructions, resolutions and other documents as Escrow Agent may reasonably require that are not inconsistent with or contrary to the provisions hereof. In the event of any inconsistency or conflict between said instructions and the provisions of this Agreement, this Agreement shall control. 2. Purchase Price. The purchase price for the Property shall be Seventeen Million Two Hundred Fifty Thousand Dollars ($17,250,000.00), payable as follows: (a) Within three (3) business days after the Opening of Escrow, Buyer shall deposit with Escrow Agent Two Hundred Fifty Thousand Dollars ($250,000.00) (together with any interest earned thereon, the "Initial Deposit"). Within one (1) business day after expiration of the Feasibility Period (as defined below) and provided that Buyer has not terminated this Agreement, Buyer shall deposit with Escrow Agent an additional earnest money deposit in the amount of Two Hundred Fifty Thousand Dollars ($250,000.00) (the "Additional Deposit") (collectively, the Initial Deposit and the Additional Deposit are referred to herein as the "Deposit"). The Deposit shall be applied towards the purchase price at the Close of Escrow (as defined below). The Deposit shall be invested pursuant to Buyer's written directions. The Deposit shall be held by the Escrow Agent for the mutual benefit of the parties hereto. In the event that this Agreement is not terminated pursuant to the terms of Sections 4, 5, 8 or 17 herein, the Deposit shall be nonrefundable except for the case of Seller's breach of this Agreement. In the event that Buyer terminates this Agreement pursuant to Sections 4, 5, 8 or 17 herein, the Deposit shall be returned to Buyer forthwith, and Seller shall promptly take such actions as may be reasonably necessary or appropriate to cause the Deposit to be returned to Buyer, including, without limitation, delivering to Escrow Agent such written instructions or authorizations as Escrow Agent may reasonably request in connection with Escrow Agent's return of the Deposit to Buyer. 3. Documents and Disclosures. Within five (5) business days from the Opening of Escrow, Seller shall deliver to Buyer copies of all non -privileged material documents pertaining to the Property that are in Seller's possession, including, but not limited to, copies of surveys, environmental reports, soils reports, engineering plans and studies, title information, contracts, warranties, agreements or leases affecting the Property, and demolition bids, if any. Buyer may cause the Escrow Holder to deliver to Buyer a report paid for by Buyer and prepared by a professional provider containing the natural hazard disclosures concerning the Property required by California law, and shall endeavor to have such report delivered to Buyer within five (5) business days after the Opening of Escrow. CADocuments and Settings\jharrisonEocal SettingsUemporary Internet Files\Content.Outlook\R2ZT9WY5\163968_1.DOC 2 01910/0001 163968.1 4. Title. Within five (5) business days from the Opening of Escrow (as defined above), Buyer' shall cause the Escrow Agent, which shall also act as the title company for the purchase and sale contemplated herein (Victor Greene, title officer) (the "Title Company"), to deliver to Buyer a preliminary title report on the Property, together with legible copies of all documents referred to therein (collectively, the "Title Report"). Buyer shall have twenty (20) days from its receipt of the Title Report within which to examine the same. If Buyer finds the state of title or any title exception to be unacceptable, Buyer shall, no later than the expiration of the twenty (20) day period, notify Seller in writing specifying the same ("Objections"). If Buyer fails to give Seller written notice of Objections before the expiration of the twenty (20) day period, the state of title and the title exceptions shown in the Title Report shall be deemed permitted exceptions (``Permitted Exceptions"). If Buyer has given Seller timely written notice of Objections then, Seller may use its reasonable efforts to cause such Objections to be cured, remedied or corrected within fifteen (15) business days following receipt of such notice (the ."Cure Period"); further provided, however, that Seller shall not, be obligated to cure any Objections nor be required to bring suit or expend any sums of money to cure, remedy or correct Objections. At either party's option, the Cure Period for elimination of Objections shall be extended until Close of Escrow. In the event that Seller does not eliminate or resolve any Objections within the Cure Period, as the same may be extended pursuant to the preceding sentence, then Buyer shall have the option of either: (i) proceeding to Closing and accepting the title without cure of the Objections, without reduction in the purchase price and without claim against Seller therefor, or (ii) canceling this Agreement in which event Seller shall return the Deposit to Buyer, whereupon both parties shall be released from all obligations under this Agreement, except for Buyer's indemnity obligation pursuant to Section 5 herein. Notwithstanding anything to the contrary expressed or implied herein, however, Buyer shall be deemed (without further notice to Seller) to have objected to any monetary lien or encumbrance shown in the Title Report (except for any lien for nondelinquent real property taxes); no such monetary lien or exception shall be deemed a Permitted Exception; and Seller shall cause any and all such monetary liens and exceptions to be eliminated as a lien or encumbrance on title to the Property no later than the Close of Escrow; provided, however, that in the event Seller does not cause such liens or exceptions to be eliminated, Buyer shall have the right to terminate this Agreement and the Deposit shall be returned to Buyer, whereupon both parties shall be released from all obligations under this Agreement. 5. Feasibility. CADocuments and Settings\jharrjson\Local Settings\Temporary Hiternet Files\Content.Outlook\R2ZT9WY5\163968_l.DOC 3 01910/0001 163968.1 Subject to the terms and conditions set forth herein, Buyer and Buyer's representatives shall have the right and shall be entitled to enter upon the Property, at reasonable times after the Opening of Escrow to inspect the Property and to determine the feasibility of acquiring the Property for Buyer's intended use. Buyer shall provide Seller with not less than one (1) business day prior notice of Buyer's intent for Buyer or its representatives to enter the Property. Unless Buyer determines in its sole and absolute discretion that acquisition of the Property is feasible and delivers written notice ("Feasibility Notice") waiving this contingency to Seller and Escrow Agent on or before the date which is forty-five (45) days after the Opening of Escrow (the "Feasibility Period"), then this Agreement and the Escrow shall automatically terminate and the Deposit shall be returned to Buyer. Buyer shall indemnify, defend and hold Seller, its affiliates, and their respective officers, directors, employees and agents harmless from any liability, cost or expense arising from injuries to persons or property caused by Buyer's or Buyer's representatives' activities on the Property pursuant to this Section 5. Buyer shall be responsible for returning the Property to the condition in which it was prior to the time of any entry. Buyer's obligations pursuant to this Section 5 shall survive the expiration or earlier termination of this Agreement. Seller's representative shall have the right, but not the obligation, to be in attendance during any Phase I environmental site assessment or other environmental inspection/investigation activities. Buyer shall notify Seller of Buyer's intention to enter the Property to conduct any environmental assessment or inspection activities no less than five (5) business days prior to the proposed date of entry. At least ten (10) business days prior to any environmental examination beyond that customarily performed in a Phase I environmental site assessment, including, without limitation, any soils; groundwater or other environmental examination, inspection or test requiring invasive methods ("Invasive Testing"), Buyer shall provide Seller with a written. plan describing the activities Buyer and/or its representative intend to conduct on the Property in connection with such Invasive Testing. Buyer's plan shall include, at a minimum: (i) a description of the proposed sampling locations; (ii) a description of how the samples will be collected, and (iii) the test methods that will be used to analyze the samples. Seller reserves the right to review and approve or disapprove and not allow, in its sole discretion, all examinations, inspections and tests to be conducted on the Property, including, without limitation, the locations of environmental samples. In the event .Seller disapproves and does not allow the Invasive Testing proposed by Buyer, then either party shall have the right to terminate this Agreement and the Escrow. If this Agreement is terminated, the Deposit shall be returned to Buyer. If Seller approves the Invasive Testing proposed by Buyer, Buyer shall permit Seller, at Seller's expense, to split any samples collected by Buyer or its representatives in the course of such Invasive Testing. Buyer agrees to provide Seller copies of all data, reports, calculations or other documents or information generated in connection with Buyer's environmental inspection. of the Property, including, without limitation, any Phase I Environmental Site Assessment report. All examinations, inspections, testing and related activities shall be conducted in C:\Documents and Settings\jharrisonEocal Settings\Temporary Internet Files\Content.Outlook\R2ZT9WY5\163968_1.DOC 4 01910/0001 163968.1 compliance with applicable laws and regulations. In no event shall the Feasibility Period be extended as a result of Buyer's environmental due diligence. To the extent that there are obligations under any service or other contracts related to the Property that are assignable to Buyer and that Buyer agrees to assume during the Feasibility Period at and as of the Close of Escrow, Seller shall assign them to Buyer, and Buyer shall assume them from Seller at and as of the Close of Escrow collectively, the "Assigned Property Contracts"). Buyer and its representatives shall treat all information regarding the Property as confidential (the "Confidential Information") and shall not disclose any Confidential Information to third parties without the prior written consent of Seller, unless required by law. In that connection, Seller understands that Buyer is subject to (among other laws) the California Public Records Act, and accordingly, Buyer shall be free to make such disclosures as such Act or other law (in Buyer's reasonable judgment) may require. Buyer's obligations under this provision to maintain the confidentiality of the Confidential Information shall expire upon the earlier of the Close of Escrow, or one (1) year after any termination or expiration of this Agreement. 6. Seller Representations and Warranties. Seller represents and warrants to Buyer as follows, which representations and warranties shall be deemed renewed and remade at and as of the Close of Escrow: (a) The execution, delivery and performance of this'Agreement by Seller have been duly authorized by the Board of Directors of Seller. Neither the execution of this Agreement nor the consummation of the transactions contemplated hereby will: (i) result in a breach of, or default under, any agreement to which Seller is bound, or (ii) violate any restrictions to which Seller is subject. (b) Except as disclosed in the Title Report, Seller has good and marketable title to, and is the record and beneficial 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. (c) Seller makes no covenant, representation or warranty as to the suitability of the Property for any purpose whatsoever or as to the physical condition of the Property, including, without limitation, the Property's environmental condition; provided, however, that to Seller's Knowledge, the Property (i) is not in violation of any applicable Environmental Law, including, without limitation, any law that regulates or pertains to Hazardous Materials, or (ii) contains no soil or groundwater that is contaminated with Hazardous Materials in a nature or quantity requiring investigation or remediation under applicable Environmental Laws, except as set forth in Schedule 6(c) attached hereto. For purposes of this Paragraph 6(c), "Seller's Knowledge" shall mean the actual knowledge, without further inquiry, of Jim Smith, General Manager of Seller's Los Angeles Mill. CADocuments and Settings\jharrisonEocal Settings\Temporary Internet Piles\Cantent.OUtlook\R2ZT9WY5\163968_1.DOC 5 01910/0001 163968.1 "Environmental Laws" shall mean any federal, state or local law regulating Hazardous Materials. "Hazardous Materials" shall mean (i) any "hazardous substance" as defined in the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42 U.S.C. Section 9601 et seq.) as amended, and the regulations promulgated pursuant thereto ("CERCLA"), or any similar state or local law; (ii) any "hazardous constituent" or "hazardous waste" as defined in the Resource Conservation and Recovery Act (42 U.S.C. Section 6901 et seq.), as amended, and the regulations promulgated pursuant thereto ("RCRA") ,or any similar state or local law; (iii) any petroleum, including crude oil or any extraction thereof; (iv) natural gas liquids, liquefied natural gas or synthetic gas usable for fuel; (v) any "hazardous chemical" as defined pursuant to 29 C.F.R. part 1910; or (vi) any asbestos, polychlorinated biphenyl ("PCB"), radioactive materials or isomer of dioxin, or any material or thing containing or composed of such substance. EXCEPT AS EXPRESSLY SET FORTH ABOVE, AND IN THE GRANT DEED, BUYER AGREES THAT IT IS ACQUIRING THE PROPERTY "AS -IS" AND "WHERE IS" CONDITION, FREE OF ANY OTHER REPRESENTATIONS OR WARRANTIES, EXPRESSED OR IMPLIED, WITH NO REPRESENTATIONS OR WARRANTIES OF ANY KIND, EXPRESSED OR IMPLIED, EITHER ORAL OR WRITTEN, MADE BY SELLER OR ANY AGENT OR REPRESENTATIVE OF SELLER WITH RESPECT TO THE ENVIRONMENTAL, PHYSICAL OR STRUCTURAL CONDITION OF THE PROPERTY OR WITH RESPECT TO THE EXISTENCE OR ABSENCE OF PETROLEUM, HAZARDOUS SUBSTANCES OR WASTES, OR POLLUTION CONDITIONS IN, ON, UNDER OR AFFECTING THE PROPERTY OR THE GROUND WATER THEREUNDER OR WITH RESPECT TO THE COMPLIANCE OF THE PROPERTY OR ITS OPERATION WITH ANY LAWS, ORDINANCES OR REGULATIONS OF ANY GOVERNMENT OR OTHER BODY. BUYER ACKNOWLEDGES AND AGREES THAT, EXCEPT AS EXPLICITLY STATED IN, THIS AGREEMENT, SELLER HAS NOT MADE AND DOES NOT MAKE ANY REPRESENTATIONS, WARRANTIES, OR COVENANTS OF ANY KIND OR CHARACTER WHATSOEVER, WHETHER EXPRESS OR IMPLIED, WITH RESPECT TO THE HABITABILITY, TENANTABILITY OR SUITABILITY FOR COMMERCIAL PURPOSES, MERCHANTABILITY, OR FITNESS OF THE PROPERTY FOR A PARTICULAR PURPOSE, ALL OF WHICH WARRANTIES SELLER HEREBY EXPRESSLY DISCLAIMS. (d) Seller is not a foreign person and is a "United States Person" as defined in Section 7701(a)(30) of the Internal Revenue Code of 1986, as amended. (e) The purchase. price- constitutes all consideration due Seller for the Property, and Seller has waived and relinquished any relocation assistance to which Seller may be entitled under local, state or federal law. CADocuments and Settings\jharrison\I=al Settings\Temporary Internet Files\Content.Outiook\R2ZT9WY5\163968_1.DOC 6 01910/0001 163968.1 (f) Seller understands, and has agreed that (i) nothing in this Agreement affects or limits the City Health Department's responsibilities in the administration of local, state and federal law with respect to remediation of the Property, if such remediation is necessary; (ii) 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 Section 8(iii) of this Agreement; and (iii) Buyer's approval of any contingency relative to the condition of the Property only includes approval by the Buyer (City of Vernon), and does not necessarily constitute approval by the City Health Department. (g) Buyer acknowledges and agrees that Seller has afforded Buyer ample time and opportunity to make such independent investigations, inquiries and evaluations as Buyer deems necessary and appropriate to determine the degree and scope of environmental and other risk that may exist in connection with acquisition of the Property. Buyer further acknowledges receipt of copies of the assessments, reports and correspondence regarding the Property which are identified on Schedule 6(c) hereof. In consideration of the foregoing, Buyer hereby waives, releases and covenants not to sue Seller or its employees, successors or affiliates for failure to satisfy the requirements of California Health and Safety Code Section 25359.7(a). This provision shall survive the expiration or earlier termination of this Agreement. Seller's representations and warranties set forth above shall survive for a period of one (1) year following the Close of Escrow, and Seller's maximum liability for any and all breaches of its representations and warranties set forth herein shall be limited, in the aggregate, to three percent (3%) of the Purchase Price. 7. Buyer Representations and Warranties. Buyer represents and warrants to Seller as follows: (a) Buyer is a public body corporate and politic duly incorporated and existing pursuant to the laws of the State of California and authorized to do business in the State of California. (b) Neither the execution of this Agreement nor the consummation of the transactions contemplated hereby (i) result in a beach of, or default under, any agreement to which Buyer is bound, or (ii) violate any restrictions to which Buyer is subject. (c) Buyer has conducted or will conduct its own due diligence and investigation with respect to the condition of the Property. Buyer acknowledges that as of Close of Escrow it shall have inspected the Property, having observed its physical characteristics and conditions, including, without limitation, subsurface conditions and solid and hazardous wastes and hazardous substances that may be present on, under or related to the Property. Buyer further acknowledges and agrees that except CADocuments and Settings\jharrisonEocal SettingsWemporary Internet Files\Content.Outlook\R2ZT9WY5\163968_1.DOC 7 01910/0001 163968.1 for Seller's express representations and warranties set forth in Section 6 hereof, the Property is to be sold and conveyed to, and purchased and accepted by Buyer, in its present condition, "AS IS," and, Buyer hereby assumes the risk that adverse physical and environmental characteristics and existing conditions may not have been revealed by its investigation. Except as set forth in Section 6 herein, Seller has not made any representations or warranties with respect to the Property upon which the Buyer has relied. 8. Conditions to Closing. (a) As conditions to Buyer's obligation to close: (i) all representations and warranties of Seller contained in Section 6 shall be true and accurate in all material respects as though said representations 'and warranties were made on and as of Close of Escrow. (ii) Seller shall have materially performed and complied with all covenants and conditions of this Agreement on Seller's part to be performed and complied with prior to or at Close of Escrow. (iii) Seller shall have implemented the "Phase II Soil Sampling Workplan Associated With Closure of Hazardous Materials Permit," which was prepared by Seller for the purpose of obtaining a Certificate of Closure for the Property pursuant to City of Vernon Ordinance 961, Article IV, Sec. 13.68 (the "Closure Certificate") and approved by the City of Vernon in September, 2007. (iv) concurrently with the Close of Escrow, the Title Company shall be prepared to issue, and shall issue to Buyer promptly after the Close of Escrow, a standard CLTA form of title insurance in the full amount of the purchase price showing title to the Property vested in Buyer and subject only to Permitted Exceptions (the "Title Policy"). (v) There shall not have been any material adverse change to the Property after the conclusion of the Feasibility Period. (vi) Seller shall have deposited into Escrow a certificate satisfying requirements of Section 1445 of the Internal Revenue Code (the "FIRPTA Certificate"), a California Form 593-C (the "CA Form 593-C"), and any other documents that Seller is reasonably required to deposit into Escrow elsewhere hereunder. (vii) No action or proceeding shall have been commenced by or against Seller under the federal bankruptcy code or any state law for the relief of debtors or for the enforcement of the rights of creditors. CADocuments and Settings\jharrison\Local Settings\Temporary Internet Files\Content.Outlook\R2ZT9WY5\163969_1.DOC 8 01910/0001 163968.1 Buyer, at its sole discretion, may waive any or all of the foregoing conditions. (b) As conditions to Seller's obligation to close: (i) All representations and warranties of Buyer contained in Section 7 shall be true and accurate in all respects as though said representations and warranties were made on and as of the Close of Escrow. (ii) Buyer shall have materially performed and complied with all covenants and conditions of this. Agreement on Buyer's part to be performed and complied with prior to or at Close of Escrow. (iii) Buyer shall use reasonable best efforts to cooperate with Seller in obtaining the Closure Certificate for the Property. (iv) Buyer shall have delivered the purchase price to the Escrow Agent. (v) No action or proceeding shall have been commenced by or against Buyer under the federal bankruptcy code or any state law for the relief of debtors or for the enforcement of the rights of creditors. Seller, at its sole discretion, may waive any or all of the foregoing conditions. 9. Prorations. (a) All utility charges, all income and expense from the Assigned Property Contracts and all nondelinquent personal property taxes and assessments levied against the Property for the tax year in which the Closing occurs shall be prorated between the parties at and as of the Close of Escrow. Real-estate taxes and assessments shall be prorated between Buyer and Seller at and as of the Close of Escrow based upon the most recent available information in the tax assessor's office. Seller shall be solely responsible for any and all taxes payable for any period preceding the Close of Escrow, including but not limited to any "roll back" or other taxes assessed or payable after the Close of Escrow with respect to any ownership or actions on the Property for any period prior to Closing. Escrow Holder is authorized and instructed to issue a letter at Close of Escrow to the Auditor - Controller's Office, Public Acquisition Unit/Tax Division, County of Los Angeles, 500 West Temple Street, Tax Section, Room #153, Los Angeles, CA 90012, requesting tax cancellation, and notifying such Office of the transfer of the Property to a body corporate and politic and to remit taxes due, if any as of the Close of Escrow. Upon Escrow Holder's receipt of a confirming acknowledgment; Escrow Holder will forward a copy to Buyer, subsequent to the Close of Escrow. On or before five (5) business days prior to the Closing Date, Escrow Holder shall advise Buyer and Seller of Escrow Holder's estimate of the net credit to Buyer or Seller, as the case may be, resulting from prorations under CADocuments and Settings\jharrison\Local Settings\Temporary Internet Files\Content.Outlook\R2ZT9WY5\163968_1.DOC 9 01910/0001 163968.1 this Agreement. If such prorations result in a net credit to Seller, Buyer shall deposit in Escrow in immediately available funds, along with the balance of the Purchase Price, the amount of such credit estimated by Escrow Holder. 10. Deliveries at Closing. (a) At the Close of Escrow, Seller shall deliver to Escrow Agent for delivery to Buyer the following documents: (i) A grant deed pursuant to which Seller conveys title of the Property to Buyer subject to the Permitted Exceptions. (ii) A Seller's affidavit in customary form and such other documents as may be reasonably required by the Title Company, executed by Seller certifying against any work done or supplies delivered to the Property which might be grounds for a materialman's or mechanic's lien. (iii) Any and all affidavits and other instruments and requirements which the Title Company shall reasonably require to issue the Title Policy. (iv) The FIRPTA Certificate and the CA Form 593-C. (b) At the Close of Escrow, Buyer will deliver to Seller the following: (i) The purchase price (net of all deductions and credits authorized herein) (the "Net Purchase Price"). (ii) Any and all affidavits and other instruments and requirements which the Title Company shall reasonably require. 11. Brokers. (a) At the Close of Escrow, Seller agrees to pay Grubb & Ellis ("Seller's Agent") a brokerage commission pursuant to their separate agreement. Seller has not dealt with any real estate broker in connection with this transaction other than Seller's Agent. Seller agrees to indemnify, defend and hold Buyer harmless against any claim for brokerage fees arising out of a breach of this representation and warranty. (b) At the Close of Escrow, Buyer agrees to pay Cushman & Wakefield ("Buyer's Agent") a brokerage commission pursuant to their separate agreement. Buyer represents and warrants that it has not dealt with any real estate broker in connection with this transaction other than Buyer's Agent. Buyer agrees to indemnify, defend and hold Seller harmless against any claim for brokerage fees arising out of a breach of this representation and warranty. CADocuments and Settings\jbarrisonEocal Settings\Temporary Internet Files\Content.Outlook\R2ZT9WY5\163968_l.DOC 10 01910/0001 163968.1 12. Closinix Costs. The parties shall share equally the Escrow Agent's escrow costs. Buyer shall be responsible for the insurance premium for the Title Policy, including any charges for any special endorsements or extended coverage requested by Buyer therefor, the insurance premium for a loan policy for its mortgage lender, if any, and all costs of inspection and due diligence, including, but not limited to any survey costs. Each party shall pay its own attorney fees and costs. Seller shall be responsible for all transfer and documentary fees and taxes. All other closing costs shall be apportioned or allocated between the parties in the manner customary in the county in which the Property is located. 13.Close Of Escrow. As soon as (a) Buyer and Seller have deposited into Escrow all of the ironies and documents that Buyer and Seller are required to deliver into Escrow, and (b) Escrow Agent is prepared to deliver to each party the documents and monies that each is to receive hereunder, including, without limitation, (i) upon recordation of the grant deed, the Title Policy to Buyer, and (ii) the Net Purchase Price to Seller, Escrow Holder shall do the following: (A) Cause the Title Company to record the grant deed in the official records of the Los Angeles County Recorder; (B) deliver to Buyer the FIRPTA Certificate, the CA Form 593-C, the Title Policy and any other documents that Seller is to deliver and Buyer is to receive hereunder through Escrow upon the Close of Escrow; (C) deliver to Seller any documents that Buyer is to deliver and Seller is to receive hereunder through Escrow upon the Close of Escrow; (D) disburse to Seller, by wire transfer to an account designated by Seller in writing, the Net Purchase Price; (E) disburse to the Title Company the premium for the Title Policy; (F) disburse Escrow Holder's fees to Escrow Holder; (G) disburse to Buyer any funds remaining in Escrow after the foregoing payments; and (H) obtain for each party conformed copies of all documents recorded in connection with the transactions contemplated hereunder. Escrow Holder's performance of the foregoing actions shall be deemed to occur simultaneously. The taking of such actions and the moment thereof are CADocuments and Settings\jharrison\Local Settings\Temporary Internet Files\Content.OUtlook\R2ZT9WY5\163968_1.DOC 11 01910/0001 163968.1 hereinabove and hereinafter called the "Close of Escrow" or the "Closing". The Close of Escrow shall occur no later than fifteen (15) days after expiration of the Feasibility Period; provided, however, that the date of the Closing may be accelerated at any time by mutual written agreement of Buyer and Seller. 14. Notices. Any notices required or permitted to be given under this Agreement shall be delivered by certified mail return receipt requested or overnight courier service, and addressed as follows: If to Seller: Smurfit -Stone Container Enterprises, Inc. Six CityPlace Drive Creve Coeur, Missouri 63141 Attention: Karen S. Copeland With a copy to: Armstrong Teasdale LLP One Metropolitan Square, Suite 2600 St. Louis, Missouri 63102 Attention: Mary M. Machon, Esq. If to Buyer: City of Vernon 4305 Santa Fe Avenue Vernon, CA 90058 Attention: Jeff A. Harrison, City Attorney With a copy to: Troy & Gould 1801 Century Park East, Floor 16 Los Angeles, CA 90071-2301 Attention: Charles L. Woltmann, Esq. 15. Governing Law. This Agreement shall be governed by the laws of the State of California without regard to the conflicts of laws principles. 16. Amendments. This Agreement may not be amended except by a further agreement in writing executed by the parties hereto. 17. Counterparts. This Agreement may be executed in two or more counterparts. Each executed counterpart shall be deemed an original hereof, but all counterparts together shall constitute one and the same instrument. CADocuments and Settings\jharrison\Local Settings\Temporary Internet Piles\Content.OUtlook\R2ZT9WY5\163968_1.DOC 12 01910/0001 163968.1 18. Possession, Risk of Loss. At the Close of Escrow, Seller shall deliver possession of the Property to Buyer free and clear of all third -party occupancies or rights to possession (other than Permitted Exceptions), and all risk of loss of, or damage to the Property from any source shall, at that time, pass to and become the responsibility of Buyer. Prior to Close of Escrow, the risk of loss shall remain with Seller. If all or part of any Property is materially destroyed or damaged by fire or other casualty prior to Close of Escrow, either party hereto may terminate this Agreement by providing written notice to the other party within thirty (30) days of such destruction or damage. In the event either party terminates this Agreement pursuant to this Section 18, the Deposit shall be returned to Buyer forthwith. 19. Attorney's Fees. In the event suit is brought or an attorney is retained by any party to this Agreement to seek interpretation or construction of any term or provision of this Agreement, to enforce the terms of this Agreement, to collect any money due, or to obtain any money damages or equitable relief for breach, the prevailing party shall be entitled to recover reimbursement for reasonable attorneys' fees, court costs, costs of investigation, and other related expenses. 20. Intended Agreement. This Agreement is the result of arms -length negotiations between parties of equivalent bargaining power and expresses the complete, actual, and intended agreement of the parties. This Agreement shall not be construed for or against either party as a result of its participation, or the participation of its counsel in the preparation and/or drafting of this Agreement or any exhibits hereto. 21. Relationship. This Agreement shall not be construed as creating a joint venture, partnership, or any other cooperative or joint arrangement between Buyer and Seller, and it shall be construed strictly in accordance with its terms. 22. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors in interest and permitted assigns. 23. Further Instruments and Documents. Each party hereto shall promptly upon the request of the other party or Escrow Agent, acknowledge and deliver to the other party or Escrow Agent any and all further CADocutnents and Settings\jharrisonTocal Settings\Temporary Internet Files\Content.Outlook\R2ZT9WY5\163968_1.DOC 13 01910/0001 163968.1 instruments and assurances reasonably requested or appropriate to evidence or give effect to the provisions of this Agreement or to satisfy Escrow Agent's requirements, including those exhibits which are not attached at the time the parties execute this Agreement. 24. Integration. This Agreement represents the entire agreement of the parties with respect to its subject matter, and all agreements, oral or written, entered into prior to this Agreement are revoked and superseded. No representations, warranties, inducements, or oral agreements, have been made by any of the parties except as expressly set forth herein or in other contemporaneous written agreements. 25. Severabilit_y. If any provision of this Agreement is declared void or unenforceable, such provision shall be deemed severed from this Agreement, and this Agreement shall otherwise remain in full force and effect. 26. Waiver. Failure of any party to exercise any right, remedy, or option arising out of a breach of this Agreement shall not be deemed a waiver of any right, remedy, or option with respect to any subsequent or different breach, or in the continuance of any existing breach. 27. Time of Essence. Time is hereby declared to be of the essence for the performance of all conditions and obligations under this Agreement. All periods terminating on a given day or date shall terminate at 5:00 p.m. (Pacific time) on such day or dates, and references to "days" shall refer to calendar days except for such references which are to "business days," which shall refer to days which are not Friday, Saturday, Sunday or a legal holiday. Notwithstanding the foregoing, if any period of time hereunder terminates on, or if any action is to be taken on a date which is, a Friday, Saturday, Sunday or legal holiday, the terminations of such period or the date by which such action must be taken shall be on the next succeeding business day. 28. Construction/Interpretation. The captions and paragraph headings used in this Agreement are for convenience and reference only and are not intended to define, limit, or describe the scope or intent of any provision of this Agreement. 29. Assignment. CADocuments and Set6ngsljharrison\Loca1 SeltingsUemporary Internet Files\Content.Outlook\R2ZT9WY5\163968_1.DOC 14 01910/0001 163968.1 Buyer shall not assign this Agreement without the prior written consent of the Seller. Notwithstanding the foregoing, in the event Buyer wishes to assign this Agreement to the Redevelopment Agency of the City of Vernon, Seller's consentshall not be unreasonably withheld. Any attempt to assign this Agreement other than as permitted hereunder by the Buyer without Seller's prior written consent shall render such assignment void and without effect. No assignment shall relieve Buyer of its obligations hereunder. 30.1031 Exchange, Either party ("exchanging party") may consummate the purchase or sale of the Property as part of a so-called like kind exchange (the "Exchange") pursuant to § 1031 of the Internal Revenue Code of 1986, as amended (the "Code"), provided that: (a) the Closing shall not be delayed or affected by reason of the Exchange nor shall the consummation or accomplishment of the Exchange be a condition precedent or condition subsequent to the exchanging party's obligations under this Contract; (b) the exchanging party shall effect the Exchange through an assignment of this Contract, or its rights under this Contract, to a qualified intermediary and the other party ("accommodating party") shall not be required to take an assignment of the purchase agreement for the relinquished property or be required to acquire or hold title to any real property for purposes of consummating the Exchange; and (c) the exchanging party shall pay any additional costs that would not otherwise have been incurred by the exchanging party or the accommodating party had the exchanging party not consummated its purchase through the Exchange. The accommodating party shall not by this agreement or acquiescence to the Exchange (i) have its rights under this Contract affected or diminished in any manner or (ii) be responsible for compliance with or be deemed to have warranted to the exchanging party that the Exchange in fact complies with § 1031 of the Code. [Signature Page Follows] CADocuments and Settings\jharrison\Local Settings\Temporary Internet Files\Content.OUtlook\R2ZT9WY5\163968_I.DOC 15 01910/0001 163968.1 Schedule 6(c) [To be completed once Seller obtains appropriate report] CADocuments and Settings\jharrisonEocal Settings\Temporary Internet Files\Content.Outlook\R2ZT9WYS\163968_1.DOC 17 01910/0001 163968.1 BUYER'S COMMISSION INSTRUCTIONS Date: November 1, 2007 ESCROW: 231119-TD PROPERTY: 2200 E. 55TH STREET & 2001 E. 57TH STREET VERNON, CA 90058 ESCROW OFFICER: TINA DE BOW From funds accruing to the account of the undersigned Buyer, or if necessary, Buyer will hand you funds required to pay the same, upon the close of above -numbered escrow only, for services rendered and commission due, you are to pay the following person and/or firms the following sums: CUSHMAN & WAKEFIELD OF CALIFORNIA 601 S. FIGUEROA STREET 47TH FLOOR LOS ANGELES CA 90017 ATTN: JOHN MCMILLAN TOTAL COMMISSION BEING PAID: THE SUM OF $345,000.00 $345,000.00 The above commission is pursuant to paragraph 11(b) of the Agreement for Purchase and Sale of Real Property dated October 18, 2007, by and between buyer and seller under the above -referenced escrow. Buyer: City of Vernon, a body corporate and politic By: Eric T. Fresch, Ci Administrator App*,y By: re s n, City Attorney The undersigned hereby acknowledge receipt of a copy hereof. Please mail payment to broker, unless payment is called for or delivered on the day the above escrow is closed. CUSHMAN & WAKEFIELD OF CALIFORNIA By: Broker License �"f:CY IH OJ CITY ATTORNEY'S OFFICE INTER -DEPARTMENT MEMORANDUM DATE: January 9, 2008 TO: Nelly Giron, City Clerk FROM: Jeff A. Harrison, City Attorne # RE: Recorded Grant Deed for Property Conveyed from Smurfit - Stone Container Enterprises, Inc. to City - 2200 E. 55th Street and 2001 E. 57th Street in the City of Vernon Dear Nelly: Attached is the original recorded Grant Deed for the above - referenced property for your retention. The transfer of the property was approved by Resolution No. 9439. JH:j1 Enclosure - Original Recorded Grant Deed This page is part of your document - DO NOT DISCARD - a 20072772772 OPa Oses: LIIIII IIIIIIIIII II - III IIIII IIIII IIIIIIIIIII IIIIIIIIIIIIII IIII IIII Recorded/Filed in Official Records Recorder's Office, Los Angeles County Fee: 0.00 California Tax: 0.00 12/18/07 AT 08:00AOther: 0.00 M Total: 0.00 I Title Company TITLE(S) : DEED A& 111VN�N. . . . . . . .......�aIIII�VII�N�I�II�V Assessor's Identification Number (AIN) To be completed by Examiner OR Title Company in black ink. Number of AIN's Shown i i -" E4U"3 THIS FORM IS NOT TO BE DUPLICATED - N RECORDING REQUESTED BY North American Title Company Order No. 6020708-62 Escrow No. 231119-TD WHEN RECORDED MAIL TO: City of Vernon 4305 Santa Fe Avenue Vernon, CA 90058 Attn: Jeff A. Harrison, City Attorney MAIL TAX STATEMENTS TO: Exempt Zoo�i��i��'�� THE SPACE ABOVE IS FOR RECORDER'S USE GRANT DEED APN: 6308-017-009; 6308-017-015 DOCUMENTARY TRANSFER TAX IS NONE — NOT REQUIRED SEC. 11922 REVENUE TAXATION CODE. FOR VALUABLE CONSIDERATION, RECEIPT OF WHICH IS HEREBY ACKNOWLEDGED, Smurfit -Stone Container Enterprises, Inc., a Delaware corporation (the "Grantor") HEREBY GRANT(S) TO: City of Vernon, a body corporate and politic (the "Grantee") The following described real property, in the City of Vernon, County of Los Angeles, State of California: The legal description is attached hereto, marked Exhibit "A" and by this reference incorporated herein and made a part hereof. Commonly known as 2200 E. 55`h Street and 2001 E. 57`h Street, Vernon, California. PAGE 1 01910/0049 166525.2 PAGE 2 CONTINUED FROM PAGE 1 GRANT DEED APN: 6308-017-009; 6308-017-015 ESCROW NO. 231119-TD ORDER NO.6020708-62 The foregoing grant of real 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. Date: December , 2007 "Grantor" Smurfit -Stone Container Enterprises, Inc., a Delaware corporation By: Name Prited: Craig A. Hunt Title: Sr. Vice President and Secretary STATE OF MISSOURI ) )SS. COUNTY OF ST. LOUIS ) ON 04 , BEFORE ME, A NOTARY PUBLIC IN AND FOR SAID S ATE, PERSONALLY APPEARED CRAIG A. HUNT, SR. VICE PRESIDENT AND SECRETARY OF SMURFIT-STONE CONTAINER ENTERPRISES, INC., PERSONALLY KNOWN TO ME OR PROVED TO ME ON THE BASIS OF SATISFACTORY EVIDENCE TO BE THE PERSON(S) WHOSE NAME(S) 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(S), OR THE ENTITY UPON BEHALF OF WHICH THE PERSON(S) ACTED, EXECUTED THE INSTRUMENT. WITNESS MY HAND AND OFFICIAL SEAL. otary . (NOTARY SEAL l,Ci-IIi7�0 � ) c NOTAW -' -f=xpires II'tioi! s UrM\��o Cminty Il�llrn'�` 01910/0049 166525.2 CERTIFICATE OF ACCEPTANCE This is to certify that the interest in real property conveyed by Grant Deed dated December /I , 2007, from Smurfit -Stone Container Enterprises, Inc., a Delaware corporation, for the property commonly known as: 2200 E. 55th Street and 2001 E. 57th Street, Vernon, CA, is hereby accepted by the undersigned officer(s) on behalf of the City Council of said City pursuant to authority conferred by Resolution No. 9439 of the City Council of said City adopted on October 15 _, 2007 and the City consents to the recordation thereof by its duly authorized officer(s). Date: l/-E',�u /fir 7 The City of Vernon By: Name: fx Eric -7:77T. Fresch Title: X" City Administrator TTEST: A. anuela Giron, ity lerk A PROVFPJAS TO FORM: N: Ie . Harrison Tile. City ttorney Assessor's Parcel Numbers: APN: 6308-017-009; 6308-017-015 P,d ^4 ,.N k 01910/0049 166525.2 f ORDER NO. 6020708-62 EXHIBIT "A" (LEGAL DESCRIPTION) PARCEL 1: THAT PORTION OF LOT 4 AND ALL OF LOT 5 OF TRACT 2585, IN THE CITY OF VERNON, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 28 PAGES 2 AND 3 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS A WHOLE AS FOLLOWS: BEGINNING AT THE SOUTHWEST CORNER OF LOT 5; THENCE ALONG THE WEST LINE OF LOTS 5 AND 4, NORTH 00 02' 15" WEST 408.88 FEET; THENCE NORTH 89° 11' 30" EAST 270.63 FEET TO THE EAST LINE OF SAID LOT 4; THENCE ALONG THE EAST LINE OF SAID LOTS 4 AND 5, SOUTH 00 02' 15" EAST 411.32 FEET TO THE SOUTHEAST CORNER OF SAID LOT 5; THENCE ALONG THE SOUTH LINE OF SAID LOT 5, SOUTH 890 42' 30" WEST 270.60 FEET TO THE POINT OF BEGINNING. EXCEPT FROM SAID LOT 5 THE SOUTHERLY 10 FEET THEREOF, CONVEYED TO THE CITY OF VERNON FOR ROAD PURPOSES. PARCEL 2: THAT PORTION OF LOT 3 OF TRACT 2585, IN THE CITY OF VERNON, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 28 PAGES 2 AND 3 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT A POINT IN THE EASTERLY LINE OF SAID LOT 3, DISTANT THEREON NORTH 0° 35' 15" WEST, 119 FEET FROM THE SOUTHEAST CORNER OF SAID LOT; THENCE SOUTH 890 42' 30" WEST, 160.93 FEET; THENCE NORTH 01 02' WEST 203 FEET; THENCE NORTH 890 42' 30" EAST 158.94 FEET, MORE OR LESS, TO THE EASTERLY LINE OF SAID LOT 3; THENCE SOUTH 00 35' 15" EAST 203 FEET TO THE POINT OF BEGINNING. SAID PROPERTY BEING THE SAME PROPERTY DESCRIBED IN DEED TO LOWELL M. HAMBRIC, RECORDED IN BOOK 6617 PAGE 880, OFFICIAL RECORDS OF SAID COUNTY. PARCEL 3: THE SOUTHERLY 119 FEET OF SAID LOT 3 OF TRACT 2585, IN THE CITY OF VERNON, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 28 PAGES 2 AND 3 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. EXCEPT THEREFROM THE SOUTHERLY 10 FEET THEREOF, CONVEYED TO THE CITY OF VERNON FOR ROAD PURPOSES. PARCEL 4: THAT PORTION OF SAID LOT 3 OF TRACT 2585, IN THE CITY OF VERNON, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 28 PAGE 2 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: bRDER NO. 6020708-62 BEGINNING AT THE INTERSECTION OF THE SOUTHERLY LINE OF EAST 55TH STREET (60 FEET WIDE) WITH THE EASTERLY LINE OF SAID LOT 3; THENCE SOUTH 891 38' WEST ALONG SAID SOUTHERLY LINE 24 FEET, MORE OR LESS, TO THE INTERSECTION WITH A LINE DRAWN PARALLEL WITH AND DISTANT 24 FEET, MEASURED AT RIGHT ANGLES FROM THE EASTERLY LINE OF SAID LOT 3; THENCE SOUTH 00 35' 15" EAST ALONG SAID PARALLEL LINE 248.03 FEET; THENCE PARALLEL WITH SAID SOUTHERLY LINE OF EAST 55TH STREET, NORTH 890 38' EAST 24 FEET, MORE OR LESS, TO THE EASTERLY LINE OF SAID LOT 3; THENCE NORTH 00 35' 15" WEST ALONG SAID EASTERLY LINE 248.03 FEET, MORE OR LESS, TO THE POINT OF BEGINNING. PARCEL 5: THAT PORTION OF SAID LOT 3 OF TRACT 2585, IN THE CITY OF VERNON, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 28 PAGES 2 AND 3 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT A POINT ON THE EAST LINE OF SAID LOT, DISTANT NORTH THEREON 322 FEET FROM THE SOUTHEAST CORNER THEREOF; THENCE NORTH ALONG SAID EAST LINE TO THE SOUTHEAST CORNER OF THE TRACT OF LAND CONVEYED TO CALIFORNIA-OREGON PAPER MILLS BY DEED RECORDED IN BOOK 11143 PAGE 79, OFFICIAL RECORDS; THENCE SOUTH 891 39' WEST ALONG THE SOUTH LINE OF SAID LAND AND ALONG THE SOUTH LINE OF THE TRACT OF LAND CONVEYED TO PIONEER PAPER COMPANY BY DEED RECORDED IN BOOK 11078 PAGE 282, OFFICIAL RECORDS, 268.65 FEET; THENCE NORTH 00 02' 15" WEST ALONG THE WESTERLY LINE OF SAID LAST MENTIONED TRACT OF LAND, 32 FEET; THENCE SOUTH 890 39' WEST 7.84 FEET TO THE WEST LINE OF SAID LOT 3; THENCE SOUTHERLY ALONG THE WEST LINE OF SAID LOT TO A POINT DISTANT NORTHERLY THEREON 119 FEET FROM THE SOUTH LINE OF SAID LOT; THENCE EASTERLY PARALLEL WITH SAID SOUTH LINE TO THE SOUTHWEST CORNER OF THE TRACT OF LAND CONVEYED TO LOWELL M. HAMBRIC BY DEED RECORDED IN BOOK 6617 PAGE 88, OFFICIAL RECORDS; THENCE NORTH 00 02' WEST ALONG THE WEST LINE OF SAID LAST MENTIONED TRACT OF LAND, 203 FEET TO THE NORTHWEST CORNER THEREOF; THENCE NORTH 890 42' 30" EAST, ALONG THE NORTH LINE OF SAID LAND, 158.94 FEET, MORE OR LESS, TO THE POINT OF BEGINNING. PARCEL 6: LOT 2 OF TRACT 2585, IN THE CITY OF VERNON, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 28 PAGES 2 AND 3 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. EXCEPT THEREFROM THE EASTERLY 500 FEET THEREOF. PARCEL 7: THAT PORTION OF LOT 1 OF TRACT 2585, IN THE CITY OF VERNON, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 28 PAGES 2 AND 3 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT THE NORTHWEST CORNER OF SAID LOT 1; THENCE ALONG THE NORTHERLY LINE OF SAID LOT, NORTH 890 39' 00" EAST 450 FEET; THENCE PARALLEL WITH THE WESTERLY LINE OF SAID LOT, SOUTH 00 35' 15" EAST 389 FEET TO A POINT IN THE SOUTHERLY LINE OF SAID LOT 1; THENCE ALONG SAID SOUTHERLY LINE SOUTH 890 30' 00" WEST 450 FEET TO THE SOUTHWEST CORNER OF SAID LOT; THENCE ALONG THE WESTERLY LINE OF SAID LOT 1, NORTH 01 35' 15" WEST 389 FEET TO THE POINT OF BEGINNING. Giron, Nell From: Tina DeBow [tdebow@nat.com] Sent: Tuesday, April 08, 2008 2:32 PM To: Giron, Nelly Cc: bphinney@nat.com Subject: closed Order 6020708-62 Deed of Trust recorded 12/19/07 2200 E. 55th St, and 2001 E. 57th St., Vernon, CA lid M TINA_DE_BOW_20 TINA_DE_BOW_20 2008 California All )80408_142349.pd.180408_142418.pd.. Purpose Ac... Hi Manuela. It's been busy today, and I apologize for the delay in sending this communication w/attached document. I also have attached the legal description from our file. As I understand it .from our title operations department, the county misplaced one of the pages of the legal description when recording the document. We need to re-record the document, in order to do that the county requires an updated notary acknowledgement. Please use the attached updated notary format or utilize your separate acknowledgment form as long as it meets the 2008 requirements, and please if you would, put all the information on the acknowledgement as per the attached information, however please date it as of the date you are completing the replacement form. Please mail it to my attention at the address below. If you have any questions, call Bob Phinney at 818 240-4912 ext. 2203. Thanks again. Tina DeBow Senior Escrow Officer North American Title Company 101 North Brand Blvd., #1800 Glendale, CA 91203 _ Phone: 818 551-5370 Fax: 818 551-5327 -----Original Message ----- From: Tina De Bow [mailto:TDeBow@nat.com] Sent: Tuesday, April 08, 2008 3:24 PM To: Tina De Bow Subject: Scanned image from 914SharpEscrowl DEVICE NAME: CA071COP01 DEVICE MODEL: SHARP AR-M620N LOCATION: Glendale 914 Escrow lst Flt Back Area FILE FORMAT: PDF MMR(G4) RESOLUTION: 300dpi x 300dpi Attached file is scanned image in PDF format. This file can be read by Adobe Acrobat Reader. The reader can be downloaded from the following URL: http://www.adobe.com/ [tiInF TON AMPalr,AN TITi F rnMPANY RECORDA ION REQUESTED BY: � 62c7��'�`2 WHEN RECORDED MAIL TO: East West Bank 9300 Flair Drive, 6th Floor El Monte, CA 91731 12119101 111111111111111111111111111111111111111111111111111111111111 20072784492 SEND TAX NOTICES' TO: City of Vernon, a body corporate and politic 4305 Santa Fe Avenue Vernon, CA 90058 FOR RECORDER'S USE ONLY DEED OF TRUST THIS DEED OF TRUST is dated December 13, 2007, among City of Vernon, a body corporate and politic, whose address is 4305 Santa Fe Avenue, Vernon, CA 90058 ("Trustor"); East West Bank, whose address is 9300 Flair Drive, 6th Floor, El Monte, CA 91731 (referred to below sometimes as "Lender" and sometimes as "Beneficiary"); and EAST WEST INVESTMENT INC„ A CALIFORNIA CORPORATION, whose address is 135 N. LOS ROBLES AVENUE, PASADENA, CA 91101 (referred to below as "Trustee"), CONVEYANCE AND GRANT. For valuable consideration, Trustor irrevocably grants, transfers and assigns to Trustee in trust, with power of sale, for the benefit of Lender as Beneficiary, all of Trustor's right, title, and interest in and to the following described real property, together with all existing or subsequently erected or affixed buildings, improvements and fixtures; all easements, rights of way, and appurtenances; all water, water rights and ditch rights (including stock in utilities with ditch or irrigation rights); and all other rights, royalties, and profits relating to the real property, including without limitation all minerals, oil, gas, geothermal and similar matters, (the "Real Property") located in Los Angeles County, State of California: See Exhibit "A", which is attached to this Deed of Trust and made a part of this Deed of Trust as if fully set forth herein. The Real Property or its address is commonly known as 2200 East 55th Street and 2001 East 57th Street, Vernon, CA 90058, The Assessor's Parcel Number for the Real Property is 6308-017-009 and 6308-017-015. Trustor presently assigns to Lender (also known as Beneficiary in this Deed of Trust) all of Trustor's right, title, and interest in and to all present and future leases of the Property and all Rents from the Property. This is an absolute assignment of Rents made in connection with an obligation secured by real property pursuant to California Civil Code Section 2938. In addition, Trustor grants to Lender a Uniform Commercial Code security interest in the Personal Property and Rents, THIS DEED OF TRUST, INCLUDING THE ASSIGNMENT OF RENTS AND THE SECURITY INTEREST IN THE RENTS AND PERSONAL PROPERTY, IS GIVEN TO SECURE (A) PAYMENT OF THE INDEBTEDNESS AND (B) PERFORMANCE OF ANY AND ALL OBLIGATIONS UNDER THE NOTE, THE RELATED DOCUMENTS, AND THIS DEED OF TRUST. THIS DEED OF TRUST IS GIVEN AND ACCEPTED ON THE FOLLOWING TERMS: TRUSTOR'S REPRESENTATIONS AND WARRANTIES. Trustor warrants that: (a) this Deed of Trust is executed at Borrower's request and not at the request of Lender; lb) Trustor has the full power, right, and authority to enter into this Deed of Trust and to hypothecate the Property; (c) the provisions of this Deed of Trust do not conflict with, or result in a default under any agreement or other instrument binding upon Trustor and do not result in a violation of any law, regulation, court decree or order applicable to Trustor; Id) Trustor has established adequate means of obtaining from Borrower on a continuing basis information about Borrower's financial condition; and (e) Lender has made no representation to Trustor about Borrower (including without limitation the creditworthiness of Borrower). TRUSTOR'S WAIVERS. Except as prohibited by applicable law, Trustor waives any right to require Lender to la) make any presentment, protest, demand, or notice of any kind, including notice of change of any terms of repayment of the Indebtedness, default by Borrower or any other guarantor or surety, any action or nonaction taken by Borrower, Lender, or any other guarantor or surety of Borrower, or the creation of new or additional Indebtedness; lb) proceed against any. person, including Borrower, before proceeding against Trustor; (c► proceed against any collateral for the Indebtedness, including Borrower's collateral, before proceeding against Trustor; (d) apply any payments or proceeds received against the Indebtedness in any order; (a) give notice of the terms, time, and place of any sale of any collateral pursuant to the Uniform Commercial Code or any other law governing such sale; (f) disclose any information about the Indebtedness, Borrower, any collateral, or any other guarantor or surety, or about any action or nonaction of Lender; or (g) pursue any remedy or course of action in Lender's power whatsoever. Trustor also waives any and all rights or defenses arising by reason of IN any disability or other defense of Borrower, any other guarantor or surety or any other person; (i) the cessation from any cause whatsoever, other than payment in full, of the Indebtedness; (j) the application of proceeds of the Indebtedness by Borrower for purposes other than the purposes understood and intended by Trustor and Lender; (k) any act of omission or commission by Lender which directly or indirectly results in or contributes to the discharge of Borrower or any other guarantor or surety, or the Indebtedness, or the loss or release of any collateral by operation of law or otherwise; (1) any Description: Los Angeleo,CA Document—Year.Docr= 2007.2784492 Page: 1 of 11 Order: 6021044 Comment: ' N Loan No, 29216 DEED OF TRUST (Continued) Page 2 statute of limitations in any action under this Deed of Trust or on the Indebtedness; or (m) any modification or change in terms of the Indebtedness, whatsoever, including without limitation, the renewal, extension, acceleration, or other change in the time payment of the Indebtedness is due and any change in the interest rate. Truster waives all rights and defenses arising out of an election of remedies by Lender, even though that election of remedies, such as non -judicial foreclosure with respect to security for a guaranteed obligation, has destroyed Trustor's rights of subrogation and reimbursement against Borrower by the operation of Section 560d of the California Code of Civil Procedure, or otherwise. Trustor waives all rights and defenses that Truster may have because Borrower's obligation is secured by real property. This means among other things: (1) Lender may collect from Trustor without first foreclosing on any real or personal property collateral pledged by Borrower, (2) If Lender forecloses on any real property collateral pledged by Borrower: (A) The amount of Borrower's obligation may be reduced only by the price for which the collateral is sold at the foreclosure sale, even if the collateral is worth more than the sale price. iB) Lender may collect from Trustor even if Lender, by foreclosing on the real property collateral, has destroyed any right Trustor may have to collect from Borrower. This is an unconditional and irrevocable waiver of any rights and defenses Trustor may have because Borrower's obligation is secured by real property. These rights and defenses include, but are not limited to, any rights and defenses based upon Section 580a, 580b, 580d, or 726 of the Code of Civil Procedure. Trustor understands and agrees that the foregoing waivers are unconditional and irrevocable waivers of substantive rights and defenses to which Trustor might otherwise be entitled under state and federal law. The rights and defenses waived include, without limitation, those provided by California laws of suretyship and guaranty, anti -deficiency laws, and the Uniform Commercial Code. Truster acknowledges that Trustor has provided these waivers of rights and defenses with the intention that they be fully relied upon by Lender. Trustor further understands and agrees that this Deed of Trust is a separate and independent contract between Trustor and Lender, given for full and ample consideration, and is enforceable on its own terms, Until all Indebtedness is paid in full, Trustor waives any right to enforce any remedy Trustor may have against Borrower's or any other guarantor, surety, or othef person, and further, Truster waives any right to participate in any collateral for the indebtedness now or hereafter held by Lender. PAYMENT AND PERFORMANCE. Except as otherwise provided in this Deed of Trust, Borrower shall pay to Lender all Indebtedness secured by this Deed of Trust as it becomes due, and Borrower and Trustor shall perform all their respective obligations under the Note, this Deed of Trust, and the Related Documents. POSSESSION AND MAINTENANCE OF THE PROPERTY. Borrower and Trustor agree that Borrower's and Trustor's possession and use of the Property shall be governed by the following provisions: Possession and Use. Until the occurrence of an Event of Default, Trustor may (1) remain In possession and control of the Property; (2) use, operate or manage the Property; and (3) collect the Rents from the Property. Duty to Maintain. Trustor shall maintain the Property in tenantable condition and promptly perform all repairs, replacements, and maintenance necessary to preserve its value. Compliance With Environmental Laws. Trustor represents and warrants to Lender that: 01, During the period of Trustor's ownership of the Property, there has been no use, generation, manufacture, storage, treatment, disposal, release or threatened release of any Hazardous Substance by any person on, under, about or from the Property; (2) Trustor has no knowledge of, or reason to believe that there has been, except as previously disclosed to and acknowledged by Lender in writing, (a) any breach or violation of any Environmental Laws, (b) any use, generation, manufacture, storage, treatment, disposal, release or threatened release of any Hazardous Substance on, under, about or from the Property by any prior owners or occupants of the Property, or (c) any actual or threatened litigation or claims of any kind by any person relating to such matters; and (3) Except as previously disclosed to and acknowledged by Lender in writing, la) neither Trustor nor any tenant, contractor, agent or other authorized user of the Property shall use, generate, manufacture, store, treat, dispose of or release any Hazardous Substance on, under, about or from the Property; and (b) any such activity shall be conducted in compliance with all applicable federal, state, and local laws, regulations and ordinances, including without limitation all Environmental Laws. Trustor authorizes Lender and its agents to enter upon the Property to make such inspections and tests, at Trustor's expense, as Lender may deem appropriate to determine compliance of the Property with this section of the Deed of Trust. Any inspections or tests made by Lender shall be for Lender's purposes only and shall not be construed to create any responsibility or liability on the part of Lender to Trustor or to any other person, The representations and warranties contained herein are based on Trustor's due diligence in investigating the Property for Hazardous Substances. Trustor hereby (1) releases and waives any future claims against Lender for indemnity or contribution in the event Trustor becomes liable for cleanup or other costs under any such laws; and (2) agrees to indemnify, defend, and hold harmless Lender against any and all claims, losses, liabilities, damages, penalties, and expenses which Lender may directly or indirectly sustain or suffer resulting from a breach of this section of the Deed of Trust or as a consequence of any use, generation, manufacture, storage, disposal, release or threatened release occurring prior to Trustor's ownership or interest in the Property, whether or not the same was or should have been known to Trustor. The provisions of this section of the Deed of Trust, including the obligation to indemnify and defend, shall survive the payment of the Indebtedness and the satisfaction and reconveyance of the lien of this Deed of Trust and shall not be affected by Lender's acquisition of any interest in the Property, whether by foreclosure or otherwise. Nuisance, Waste. ' Trustor shall not cause, conduct or permit any nuisance nor commit, permit, or suffer any stripping of or waste on or to the Property or any portion of the Property. Without limiting the generality of the foregoing, Trustor will not remove, or grant to any other party the right to remove, any timber, minerals (Including oil and gas), coal, clay, scoria, soil, gravel or rock products without Lender's prior written consent. Removal of Improvements. Trustor shall not demolish or remove any Improvements from the Real Property without Lender's prior written consent. As a condition to the removal of any Improvements, Lender may require Trustor to make arrangements satisfactory to Lender to replace such Improvements with Improvements of at least equal value. Lender's Right to Enter. Lender and Lender's agents and representatives may antes upon the Real Property at all reasonable times to attend to Lender's interests and to inspect the Real Property for purposes of Trustor's compliance with the terms and conditions of this Deed of Trust. Compliance with Governmental Requirements. Trustor shall promptly comply with all laws, ordinances, and regulations, now or Description: Los Angeles,CA Document-Year.Doc= 2007.2784492 Page: 2 of 11 Order: 6021044 Comment: DEED OF TRUST Loan No: 292$8 (Continued) Page 3 hereafter in effect, of all governmental authorities applicable to the use or occupancy of the Property, Including without limitation, the Americans With Disabilities Act. Truster may contest in good faith any such law, ordinance, or regulation and withhold compliance during any proceeding, including appropriate appeals, so long as Trustor has notified Lender in writing prior to doing so and so long as, in Lender's sole opinion, Lender's interests in the Property are not jeopardized. Lender may require Trustor to post adequate security or a surety bond, reasonably satisfactory to Lender, to protect Lender's interest. Duty to Protect. Trustor agrees neither to abandon or leave unattended the Property. Trustor shall do all other acts, in addition to those acts set forth above In this section, which from the character and use of the Property are reasonably necessary to protect and preserve the Property. DUE ON SALE - CONSENT BY LENDER. Lender may, at Lender's option, declare immediately due and payable all sums secured by this Deed of Trust upon the sale or transfer, without Lender's prior written consent, of all or any part of the Real Property, or any interest in the Real Property. A "sale or transfer" means the conveyance of Real Property or any right, title or interest in the Real Property; whether legal, beneficial or equitable; whether voluntary or involuntary; whether by outright sale, deed, installment sale contract, land contract, contract for deed, leasehold interest with a term greater than three (3) years, lease -option contract, or by sale, assignment, or transfer of any beneficial Interest in or to any land trust holding title to the Real Property, or by any other method of conveyance of an interest in the Real Property. If any Trustor is a corporation, partnership or limited liability company, transfer also includes any change in ownership of more than twenty-five percent 125%) of the voting stock, partnership Interests or limited liability company interests, as the case may be, of such Trustor. However, this option shall not be exercised by Lender if such exercise is prohibited by applicable law. TAXES AND LIENS. The following provisions relating to the taxes and liens on the Property are part of this Deed of Trust: Payment. Trustor shall pay when due (and in all events at least ten (10) days prior to delinquency) all taxes, special taxes, assessments, charges (including water and sewer), fines and impositions levied against or on account of the Property, and shall pay when due all claims for work done on or for services rendered or material furnished to the Property. Trustor shall maintain the Property free of all liens having priority over or equal to the interest of Lender under this Deed of Trust, except for the lien of taxes and assessments not due and except as otherwise provided in this Deed of Trust. Right to Contest. Trustor may withhold payment of any tax, assessment, or claim in connection with a good faith dispute over the obligation to pay, so long as Lender's interest in the Property is not jeopardized. If a lien arises or is filed as a result of nonpayment, Trustor shall within fifteen 05) days after the lien arises or, if a lien is filed, within fifteen (15) days after Trustor has notice of the filing, secure the discharge of the lien, or if requested by Lender, deposit with Lender cash or a sufficient corporate surety bond or other security satisfactory to Lender in an amount sufficient to discharge the lien plus any costs and attorneys' fees, or other charges that could accrue as a result of a foreclosure or sale under the lien. In any contest, Trustor shall defand Itself and Lender and shall satisfy any adverse judgment before enforcement against the Property. Trustor shall name Lender as an additional obligee under any surety bond furnished In the contest proceedings. Evidence of Payment. Trustor shall upon demand furnish to Lender satisfactory evidence of payment of the taxes or assessments and shall authorize the appropriate governmental official to deliver to Lender at any time a written statement of the taxes and assessments against.the Property. Notice of Construction. Trustor shall notify Lender at least fifteen 0 5) days before any work is commenced, any services are furnished, or any materials are supplied to the Property, if any mechanic's lien, materialmen's lien, or other lien could be asserted on account of the work, services, or materials and the cost exceeds $25,000.00. Trustor will upon request of Lender furnish to Lender advance assurances satisfactory to Lender that Trustor can and will pay the cost of such improvements, PROPERTY DAMAGE INSURANCE. The following provisions relating to insuring the Property are a part of this Deed of Trust. Maintenance of Insurance. Trustor shall procure and maintain policies of fire insurance with standard extended coverage endorsements on a replacement basis for the full insurable value covering all Improvements on the Real Property in an amount sufficient to avoid application of any coinsurance clause, and with a standard mortgagee clause in favor of Lender. Trustor shall also procure and maintain comprehensive general liability insurance in such coverage amounts as Lender may request with Trustee and Lender being named as additional insureds in such liability insurance policies. Additionally, Trustor shall maintain such other insurance, including but not limited to hazard, business interruption, and boiler insurance, as Lender may reasonably require. Notwithstanding the foregoing, in no event shall Trustor be required to provide hazard insurance In excess of the replacement value of the improvements on the Real Property. Policies shall be written in form, amounts, coverages and basis reasonably acceptable to Lender and issued by a company or companies reasonably acceptable to Lender. Trustor, upon request of Lender, will deliver to Lender from time to time the policies or certificates of insurance in form satisfactory to Lender, including stipulations that coverages will not be cancelled or diminished without at least thirty (30) days prior written notice to Lender. Each insurance policy also shall include an endorsement providing that coverage in favor of Lender will not be impaired in any way by any act, omission or default of Trustor or any other person. Should the Real Property be located in an area designated by the Director of the Federal Emergency Management Agency as a special flood hazard area, Trustor agrees to obtain and maintain Federal Flood Insurance, if available, within 45 days after notice is given by Lender that the Property is located in a special flood hazard area, for the full unpaid principal balance of the loan and any prior liens on the property securing the loan, up to the maximum policy limits set under the National Flood Insurance Program, or as otherwise required by Lender, and to maintain such insurance for the term of the loan, Application of Proceeds. Trustor shall promptly notify Lender of any loss or damage to the Property if the estimated cost of repair or %4 replacement exceeds $25,000.00. Lender may make proof of loss if Trustor fails to do so within fifteen (15) days of the casualty. If in Lender's sole judgment Lender's security interest in the Property has been impaired, Lender may, at Lender's election, receive and retain the proceeds of any insurance and apply the proceeds to the reduction of the Indebtedness, payment of any lien affecting the Property, or the restoration and repair of the Property. If the proceeds are to be applied to restoration and repair, Trustor shall repair or replace the damaged or destroyed Improvements in a manner satisfactory to Lender. Lender shall, upon satisfactory proof of such expenditure, pay or reimburse Trustor from the proceeds for the reasonable cost of repair or restoration if Trustor is not in default under this Deed of Trust. Any proceeds which have not been disbursed within 180 days after their receipt and which Lender has not committed to the repair or restoration of the Property shall be used first to pay any amount owing to Lender under this Deed of Trust, then to pay accrued interest, and the remainder, If any, shall be applied to the principal balance of the Indebtedness. If Lender holds i N Description: Los Angeles,CA Document—Year.DooXD 2007.2784492 Page: 3 of 11 Order: 6021044 Comment: DEED OF TRUST Loan No, 292118 (Continued) Page 4 any proceeds after payment in full of the Indebtedness, such proceeds shall be paid to Trustor as Trustor's interests may appear. Trustor's Report on Insurance. Upon request of Lender, however not more than once a year, Trustor shall furnish to Lender a report on each existing policy of Insurance showing: (1) the name of the insurer; (2) the risks insured; (3) the amount of the policy; (4) the property insured, the then current replacement value of such property, and the manner of determining that value; and (5) the expiration date of the policy. Trustor shall, upon request of Lender, have an independent appraiser satisfactory to Lender determine the cash value replacement cost of the Property. LENDER'S EXPENDITURES. If any action or proceeding is commenced that would materially affect Lender's interest in the Property or if Trustor fails to comply with any provision of this Deed of Trust or any Related Documents, including but not limited to Trustor's failure to discharge or pay when due any amounts Trustor is required to discharge or pay under this Deed of Trust or any Related Documents, Lender on Trustor's behalf may (but shall not be obligated to) take any action that Lender deems appropriate, including but not limited to discharging or paying all taxes, liens, security interests, encumbrances and other claims, at any time levied or placed on the Property and paying all costs for insuring, maintaining and preserving the Property, All such expenditures incurred or paid by Lender for such purposes will then bear interest at the rate charged under the Note from the date incurred or paid by Lender to the date of repayment by Trustor. All such expenses will become a part of the Indebtedness and, at Lender's option, will (A) be payable on demand; (B) be added to the balance of the Note and be apportioned among and be payable with any installment payments to become due during either 11) the term of any applicable insurance policy; or 14 the remaining term of the Note; or (C) be treated as a balloon payment which will be due and payable at the Note's maturity. The Deed of Trust also will secure payment of these amounts. Such right shall be in addition to all other rights and remedies to which Lender may be entitled upon Default. WARRANTY; DEFENSE OF TITLE. The following provisions relating to ownership of the Property are a part of this Dead of Trust: Title. Trustor warrants that: (a) Trustor holds good and marketable title of record to the Property in fee simple, free and clear of all liens and encumbrances other than those set forth in the Real Property description or in any title insurance policy, title report, or final title opinion issued in favor of, and accepted by, Lender in connection with this Deed of Trust, and (b) Trustor has the full right, power, and authority to execute and deliver this Deed of Trust to Lender. Defense of Title. Subject to the exception in the paragraph above, Trustor warrants and will forever defend the title to the Property against the lawful claims of all persons. In the event any action or proceeding is commenced that questions Trustor's title or the interest of Trustee or Lender under this Deed of Trust, Trustor shall defend the action at Trustor's expense. Trustor may be the nominal party in such proceeding, but Lender shall be entitled to participate in the proceeding and to be represented in the proceeding by counsel of Lender's own choice, and Trustor will deliver, or cause to be delivered, to Lander such Instruments as Lender may request from time to time to permit such participation, Compliance With Laws. Trustor warrants that the Property and Trustor's use of the Property complies with all existing applicable laws, ordinances, and regulations of governmental authorities. Survival of Representations and Warranties. All representations, warranties, and agreements made by Trustor in this Deed of Trust shall survive the execution and delivery of this Deed of Trust, shall be continuing in nature, and shall remain in full force and effect until such time as Borrower's Indebtedness shell be paid in full. CONDEMNATION. The following provisions relating to eminent domain and inverse condemnation proceedings are a part of this Deed of Trust: Proceedings If any eminent domain or inverse condemnation proceeding is commenced affecting the Property, Trustor shall promptly notify Lender in writing, and Trustor shall promptly take such steps as may be necessary to pursue or defend the action and obtain the award. Trustor may be the nominal party in any such proceeding, but Lender shall be entitled, at its election, to participate in the proceeding and to be represented in the proceeding by counsel of its own choice, and Trustor will deliver or cause to be delivered to Lender such instruments and documentation as may be requested by Lender from time to time to permit such participation. Application of Net Proceeds. If any award is made or settlement entered into in any condemnation proceedings affecting all or any part of the Property or by any proceeding or purchase in lieu of condemnation, Lender may at its election, and to the extenYperm(tted. by law, require that all or any portion of the award or settlement be applied to the Indebtedness and to the repayment of all reasonable costs, expenses, and attorneys' fees incurred by Trustee or Lender In connection with the condemnation proceedings. IMPOSITION OF TAXES, FEES AND CHARGES BY GOVERNMENTAL AUTHORITIES. The following provisions relating to governmental taxes, fees and charges are apart of this Deed of Trust: Current Taxes, Fees and Charges. Upon request by Lender, Trustor shall execute such documents in addition to this Deed of Trust and take whatever other action is requested by Lender to perfect and continue Lender's lien on the Real Property, Trustor shall reimburse Lender for all taxes, as described below, together with all expenses incurred in recording, perfecting or continuing this Deed of Trust, including without limitation all taxes, fees, documentary stamps, and other charges for recording or registering this Deed of Trust. Taxes. The following shall constitute taxes to which this section applies: (1) a specific tax upon this type of Deed of Trust or upon all or any part of the Indebtedness secured by this Dead of Trust; (2) a specific tax on Borrower which Borrower is authorized or 0 required to deduct from payments on the indebtedness secured by this type of Deed of Trust; (3) a tax on this type of Deed of Trust chargeable against the Lender or the holder of the Note; and (4) a specific tax on all or any portion of the Indebtedness or on payments of principal and interest made by Borrower. Subsequent Taxes. If any tax to which this section applies is enacted subsequent to the date of this Deed of Trust, this event shall have the same effect as an Event of Default, and Lender may exercise any or all of its available remedies for an Event of Default as ""d provided below unless Trustor either (1) pays the tax before it becomes delinquent, or (2) contests the tax as provided above in'the Taxes and Liens section and deposits with Lender cash or a sufficient corporate surety bond or other security satisfactory to Lender. fig SECURITY AGREEMENT; FINANCING STATEMENTS. The following provisions relating to this Deed of Trust as a security agreement are a h part of this Deed of Trust: Q� Description: Los Angeles,CA Document—Year.Doc= 2007.2784492 Page: 4 of 11 Order: 6021044 Comment: C� Nam^ �h W N Loan No: 29214 DEED OF TRUST (Continued) Page 5 Security Agreement. This instrument shall constitute a Security Agreement to the extent any of the Property constitutes fixtures, and Lender shall have all of the rights of a secured party under the Uniform Commercial Code as amended from time to time. Security Interest. Upon request by Lender, Trustor shall take whatever action is requested by Lender to perfect and continue Lender's security interest in the Rents and Personal Property. Trustor shall reimburse Lender for all expenses incurred in perfecting or continuing this security interest. Upon default, Trustor shall not remove, sever or detach the Personal Property from the Property. Upon default, Trustor shall assemble any Personal Property not affixed to the Property In a manner and at a place reasonably convenient to Trustor and Lender and make it available to Lender within three (3) days after receipt of written demand from Lender to the extent permitted by applicable law. Addresses. The mailing addresses of Trustor (debtor) and Lender (secured party) from which information concerning the security interest granted by this Deed of Trust may be obtained leach as required by the Uniform Commercial Code) are as stated on the first page of this Deed of Trust. FURTHER ASSURANCES; ATTORNEY -IN -FACT. The following provisions relating to further assurances and attorney -in -fact are a part of this Deed of Trust: Further Assurances. At any time, and from time to time, upon request of Lender, Trustor will make, execute and deliver, or will cause to be made, executed or delivered, to Lender or to Lender's designee, and when requested by Lender, cause to be filed, recorded, refiled, or rerecorded, as the case may be, at such times and in such offices and places as Lender may deem appropriate, any and all such mortgages, deeds of trust, security deeds, security agreements, financing statements, continuation statements, instruments of further assurance, certificates, and other documents as may, in the sole opinion of Lender, be necessary or desirable in order to effectuate, complete, perfect, continue, or preserve (7 ► Borrower's and Trustor's obligations under the Note, this Deed of Trust, and the Related Documents, and (2) the liens and security interests created by this Deed of Trust as first and prior liens on the Property, whether now owned or hereafter acquired by Trustor. Unless prohibited by law or Lender agrees to the contrary in writing, Trustor shall reimburse Lender for all costs and expenses incurred in connection with the matters referred to in this paragraph. Attorney -in -Fact. If Trustor fails to do any of the things referred to in the preceding paragraph, Lender may do so for and in the name of Trustor and at Trustor's expense. For such purposes, Trustor hereby irrevocably appoints Lender as Trustor's attorney -in -fact for the purpose of making, executing, delivering, filing, recording, and doing all other things as may be necessary or desirable, in Lender's sole opinion, to accomplish the matters referred to in the preceding paragraph. FULL PERFORMANCE. If Borrower and Trustor pay all the Indebtedness when 'due, and Trustor otherwise performs all the obligations imposed upon Trustor under this Deed of Trust, Lender shall execute and deliver to Trustee a request for full reconveyance and shall execute and deliver to Trustor suitable statements of termination of any financing statement on file evidencing Lender's security interest in the Rents and the Personal Property. Lender may charge Trustor a reasonable reconveyance fee at the time of reconveyance. EVENTS OF DEFAULT. Each of the following, at Lender's option, shall constitute an Event of Default under this Deed of Trust: Payment Default. Borrower falls to make any payment when due under the Indebtedness, Other Defaults. Borrower or Trustor fails to comply with or to perform any other term, obligation, covenant or condition contained in this Deed of Trust or in any of the Related Documents or to comply with or to perform any term, obligation, covenant or condition contained in any other agreement between Lender and Borrower or Trustor. Compliance Default. Failure to comply with any other term, obligation, covenant or condition contained in this Deed,of Trust, the Note or in any of the Related Documents. Default on Other Payments, Failure of Trustor within the time required by this Deed of Trust to make any payment for taxes or insurance, or any other payment necessary to prevent filing of or to effect discharge of any lien. False Statements. Any warranty, representation or statement made or furnished to Lender by Borrower or Trustor or on Borrower's or Trustor's behalf under this Deed of Trust or the Related Documents is false or misleading in any material respect, either now or at the time made or furnished or becomes false or misleading at any time 'thereafter. Defective Collateralization. This Deed of Trust or any of the Related Documents ceases to be in full force and effect (including failure of any collateral document to create a valid and perfected security interest or lien) at any time and for any reason. Insolvency. The dissolution or termination of Borrower's or Trustor's existence as a going business, the insolvency of Borrower or Trustor, the appointment of a receiver for any part of Borrower's or Trustor's property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower or Trustor. Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method, by any creditor of Borrower or Trustor or by any governmental agency against any property securing the Indebtedness. This includes a garnishment of any of Borrower's or Trustor's accounts, including deposit accounts, with Lender. However, this Event of Default shall not apply if there is a good faith dispute by Borrower or Trustor as to the validlty or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if Borrower or Trustor gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond far the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as being an adequate reserve or bond for the dispute. Breach of Other Agreement. Any breach by Borrower or Trustor under the terms of any other agreement between Borrower or Trustor and Lender that is not remedied within any grace period provided therein, including without limitation any agreement concerning any indebtedness or other obligation of Borrower or Trustor to Lender, whether existing now or later. Events Affecting Guarantor. Any of the preceding events occurs with respect to any guarantor, endorser, surety, or accommodation party of any of the Indebtedness or any guarantor, endorser, surety, or accommodation party dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any Guaranty of the Indebtedness. In the event of a death, Lender, at its option, may, but shall not be required to, permit the guarantor's estate to assume unconditionally the obligations arising under the guaranty in Description: Los Angeles,CA Document:—rear.Doa= 2007.2784492 Page: 5 of .11 Order: 6021044 Comment: DEED OF TRUST Loan No-.*29216 (Continued) a manner satisfactory to Lender, and, in doing so, cure any Event of Default. Page 6 Adverse Change. A material adverse change occurs in Borrower's or Trustor's financial condition, or Lender believes the prospect of payment or performance of the Indebtedness is impaired. Right to Cure. If any default, other than a default in payment is curable and if Trustor has not been given a notice of a breach of the same provision of this Deed of Trust within the preceding twelve (12) months, it may be cured if Trustor, after receiving written notice from Lender demanding cure of such default: (1) cures the default within fifteen 115) days; or (2) if the cure requires more than fifteen (15) days, immediately initiates steps which Lender deems In Lender's sole discretion to be sufficient to cure the default and thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical. RIGHTS AND REMEDIES ON DEFAULT. If an Event of Default occurs under this Deed of Trust, at any time thereafter, Trustee or Lender may exercise any one or more of the following rights and remedies: Election of Remedies. Election by Lender to pursue any remedy shall not exclude pursuit of any other remedy, and an election to make expenditures or to take action to perform an obligation of Trustor under this Deed of Trust, after Trustor's failure to perform, shall not affect Lender's right to declare a default and exercise its remedies. Foreclosure by Sale. Upon an Event of Default under this Deed of Trust, Beneficiary may declare the entire Indebtedness secured by this Dead of Trust immediately due and payable by delivery to Trustee of written declaration of default and demand for sale and of written notice of default and of election to cause to be sold the Property, which notice Trustee shall cause to be filed for record. Beneficiary also shall deposit with Trustee this Deed of Trust, the Note, other documents requested by Trustee, and all documents evidencing expenditures secured hereby. After the lapse of such time as may then be required by law following the recordation of the notice of default, and notice of sale having been given as then required by law, Trustee, without demand on Trustor, shall sell the Property at the time and place fixed by it in The notice of sale, either as a whole or in separate parcels, and in such order as it may determine, at public auction to the highest bidder for cash in lawful money of the United States, payable at time of sale. Trustee may postpone sale of all or any portion of the Property by public announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public announcement at the time fixed by the preceding postponement in accordance with applicable law. Trustee shall deliver to such purchaser its deed conveying the Property so sold, but without any covenant or warranty, express or Implied. The recitals in such deed of any matters or facts shall be conclusive proof of the truthfulness thereof, Any person, including Trustor, Trustee or Beneficiary may purchase at such sale. After deducting all costs, fees and expenses of Trustee and of this Trust, Including cost of evidence of title in connection with sale, Trustee shall apply the proceeds of sale to payment of: all sums expended under the terms hereof, not then repaid, with accrued interest at the amount allowed by law in effect at the date hereof; all other sums then secured hereby; and the remainder, if any; to the person or persons legally entitled thereto. Judicial Foreclosure. With respect to all or any part of the Real Property, Lender shall have the right in lieu of foreclosure by power of sale to foreclose by judicial foreclosure in accordance with and to the full extent provided by California law. UCC Remedies. Wlth respect to all or any part of the Personal Property, Lender shall have all the rights and remedies of a secured party under the Uniform Commercial Code, including without limitation the right to recover any deficiency in the manner and to the full extent provided by California law. Collect Rents. Lender shall have the right, without notice to Borrower or Trustor to take possession of and manage the Property and collect the Rents, including amounts past due and unpaid, and apply the net proceeds, over and above Lender's costs, against the Indebtedness. In furtherance of this right, Lender may require any tenant or other user of the Property to make payments of rent or use fees directly to Lender. If the Rents are collected by Lender, then Trustor irrevocably designates Lender as Trustor's attorney -in -fact to endorse instruments received in payment thereof in the name of Trustor and to negotiate the same and collect the proceeds. Payments by tenants or other users to Lender in response to Lender's demand shall satisfy the obligations for which the payments are made, whether or not any proper grounds for the demand existed. Lender may exercise its rights under this subparagraph either in person, by agent, or through a receiver. Appoint Receiver. Lender shall have the right to have a receiver appointed to take possession of all or any part of the Property, with the power to protect and preserve the Property, to operate the Property preceding foreclosure or sale, and to collect the Rents from the Properly and apply the proceeds, over and above the cost of the receivership, against the Indebtedness. The receiver may serve without bond if permitted by law. Lender's right to the appointment of a receiver shall exist whether or not the apparent value of the Property exceeds the Indebtedness by a substantial amount. Employment by Lender shall not disqualify a person from serving as a receiver. Tenancy at Sufferance. If Trustor remains in possession of the Property after the Property is sold as provided above or Lender otherwise becomes entitled to possession of the Property upon default of Borrower or Trustor, Trustor shall become a tenant at sufferance of Lender or the purchaser of the Property and shall, at Lender's option, either (1) pay a reasonable rental for the use of the Property, or (2) vacate the Property immediately upon the demand of Lender. Other Remedies. Trustee or Lender shall have any other right or remedy provided in this Deed of Trust or the Note or available at law or in equity. Notice of Sale. Lender shall give Trustor reasonable notice of the time and place of any public sale of the Personal Property or of the time after which any private sale or other intended disposition of the Personal Property Is to be made. Reasonable notice shall mean notice given at least ten (10) days before the tlme of the sale or disposition. Any solo of the Personal Property may be made in conjunction with any sale of the Real Property. Sale of the Property. To the extent permitted by applicable law, Borrower and Trustor hereby waives any and all rights to have the Property marshalled, In exercising its rights and remedies, the Trustee or Lender shall be free to sell all or any part of the Property together or separately, in one sale or by separate sales. Lender shall be entitled to bid at any public sale on all or any portion of the Property.' Attorneys' Fees; Expenses. If Lender institutes any suit or action to enforce any of the terms of this Deed of Trust, Lender shall be N Description: Los Angeles,CA Document—Year.Doa= 2007.2784492 Page: 6 of 11 Order: 6021044 Comment: Loan No: 2921� DEED OF TRUST(Continued) Page 7 entitled to recover such sum as the court may adjudge reasonable as attorneys' fees at trial and upon any appeal. Whether or not any court action is involved, and to the extent not prohibited by law, all reasonable expenses Lender incurs that in Lender's opinion are necessary at any time for the protection of its interest or the enforcement of its rights shall become a part of the Indebtedness payable on demand and shall bear interest at the Note rate from the date of the expenditure until repaid. Expenses covered by this paragraph include, without limitation, however subject to any limits under applicable law, Lender's attorneys' fees and Lender's legal expenses, whether or not there is a lawsuit, including attorneys' fees and expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), appeals, and any anticipated post -judgment collection services, the cost of searching records, obtaining title reports (including foreclosure reports), surveyors' reports, and appraisal fees, title insurance, and fees for the Trustee, to the extent permitted by applicable law. Trustor also will pay any court costs, in addition to all other sums provided by law. Rights of Trustee. Trustee shall have all of the rights and duties of Lender as set forth in this section. POWERS AND OBLIGATIONS OF TRUSTEE. The following provisions relating to the powers and obligations of Trustee are part of this Deed of Trust: Powers of Trustee. In addition to all powers of Trustee arising as a matter of law, Trustee shall have the power to take the following actions with respect to the Property upon the written request of Lender and Trustor: (a) join in preparing and filing a map or plat of the Real Property, including the dedication of streets or other rights to the public; (b) join in granting any easement or creating any restriction on the Real Property; and (c) join in any subordination or other agreement affecting this Deed of Trust or the interest of Lender under this Deed of Trust. Obligations to Notify. Trustee shall not be obligated to notify any other party of a pending sale under any other trust deed or lien, or of any action or proceeding in which Trustor, lender, or Trustee shall be a party, unless the action or proceeding is brought by Trustee. Trustee. Trustee shall meet all qualifications required for Trustee under applicable law. In addition to the rights and remedies set forth above, with respect to all or any part of the Property, the Trustee shell have the right to foreclose by notice and sale, and Lender shall have the right to foreclose by judicial foreclosure, in either case in accordance with and to the full extent provided by applicable law, Successor Trustee. Lender, at Lender's option, may from time to time appoint a successor Trustee to any Trustee appointed under this Deed of Trust by an Instrument executed and acknowledged by Lender and recorded in the office of the recorder of Los Angeles County, State of California, The instrument shall contain, in addition to all other matters required by state law, the names of the original Lender, Trustee, and Trustor, the book and page where this Deed of Trust is recorded, and the name and address of the successor trustee, and the instrument shall be executed and acknowledged by Lender or its successors in interest. The successor trustee, without conveyance of the Property, shall succeed to all the title, power, and duties conferred upon the Trustee in this Deed of Trust and by applicable law. This procedure for substitution of Trustee shall govern to the exclusion of all other provisions for substitution. Acceptance by Trustee. Trustee accepts this Trust when this Deed of. Trust, duly executed and acknowledged, is made a public record as provided by law. NOTICES. Any notice required to be given under this Deed of Trust shall be given in writing, and shall be effective when actually delivered, when actually received by telefacsimile (unless otherwise required by law), when deposited with a nationally recognized overnight courier, or, if mailed, when deposited in the United States mall, as first class, certified or registered mail postage prepaid, directed to the addresses shown near the beginning of this Deed of Trust. Trustor requests that copies of any notices of default and sale be directed to Trustor's address shown near the beginning of this Deed of Trust. All copies of notices of foreclosure from the holder of any lien which has priority over this Deed of Trust shall be sent to Lender's address, as shown near the beginning of this Dead of Trust, Any party may change its address for notices under this Deed of Trust by giving formal written notice to the other parties, specifying that the purpose of the notice is to change the party's address. For notice purposes, Trustor agrees to keep Lender informed at all times of Trustor's current address, Unless otherwise provided or required by law, if there is more than one Trustor, any notice given by Lender to any Trustor is deemed to be notice given to all Trustors. STATEMENT OF OBLIGATION FEE, Lander may collect a fee, not to exceed the maximum amount permitted by law, for furnishing the statement of obligation as provided by Section 2943 of the Civil Code of California. SECURITY AGREEMENT INTEREST, This instrument shall also constitute a security agreement with respect to the Personal Property and Trustor grants Beneficiary a security interest in the Personal Property. Without limiting the generality of the definition of the term "Personal Property" contained herein, the term Personal Property shall also include the following, which may or may not be affixed to the Property: all inventory, chattel paper, accounts, equipment and general intangibles located at, arising our of the operations of, or otherwise related to the Property of the business conducted at the Property, including plans and permits, insurance proceeds, trade names, and all records relating to the same; all deposit accounts of Trustor. MISCELLANEOUS PROVISIONS, The following miscellaneous provisions are a part of this Deed of Trust: Amendments. This Deed of Trust, together with any Related Documents, constitutes the entire understanding and agreement of the parties as to the matters set forth in this Deed of Trust. No alteration of or amendment to this Deed of Trust shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration or amendment. Annual Reports. If the Property is used for purposes other than Trustor's residence, Trustor shall .furnish to Lender, upon request, a N certified statement of net operating income received from the Property during Trustor's previous fiscal year in such form and detail as Lender shall require. "Net operating income" shall mean all cash receipts from the Property less all cash expenditures made in connection with the operation of the Property. Caption Headings. Caption headings in this Deed of Trust are for convenience purposes only and are not to be used to interpret or define the provisions of this Deed of Trust. N Description: Los Angeles,CA Doctment—year.DocTD 2007.2784492 Page: 7 of 11 Order: 6021044 Corrrraent : DEED OF TRUST Loan No! 29215 (Continued) Page S Merger. There shall be no merger of the interest or estate created by this Deed of Trust with any other interest or estate in the Property at anytime held by or for the benefit of Lender in any capacity, without the written consent of Lender. Governing Law. This Deed of Trust will be governed by federal law applicable to Lender and, to the extent not preempted by federal law, the laws of the State of California without regard to its conflicts of law provisions. This Deed of Trust has been accepted by Lender in the State of California. Joint and Several Liability. All obligations of Borrower and Trustor under this Deed of Trust shall be joint and several, and all references to Trustor shall mean each and every Trustar, and.all references to Borrower shall mean each and every Borrower. This means that each Trustor signing below is responsible for all obligations in this Deed of,Trust. Where any one or more of the parties is a corporation, partnership, limited liability company or similar entity, it is not necessary for Lender to inquire into the powers of any of the officers, directors, partners, members, or other agents acting or purporting to act on the entity's behalf, and any obligations made or created in reliance upon the professed exercise of such powers shall be guaranteed under this Deed of Trust. No Waiver by Lander. Lender shall not be deemed to have waived any rights under this Deed of Trust unless such waiver is given In writing and signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right, A waiver by Lender of a provision of this Deed of Trust shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or any other provision of this Deed of Trust. No prior waiver by Lender, nor any course of dealing between Lender and Trustor, shall constitute a waiver of any of Lender's rights or of any of Trustor's obligations as to any future transactions. Whenever the consent of Lender is required under this Deed of Trust, the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent instances where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender. Severability. If a court of competent jurisdiction finds any provision of this Deed of Trust to be illegal, invalid, or unenforceable as to any circumstance, that finding shall not make the offending provision illegal, invalid, or unenforceable as to any other circumstance. If feasible, the offending provision shall be considered modified so that it becomes legal, valid and enforceable. If the offending provision cannot be so modified, it shall be considered deleted from this Deed of Trust. Unless otherwise required by law, the illegality, invalidity, or unenforceability of any provision of.this Deed of Trust shall not affect the legality, validity or enforceability of any other provision of this Deed of Trust. Successors and Assigns. Subject to any limitations stated in this Deed of Trust on transfer of Trustor's Interest, this Deed of Trust shall be binding upon and inure to the benefit of the parties, their. successors and assigns, If ownership of the Property becomes vested in a person other than Trustor, Lender, without notice to Trustor, may deal with Trustor's successors with reference to this Deed of Trust and the Indebtedness by way of forbearance or extension without releasing Trustor from the obligations of this Deed of Trust or liability under the Indebtedness. Time la of the Essence. Time is of the essence in the performance of this Deed of Trust. Waive Jury. To the extent permitted by applicable law, all parties to this Deed of Trust hereby waive the right to any jury trial in any action, proceeding, or counterclaim brought by any party against any other party. DEFINITIONS. The following capitalized words and terms shall have the following meanings when used In this Deed of Trust. Unless specifically stated to the contrary, all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used in the singular shall include the plural, and the plural shall include the singular, as the context may require. Words and terms not otherwise defined in this Deed of Trust shall have the meanings attributed to such terms in the Uniform Commercial Code: Beneficiary. The word "Beneficiary" means East West Bank, and its successors and assigns. Borrower. The word "Borrower" means City of Vernon, a municipal corporation and includes all co-signers and co -makers signing the Note and all their successors and assigns. Deed of Trust. The words "Deed of Trust" mean this Deed of Trust among Trustor, Lender, and Trustee, and includes without limitation all assignment and security interest provisions relating to the Personal Property and Rents. Default. The word "Default" means the Default set forth in this Deed of Trust in the section titled "Default". Environmental Laws. The words "Environmental Laws" mean any and all state, federal and local statutes, regulations and ordinances relating to the protection of human health or the environment, including without limitation the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, 42 U.S.C. Section 9601, at seq, ("CERCLA"), the Superfund Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499 ("SARA"), the Hazardous Materiels Transportation Act, 49 U.S.C. Section 1801, at seq., the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, at seq., Chapters 6.5 through 7.7 of Division 20 of the California Health and. Safety Code, Section 2510D, et seq., or other applicable state or federal laws, rules, or regulations adopted pursuant thereto. Event of Default. The words "Event of Default" mean any of the events of default set forth in this Deed of Trust in the events of default section of this Deed of Trust. Guaranty. The word "Guaranty" means the guaranty from guarantor, endorser, surety, or accommodation party to Lender, including without limitation a guaranty of all or part of the Note. v*d Hazardous Substances. The words "Hazardous Substances" mean materials that, because of their quantity, concentration or physical, chemical or infectious characteristics, may cause or pose a present or potential hazard to human health or the environment when improperly used, treated, stored, disposed of, generated, manufactured, transported or otherwise handled. The words y d "Hazardous Substances" are used in their very broadest sense and include without limitation any and all hazardous or toxic substances, materials or waste as defined by or listed under the Environmental Laws. The term "Hazardous Substances" also includes, without limitation, petroleum and petroleum by-products or any fraction thereof and asbestos. r^" Improvements. The word "Improvements" means all existing and future improvements, buildings, structures, mobile homes affixed on the Real Property, facilities, additions, replacements and other construction on the Real Property. N Description: Los Angeles,CA Document-Year.DoaXD 2007.2784492 Page: 8 of 11 Order: 6021044 Comment: DEED OF TRUST Loan No. 29218 (Continued) Page 9 Indebtedness. The word "Indebtedness" means all principal, interest, and other amounts, costs and expenses payable under the Note or Related Documents, together with all renewals of, extensions of, modifications of, consolidations of and substitutions for the Note or Related Documents and any amounts expended or advanced by Lender to discharge Trustor's obligations or expenses incurred by Trustee or Lender to enforce Trustor's obligations under this Dead of Trust, together with interest on such amounts as provided in this Deed of Trust. Lender. The word "Lender" means East West Bank, its successors and assigns. Note. The word "Note means the promissory note dated December 13, 2007, in the original principal amount of $12,843,750.00 from Borrower to Lender, together with all renewals of, extensions of, modifications of, refinancings of, consolidations of, and substitutions for the promissory note or agreement. NOTICE TO TRUSTOR: THE NOTE CONTAINS A VARIABLE INTEREST RATE. Personal Property. The words "Personal Property" mean all equipment, fixtures, and other articles of personal property now or hereafter owned by Trustor, and now or hereafter attached or affixed to the Real Property; together with all accessions, parts, and additions to, all replacements of, and all substitutions for, any of such property; and together with all proceeds (including without limitation all insurance proceeds and refunds of premiums) from any sale or other disposition of the Property. Property. The word "Property" means collectively the Real Property and the Personal Property. Real Property. The words "Real Property" mean the real property, interests and rights, as further described in this Deed of Trust. Related Documents. The words "Related Documents" mean all promissory notes, credit agreements, loan agreements, security agreements, mortgages, deeds of trust, security deeds, collateral mortgages, and all other instruments, agreements and documents, whether now or hereafter existing, executed in connection with the Indebtedness; except that the words do not mean any guaranty or environmental agreement, whether now or hereafter existing, executed in connection with the Indebtedness. Rents. The word "Rents" means all present and future leases, rents, revenues, income, issues, royalties, profits, and other benefits derived from the Property together with the cash proceeds of the Rents. Trustee. The word "Trustee" means EAST WEST INVESTMENT INC., A CALIFORNIA CORPORATION, whose address is 135 N. LOS ROBLES AVENUE, PASADENA, CA 91101 and any substitute or successor trustees. Trustor. The word "Truster" means City of Vernon, a body corporate and politic. TRUSTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS DEED OF TRUST, AND TRUSTOR AGREES TO ITS TERMS, INCLUDING THE VARIABLE RATE PROVISIONS OF THE NOTE SECURED BY THIS DEED OF TRUST. TRUSTOR: CITY OF VERNON, A BODY CORPORATE AND POLITIC rth rued Signer for City' Vernon, a, a ody corporate and politic N `4 rya Deacsiption: Los Angeles,CA Document-Year.DociD 2007.2784492 Page: 9 of 11 Order: 6021044 Comment: ,ORDER NO. 6020708-62 EXHIBIT "A" (LEGAL DESCRIPTION) PARCEL 1: THAT PORTION OF LOT 4 AND ALL OF LOT 5 OF TRACT 2585, IN THE CITY OF VERNON, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 28 PAGES 2 AND 3 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS A WHOLE AS FOLLOWS: BEGINNING AT THE SOUTHWEST CORNER OF LOT 5; THENCE ALONG THE WEST LINE OF LOTS 5 AND 4, NORTH 0002' 15" WEST 408.88 FEET; THENCE NORTH 89° 11' 30" EAST 270.63 FEET TO THE EAST LINE OF SAID LOT 4; THENCE ALONG THE EAST LINE OF SAID LOTS 4 AND 5, SOUTH 00 02' 15" EAST 411.32 FEET TO THE SOUTHEAST CORNER OF SAID LOT 5; THENCE ALONG THE SOUTH LINE OF SAID LOT 5, SOUTH 890 42' 30" WEST 270.60 FEET TO THE POINT OF BEGINNING. EXCEPT FROM SAID LOT 5 THE SOUTHERLY 10 FEET THEREOF, CONVEYED TO THE CITY OF VERNON FOR ROAD PURPOSES. PARCEL 2: THAT PORTION OF LOT 3 OF TRACT 2585, IN THE CITY OF VERNON, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 28 PAGES 2 AND 3 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT A POINT IN THE EASTERLY LINE OF SAID LOT 3, DISTANT THEREON NORTH 0° 35' 15" WEST, 119 FEET FROM THE SOUTHEAST CORNER OF SAID LOT; THENCE SOUTH 89° 42' 30" WEST, 160.93 FEET; THENCE NORTH 01 02' WEST 203 FEET; THENCE NORTH 89° 42' 30" EAST 158.94 FEET, MORE OR LESS, TO THE EASTERLY LINE OF SAID LOT 3; THENCE SOUTH 00 35' 15" EAST 203 FEET TO THE POINT OF BEGINNING. SAID PROPERTY BEING THE SAME PROPERTY DESCRIBED IN DEED TO LOWELL M. HAMBRIC, RECORDED IN BOOK 6617 PAGE 880, OFFICIAL RECORDS OF SAID COUNTY. PARCEL 3: THE SOUTHERLY 119 FEET OF SAID LOT 3 OF TRACT 2585, IN THE CITY OF VERNON, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 28 PAGES 2 AND 3 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. EXCEPT THEREFROM THE SOUTHERLY 10 FEET THEREOF, CONVEYED TO THE CITY OF VERNON FOR ROAD PURPOSES. PARCEL 4: THAT PORTION OF SAID LOT 3 OF TRACT 2585, IN THE CITY OF VERNON, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 28 PAGE 2 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: Description: Los Angeles,CA Document-Year.DocM 2007.2784492 Page: 11 of 11 Order: 6021044 Comment: 'ORDER NO. 6020708-62 . EXHIBIT "A" (LEGAL DESCRIPTION) PARCELI: THAT PORTION OF LOT 4,.AND ALL OF LOT 5 OF TRACT 25851- IN THE CITY -OF VERNON, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 28 PAGES 2 AND 3.OF MAPS, , . IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS A WHOLE AS FOLLOWS; BEGINNING AT THE SOUTHWEST CORNER. OF LOT 5; THENCE ALONG THE WEST LINE OF LOTS 5 AND 4, NORTH, 0° 02' 15" WEST.408.88 FEET; THENCE NORTH 89° 11' 30" EAST z70.53 FEET.TO THE EAST - LINE OF SAID LOT 4; THENCE ALONG THE. EAST LINE OF SAID °LOTS 4 AND 5, SOUTH .00 02'.15" EAST 411.32 FEET TO THE SOUTHEAST CORNER OF SAID.LOT 5;: THENCE ALONG THE SOUTH:LINE OF SAID LOT 5, SOUTH 899 4T 30" WEST 27.0.50. FEET TO THE POINT OF BEGINNING, EXCEPT FROM. SAID .LOT 5 THE SOUTHERLY 10 FEET THEREOF, CONVEYED TO THE CITY OF VERNON FOR ROAD PURPOSES. ' PARCEL 2: THAT PORTION OF LOT 3 OF TRACT' 2585, IN.THE CITYOF-VERNON, COUNTY OF LOS ANGELES, STATE ... OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 28 PAGES 2 AND 3 OF MAPS, IN TH_E'OFFICE OF THE. COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS,FOLLOWS: BEGINNING -AT A POINT IN THE EASTERLY LINE OF SAID LOT.3, .bISTANT.THEREON NORTH 00.35' 15 WEST; 119 FEET FROM .THE SOUTHEAST CORNER OF:SAID LOT; THENCE SOUTH 8.91 42' 30" .WEST, 160.93. FEET; THENCE NORTH 00 02' 'WEST 203 FEET; THENCE NORTH: 890.42' 30" EAST 158.94 FEET, MORE OR LESS, TO THE' EASTERLY: LINE. SAID LOT 3; THENCE SOUTH 00 35' 15"_ EAST 203 _FEET TO . THE POINT OF BEGINNING.:. `. SAID .PROPERTY BEING : THE SAME PROPERTY. DESCRIBED IN DEED TO '.LOWELL M. HAMBRIC, RECORDED IN BOOK 6617'PAGE 880, OFFICIAL RECORDS OF SAID COUNTY PARCEL 3 THE SOUTHERLY. 119 FEET. OF SAID LOT 3. OF TRACT 2585; IN THE CITY OF VERNON, COUNTY OF LOS. ANGELES, STATE. OF CALIFORNIA; AS PER MAP RECORDED -IN BOOK.28 PAGES 2 AND.3 OF MAPS; IN THE OFFICE OF THE COUNTY RECORDER OF SAID. COUNTY. .EXCEPT THEREFROM THE SOUTHERLY 10 FEET THEREOF, CONVEYED. TO THE CITY .OF. VERNON : FOR ROAD PURPOSES. ORDER NO. 6020708-62 BEGINNING AT THE INTERSECTION OF THE SOUTHERLY LINE OF EAST 55m STREET (60 FEET WIDE) WITH THE EASTERLY LINE OF SAID LOT 3; THENCE SOUTH 89° 38' WEST ALONG SAID SOUTHERLY I LINE 24 FEET, MORE OR LESS, TO THE INTERSECTION WITH A LINE DRAWN PARALLEL.WITH AND DISTANT 24 FEET, MEASURED AT RIGHT ANGLES FROM THE EASTERLY LINE OF SAID LOT 3;. THENCE SOUTH 0.° 35' 15" EAST ALONG SAID ;PARALLEL LINE 248.03 FEET; THENCE PARALLEL WITH SAID SOUTHERLY LINE OF EAST 55TI STREET, NORTH 89° 38'. EAST 24 FEET, MORE OR LESS; TO,THE. EASTERLY LINE OF SAID LOT 3; THENCE NORTH 00 35' 15" WEST ALONG SAID EASTERLY LINE 248.03 FEET, MORE OR LESS; TO THE POINT OF BEGINNING. PARCEL 5: THAT PORTION OF SAID LOT 3 OF TRACT 2585; IN THE CITY OF VERNON, COUNTY OF LOS-.ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN'BOOK 28 PACES 2 AND 3 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: i BEGINNING AT A POINT ON THE EAST LINE OF SAID LOT; DISTANT NORTH THEREON 322. FEET FROM THE SOUTHEAST CORNER THEREOF; THENCE NORTH ALONG SAID EAST LINE TO .THE SOUTHEAST j CORNER OF THE TRACT OF LAND CONVEYED TO CALIFORNIA-OREGON . PAPER MILLS BY DEED RECORDED IN BOOK 11143 PAGE 79, OFFICIAL RECORDS; THENCE SOUTH 890 39' _ WEST ALONG THE, SOUTH. LINE OF'. SAID LAND AND ALONG THE SOUTH LINE OF THE TRACT OF LAND_ CONVEYED TO PIONEER PAPER COMPANY `BY DEED"RECORDED'IN" BOOK 11078'PAG�E 282, OFFICIAL:RECORDS, 268:65 FEET; THENCE NORTH 00. 02' 15" WEST.ALONG THE WESTERLY LINE OF SAID .LAST : MENTIONED TRACT OF LAND, 32 FEET; THENCE SOUTH 89° 39' WEST 7.84 FEET TO. THE WEST LINE OF SAID. LOT 3; THENCE SOUTHERLY ALONG THE WEST LINE OF SAID 'LOT TO A POINT DISTANT. NORTHERLY THEREON 119 FEET FROM THE SOUTH LINE OF SAID LOT; THENCE' EASTERLY PARALLEL WITH SAID SOUTH LINE TO THE SOUTHWEST CORNER OF, THE TRACT .OF LAND CONVEYED TO LOWELL M. HAMBRIC BY .DEED RECORDED IN :BOOK.6617 PAGE .88, OFFICIAL RECORDS; THENCE NORTH 00 02' WEST ALONG. THE WEST LINE OF SAID LAST MENTIONED.. TRACT OF LAND, 203 ,FEET TO, THE NORTHWEST CORNER THEREOF; THENCE NORTH 89°_:42' 30" EAST; ALONG`THE NORTH .LINE OF SAID .LAND, 158.94.FEET, MORE OR LESS, TO: THE POINT OF BEGINNING: PARCEL 6: LOT'2 OF TRACT 2585, IN THE CITY OF. :VERNON,_COUNTY OF LOS.ANGELES; STATE. OF CALIFORNIA, AS PER MAP. RECORDED IN BOOK 28 PAGES. 2 AND 3 OF MAPS,_ IN THE. OFFICE OF THE. COUNTY RECORDER OF.SAID COUNTY. EXCEPT THEREFROM THE EASTERLY 500 FEET THEREOF: PARCEL 7: THAT PORTION OF. LOT 1 OF TRACT 2585, IN THE CITY OF VERNON, COUNTY OF LOS ANGELES; STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 28 PAGES 2 AND.3 OF MAPS; IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED. AS FOLLOWS: BEGINNING AT THE NORTHWEST CORNER OF SAID LOT 1; THENCE ALONG:THE NORTHERLYLINE OF SAID LOT, NORTH 890 3V 00" EAST 450 FEET;; - THENCE PARALLEL WITH THE WESTERLY LINE OF SAID LOT, SOUTH 0° 35' 15". EAST 389 FEET TO A POINT IN THE SOUTHERLY LINE OF SAID LOT 1; THENCE ALONG SAID SOUTHERLY_ LINE SOUTH 890 30' 00 WEST 450 FEET TO THE SOUTHWEST CORNER OF SAID LOT; THENCE ALONG THE WESTERLY LINE. OF SAID LOT 1, NORTH 09 35' 15". WEST . 389 FEET TO.THE POINT OF BEGINNING: ' i DEED OF TRUST Loan No: 29219 (Continued) Page 10 CERTIFICATE OF ACKNOWLEDGMENT A STATE OF , ' 11 4rIL +Gt ) % s AL )5S COUNTYOF (f/6 ) On I � r , 20 before me, / �{ emue f� 6 «� , a Notary Public ,, . /,� (here insert name and title of the officer) rt personally appeared l e r S e/ tl dpersonally k is o#-sei+sfaato viderh to be the person(si whose name(vi is/are subscribed tot within instrument and acknowledged to me that he/mIraMrey executed the same in his/badtkeir authorized capacity(ioe), and that by his/herk4eir signatureis) on the instrument the personK or the entity upon behalf of which the person(ay acted, executed the instrument. WITNESS my nd and official sea). 1WNssion 1611 88 Commission # 1611388 I ` @My Notary Public - CatltOMIC Los Angeles County Signature Comm, Explies Noy 4,2000 fSeap (DO NOT RECORD) REQUEST FOR FULL RECONVEYANCE (To be used only when obligations have been paid in full) To: , Trustee The undersigned is the legal owner and holder of all Indebtedness secured by this Deed of Trust. All sums secured by this Deed of Trust have been fully paid and satisfied. You are hereby directed, upon payment to you of any sums owing to you under the terms of this Deed of Trust or pursuant to any applicable statute, to cancel the Note secured by this Deed of Trust (which is delivered to you together with this Deed of Trust), and to reconvey, without warranty, to the parties designated by the terms of this Deed of Trust, the estate now held by you under this Deed of Trust. Please mail the reconveyance and Related Documents to: Date: Beneficiary: By: Its; LISEA PAO IwWY.p, Y,,. 6.E�.10.1A1 Cpl. /I,rIW t • , bo4.ean,. I,K. Ip0/, Epp?. Y NOW N-14. -CA GILL P %E CFRCE1 KIGOI.FC TRAM FA•1 Description: Los Angeles,CA Document —Year. 2007.2784492 Page: 10 of 11 Order: 6021044 Comment:: e' Next Day Air Tracking Number 1Z 933 312 01 1001 422 6 CALIFORNIA•ACKNOWLEDGMENT .�5�_-�_'S.�.-�.'�,'�.-�.'S�.--�.'S,S�S;�S 5�.-�.`5�..-�.'S '�S,y�S • 5,,: �5;'�S�S S,a�S '?5�,--�.'S�.�.'S �.y�S,�S S S;:�Ss�S�S.�s�S�_--�.'S.�.-�.'S�.-�.'S S;�S�_-�.'.v�N��S�S;v,S�S S!�R�.v\.'S�..�` State of California County/of�% / / 4) D before me, dLGf i f.� On A Date Here Insert Name and Title of the Officer personally appeared &I L" �a Aall_ MANUELA GIRON Commission # 1611388 z , �s Notary Public - California z Los Angeles County My Comm. Expires Nov 4,200 r Place Notary Seal Above who proved to me on the basis of satisfactory evidence to be the person(s) whose name(e) is/aFe subscribed to the within instrument and acknowledged to me that he/may executed the same in his/he#4heir authorized capacity(iss), and that by hisAie#4heir signature(s) on the instrument the person($), or the entity upon behalf of which the person(e) 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. WITNES� my hand and official s ` i Signatur ignatur of Notary Public OPTIONAL Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Title or Type of Document: Document Date: Signer(s) Other Than Named Above: Capacity(ies) Claimed by Signer(s) 172- Number of Pages: Signer's Name: �c�IZ�S• ���1/1GC��P1 Signer's Name: ❑ Individual ❑ Individual ❑ Corporate Officer — Title(s): ❑ Partner — ❑ Limited ❑ General ❑ Attorney in Fact • ❑ Trustee Top of thumb here ❑ Guardian or C nservator 7 Other: 14 A- Y Signer Is Representing: ayeruv+ ❑ Corporate Officer — Title(s): _ ❑ Partner — ❑ Limited ❑ General ❑ Attorney in Fact ❑ Trustee ❑ Guardian or Conservator ❑ Other: Signer Is Representing: RIGHT THUMBPRINT OF SIGNER 11 1 C✓:IAO!✓%`%:'✓::'✓4�✓.:C✓�.�✓.:.C✓:.'✓.�✓:�✓��✓:C✓ v: v:✓:`✓:�✓.:�✓.�✓..�✓:�✓.v:'✓tiff :'✓ `%S�✓<�_�.'.'✓ri✓.: ✓.'.�✓.:'er::'✓ `✓� MY, 1 1•- '• • 1 • 1 : 1 1 T.D. Service Company MMMD 1820 E. First St., Suite 300 Santa Ana, CA 92705 APR 2 12010 (800) 890-4096 111111111111 III 1111 IN COMMUMIN �Orvjcas 04/15/10 CITY OF VERNON 4305 SANTA FE AVE VERNON, CA 90058 Customer#/Numero De Cliente: 566 Service#/Numero De Servicio: 3520014RL1 Loan No./Numero De Prestamo: 29218 Dear Sir/Madam: Enclosed please find a recorded Release of Mortgage/Full Reconveyance document that has been filed with the County Recorder's Office. When your lender releases your mortgage loan through a refinance, sale of property, or otherwise, your lender or servicer is required to notify the county recorder, where the property is located, that the referenced loan is now released. The enclosed document is for your records. No additional action needs to be taken. If you have any questions regarding this letter, please contact our customer service department at (800) 890-4096. Sincerely, Customer Service T.D. Service Company For East West Investment Inc. Estimado Senor/Senora: Adjunto le estamos enviando una copia del documento de ejecuci6n de Traspaso Hipotecario, el cual ha sido registrado con la oficina del Registrador del Condado correspondiente. Cuando la cuenta de una propiedad es cerrada a trav6s de una transacci6n de refinanciamiento, compra venta, etc., es obligatorio notificar al correspondiente Registrador del Condado acerca de esta transacci6n. El documento adjunto a esta carta es para use de sus propios archivos, y no requiere ninguna intervenci6n de parte suya. Si tiene alguna pregunta con respecto a esta carts o documento adjunto, por favor contactese con nuestro Departamento de Servicio al Cliente al tel6fono (800) 890-4096. Atentamente, Servicio al Cliente Para East West Investment Inc. RSCOVER6 RECORDING REQUESTED BY: T.D. Service Company GABRIEL GOMEZ 1820 E. First St., Suite 300 SANTA ANA CA 92705 When Recorded Mail To: T.D. Service Company Lien Release Division 1820 E. First Street Suite 300 Santa Ana, CA 92705-1111 MERS Telephone: (888) 679-6377 Customer#: 0000566 Service Number: 3520014RL1 Loan #:29218 0410212010 FULLRECONVEYANCE EAST WEST INVESTMENT INC BY T.D. SERVICE COMPANY AS AGENT FOR THE TRUSTEE, as present Trustee under that certain Deed of Trust Dated 12/13/2007 , and executed by CITY OF VERNON, A BODY CORPORATE AND POLITIC, WHOSE ADDRESS IS 4305 SANTA FE AVENUE, VERNON, CA 90058 as Trustor, and recorded on 12/19/2007 as Instrument or Document No. 20072784492 , Book -- , Page -- , and re -recorded on 04/16/2008 as Instrument or Document No. 20080656143 , Book -- , Page -- , of the Official Records in the Office of the County Recorder of Los Angeles County, CA having been requested in writing by the holder of the obligations secured by said Deed of Trust, to reconvey the estate granted to Trustee under said Deed of Trust, does hereby reconvey to the person or persons legally entitled thereto, without warranty all the estate, title and interest acquired by the Trustee under said Deed of Trust. Dated: 03/30/2010 EAST WEST INVESTMENT INC BY T.D. SERVICE COMPANY AS AGENT FOR THE TRUSTEE Jul' Y - VP Vice President STATE OF CALIFORNIA COUNTY OF ORANGE } S.S. On 03/30/2010, before me M. Tulio, Notary Public, personally appeared Julie A. Yates - VP, 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. 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 M. Tulio Expires: 08/16/2011 M. TWO COMM, # 1761648 NOTARY PUBLIC CALIFORNIA ORANGECOUNTY My Comm. expires Aug. 16, 2011 Ingeo TrackinglD: 1210427 This page is part of your document - DO NOT DISCARD 20100449879 * IIIIII IIIII IIIII IIIII II I IIIII IIIII IIIII IIII II III IIIII II I IIII ♦t Recorded/Filed in Official. Records f Recorder's Office, Los Angeles County, _ California x ��RrFaRN`�'x 04/02/10 AT 08:23AM FEES: TAXES: Pages: 0002 18.00 0.00 0.00 PAID: 18.00 I��IIVVIIIAVVI��IIIIIIIIIIIIR�IIIVIII�IIIVI�VVIII�AIIV�I�III�VII LEADSHEET IIIVI IIII IIIII IVII IAII IIYI IIVI IIYI INN IIIII IIII II I IVII I II III III VII 201004020020001 00002169063 i�Mmuinmiin�mN 002614700 17 DumiuMail �(Hard NCmiimTHIS FORM IS NOT TO BE DUPLICATED nuu� � i�Wmi�uuMm��mw�umu�mn��m �