Resolution No. 2016-004 (14)ESCROW AGREEMENT
February 2, 2016
Mai-Ly Marsh
AVP, Sr. National Title Coordinator/Closer
National Commercial Services
Commonwealth Land Title Company
888 S. Figueroa Street, Suite 2100
Los Angeles, CA 90017
mmarsh(a,cltic.com
Escrow No. 09470093 - MMarsh (Vernon)
Re: City of Vernon Added Facilities Agreement (as the same has been or may be
amended, the "Facilities Agreement"), dated as of February 2, 2016, by and between
RPlanet Earth Los Angeles, LLC, a Delaware limited liability company
("Customer") and the City of Vernon, a California municipal corporation ("C -
with respect to property located at 3200 Fruitland, Vernon, California (the
"Property").
Agreement Regarding Assignment and Assumption of Purchase and Sale
Agreement (as the same has been or may be amended, the "Assignment
Agreement"), dated as of August 4, 2015, by and between City and Fruitland Owner
LLC, a Delaware limited liability company ( "Owner").
A. Facilities Agreement
City and Customer have entered into the Facilities Agreement with respect to the
construction of certain electric facilities at the Property. In accordance with the Facilities
Agreement, Customer shall deliver to an escrow account established by City and Customer in
immediately available funds the amounts required to be delivered by Customer pursuant to the
Facilities Agreement, including the amount of Two Million Three Hundred Thousand Dollars
($2,300,000) as the Reserve Amount and any additional amounts as may be required under the
Facilities Agreement for any Deficiency and/or for Added Facilities Installation Costs relating to
Phase 2 and/or as otherwise required under the Facilities Agreement (collectively, together with
any interest earned thereon, the "Reserve Funds"). Escrow Agent's wiring instructions are
attached hereto as Exhibit A. You, hereinafter the "Escrow Agent", are to place the Reserve
Funds in an interest bearing account and hold the Reserve Funds in escrow and deliver such
Reserve Funds in accordance with these instructions. Initially capitalized terms used in this
Section A without definition shall have the meaning set forth in the Facilities Agreement.
Pursuant to Section 19 of the Facilities Agreement, City will be entitled to use the
Reserve Funds for purposes of paying the Added Facilities Installation Costs and Line Extension
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Costs. From time to time, City may by written notice to Escrow Agent (with a copy of each such
notice provided to Customer by City) request a disbursement from the Escrow Agent in order to
pay Added Facilities Installation Costs and/or Line Extension Costs. Escrow Agent shall,
without further authorization or approval from anyone, disburse the requested amount to City
within two (2) business days of receipt of written notice from the City stating that City is entitled
to the requested amount pursuant to the Facilities Agreement. Upon completion of the
installation of the Added Facilities and Line Extension and payment of all Added Facilities
Installation Costs and Line Extension Costs, any balance of the Funds remaining with the
Escrow Agent shall be released and refunded to Customer upon a joint written instruction of City
and Customer. In the event Escrow Agent has not been provided the required instruction on or
before that date which is the seventh (7th) anniversary of the date hereof, Escrow Agent shall
deliver written notice of same to City and Customer, and City and Customer shall jointly instruct
Escrow Agent as to distribution of such funds.
B. Assignment Agreement
Pursuant to Section 8 of the Assignment Agreement, concurrently with the delivery of the
Purchase Price at Closing, Owner (or Customer on Owner's behalf) shall deliver to Escrow
Agent an amount equal to One Million Two Hundred Fifty Thousand Dollars ($1,250,000)
(together with any interest earned thereon, the "Financial Assurance Funds") as security for
Owner's or Customer's anticipated electrical power usage at the Property. Escrow Agent shall
place the Financial Assurance Funds in an interest bearing account and hold the Financial
Assurance Funds in escrow and deliver such Financial Assurance Funds in accordance with these
instructions. The investment shall be subject to Escrow Holder's receipt of its executed Interest
Bearing Account Instructions and IRS Form W-9. Upon a joint and written instruction of City,
Customer and Owner that Owner or Customer has achieved a Consumption Hurdle by the
specified date applicable thereto as set forth in the Assignment Agreement, Escrow Agent shall
disburse an amount equal to one-third (1/3) of the Financial Assurance Funds (i.e., $416,666.25,
plus a pro rata portion of the interest accrued on the Financial Assurance Funds) to Customer
within two (2) business days of receipt of written notice jointly executed by Owner, Customer
and City stating that Customer is entitled to the requested amount pursuant to the Assignment
Agreement. If a Consumption Hurdle is not achieved by the applicable date as set forth in the
Assignment Agreement (i.e., January 1, 2019, January 1, 2021 and January 1, 2023, as
applicable), then Escrow Agent shall, without further authorization or approval from anyone,
disburse an amount equal to one-third (1/3) of the Financial Assurance Funds (i.e., $416,666.25,
plus a pro rata portion of the interest accrued on the Financial Assurance Funds) to City within
two (2) business days of receipt of written notice from the City (with City providing Customer
with a copy of such notice) stating that City is entitled to the requested amount pursuant to the
Assignment Agreement. Initially capitalized terms used in this Section B without definition shall
have the meaning set forth in the Assignment Agreement.
C. General Instructions
Escrow Agent is not to disclose to any person (other than the parties hereto, their
employees, agents or independent contractors) any information about the Facilities Agreement or
the Assignment Agreement or their existence or this letter of instructions (except if requested in
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writing by all parties to this Agreement or as may be required by court in any litigation or by
law).
As used herein, the term "Funds" means collectively the Reserve Funds and the
Financial Assurance Funds. Escrow Agent is, at City's election in its sole discretion, to maintain
the Funds in a federally -insured interest -bearing account in a national banking association or
such other institution as City may approve, and all interest accruing thereon shall be paid to the
party entitled to the Funds under the terms of the Facilities Agreement or Assignment
Agreement, as applicable. We understand that Escrow Agent assumes no responsibility for, nor
will we hold Escrow Agent liable for, any loss accruing due to bank failure and/or takeover by a
federal regulatory agency. Nor shall Escrow Agent be required to institute legal proceedings of
any kind pursuant to these instructions, nor be required to defend any legal proceedings which
may be instituted against Escrow Agent with respect to the subject matter of these instructions
unless Escrow Agent is requested to do so by the parties and arrangements reasonably
satisfactory to Escrow Agent have been made to indemnify Escrow Agent against the cost and
expense of such defense by the party making such request. If any dispute or ambiguity shall
arise with respect to these instructions, whether such dispute arises between the parties hereto or
between the parties hereto and other persons, Escrow Agent, at Escrow Agent's sole discretion,
may (but is not obligated to) interplead such disputants. Escrow Agent shall be responsible only
for the performance of such duties as are strictly set forth herein and in no event shall Escrow
Agent be liable for any act or failure to act under the provisions of this letter except where such
action or inaction is the result of Escrow Agent's willful misconduct or gross negligence. Escrow
Agent's fee for performing its obligations under this Agreement shall be $1,500, with an annual
fee of $250 in the event of the term of the escrow extends beyond one year, plus any out-of-
pocket expenses. Owner (or Customer on Owner's behalf) and the City shall split equally
Escrow Agent's fee upon the opening of this transaction.
The termination of this Agreement shall occur at such time as all funds on deposit have
been transferred, or at such time as the parties mutually elect to terminate.
Escrow Agent shall not be responsible for (i) the sufficiency or correctness as to form or
the validity of any release instruction deposited with Escrow Agent, (ii) the manner of execution
of the release instruction, or (iii) the identity, authority or rights of any person executing the
release instruction deposited with Escrow Agent.
The undersigned agree that Escrow Agent shall incur no liability and shall be fully
protected in acting in accordance with this instruction and further agree to indemnify and hold
Escrow Agent harmless for all losses, costs and expensed incurred, including attorney's fees, as a
result of its involvement in any litigation arising from the performance of its duties hereunder.
Escrow Agent shall not be liable, except for its own gross negligence or malicious
misconduct, for any claims asserted a party hereto based upon the performance by either party in
the closing of this transaction.
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The validity and effectiveness of the Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of California.
After closing or cancellation of this escrow, Escrow Agent shall retain the escrow file(s)
pertaining to this escrow for five (5) years, after which time Escrow Agent is authorized to
destroy or otherwise dispose of such file(s) without notice or liability to the parties hereto.
Escrow Agent has the right to resign upon written notice delivered to the parties hereto. If
such right is exercised, all funds and documents shall be returned to the party who deposited
them and Escrow Holder shall have no liability hereunder.
The parties hereto expressly agree that you, as Escrow Agent, have the absolute right at
your election to file an action in interpleader requiring the parties to answer and litigate their
several claims and rights among themselves and you are 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 your cancellation charges and costs, expenses and reasonable
attorney's fees which you are required to expend or incur in such interpleader action, the amount
thereof to be fixed and judgment therefore to be rendered by the court. Upon the filing of such
action, you shall thereupon be fully released and discharged from all obligations imposed by the
terms of this escrow or otherwise.
Except for wire transfers, funds remitted are subject to availability requirements imposed
by Section 12413.1 of the California Insurance Code. CASHIER'S, CERTIFIED, or TELLER'S
checks, payable to Commonwealth Land Title Company are generally available for disbursement
on the next business day following the date of deposit.
Commonwealth Land Title Company conducts escrow business under Certificate of
Authority issued by the Department of Insurance.
All notices for Escrow Agent shall be forwarded to:
Commonwealth Land Title Company
888 S. Figueroa Street, Suite 2100
Los Angeles, CA 90017
(213) 330-3071 Direct
(213) 330-3103 Fax
mmarshgcltic.com
Diana Magana
Assistant
(213) 330-3074 / diana.magana@cltic.com
This Agreement may only be amended or modified by written agreement, executed by the
parties hereto and Escrow Agent.
All documents, balances and statements due to the undersigned are to be mailed to the
respective addresses shown herein, unless otherwise directed. In the event that any party to this
agreement utilizes electronic or facsimile transmitted signed documents, all parties hereby agree
to accept and to rely upon such documents as if they bore original signatures.
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Please indicate Escrow Agent's agreement to comply with the foregoing instructions by
executing at least three (3) copies of this letter and returning (a) one to City at Vernon Gas &
Electric Department, Attn: Carlos Fandino, Director, 4305 Santa Fe Avenue, Vernon, CA 90058,
with a copy to City of Vernon, City Attorney's Office, Attn: Hema Patel, 4305 Santa Fe Avenue,
Vernon, CA 90058, and a copy to DLA Piper LLP (US), 550 South Hope Street, Suite 2300,
Los Angeles, California 90071, Attention: Michael Hamilton, Esq. ("City's Counsel"), (b) one
to Owner at Fruitland Owner LLC, c/o Cohen Asset Management, Inc., 1900 Avenue of the
Stars, Suite 500, Los Angeles, CA 90067, Attention: Mr. Bradley Cohen, President & CEO,
with a copy to Raines Feldman LLP, 9720 Wilshire Blvd., Fifth Floor, Beverly Hills, CA 90212,
Attn: Andrew Raines, Esq. ("Owner's Counsel"), and (c) one to Customer at rPlanet Earth Los
Angeles, LLC, Attn: Robert Daviduk, 2361 Rosecrans Ave., Suite 336, El Segundo, CA 90245,
with a copy to Allen Matkins Leck Gamble Mallory & Natsis LLP, Attn: Joe M. Davidson, Esq.,
501 W. Broadway, 15th Floor, San Diego, CA 92101 ("Customer's Counsel").
[signatures on following pages]
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CITY:
THE CITY OF VERNON
By:
Michael McCormick, Mayor
ATTEST:
Mari E. Ayala. ity Clerk
API ROVED AS ' 0 FORM:
He a P City e , Attorney
[Signatures continue on the following page]
ESCROW AGREEMENT
CUSTOMER:
RPLANET EARTH LOS ANGELES, LLC,
a De.
By:
Nan
Tith
By:
Nan
Title:
CEtD
[Signatures continue on the following page]
— Signature Page —
Escrow Agreement
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OWNER:
FRUITLAND OWNER LLC,
a Delaware limited liability company
By:
Name: /QgpG61' Coffr�i
Its: Authorized Signatory
[Signatures continue on the following page]
— Signature Page —
Escrow Agreement
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ACKNOWLEDGED AND AGREED:
COMMONWEALTH LAND TITLE COMPANY
By:
Name: MBH4 6Aar_O
Title: Sr. C6armr dal Escrow OHioer
[End of signatures]
— Signature Page —
Escrow Agreement
WESM67544052,6
EXHIBIT A
ESCROW AGENT'S WIRING INSTRUCTIONS
re Commonwealth
LAND TITLE COMPANY
888 S. Figueroa Street, Ste. 2100, Los Angeles, California 90017
Phone: (213) 330-3071 1 Fax: (213) 330-3103 1 mmarsh@cltic.com
WIRE TRANSFER INFORMATION:
Bank of America
275 Valencia Ave Mail Code: CA7-701-02-66
Brea, CA 92823
ESCROW ACCOUNT NO.: 1257967028
ACCOUNT NAME: COMMONWEALTH LAND TITLE COMPANY
ABA/ROUTING NO.: 0260-0959-3
SWIFT CODE: BOFAUS3N
Attention: Mai-Lv Marsh
Re: Escrow No. 09170093 - MMarsh ( Vernon )
Exhibit A
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