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HomeMy WebLinkAboutAttachment No. 2 Executed Purchase AgreementAttachment No. 2 PURCHASE AND SALE AGREEMENT (1726 Wilson Avenue, National City, 91950) THIS PURCHASE AND SALE AGREEMENT ("Agreement") is dated as of the 20th day of August, 2013 ("Effective Date") by and between David Comartin and Robert Comartin (collectively, the "Seller") and the City of National City ("Purchaser"). RECITALS A. The Seller owns the fee interest in that certain real property generally located at 1726 Wilson Avenue, National City, California 91950, legally described in Exhibit A attached hereto and made a part hereof ("Real Property"). B. Provided the various conditions to Closing (as defined below) set forth in this Agreement are satisfied, the Seller agrees to sell the Property (as defined below) to the Purchaser and the Purchaser agrees to purchase the Property from the Seller as set forth in this Agreement. Provided, however, the Seller acknowledges and agrees that in order to bind Purchaser to the terms and conditions of this Agreement, this Agreement must be approved by the City of National City. AGREEMENT FOR GOOD AND VALUABLE CONSIDERATION, the receipt and adequacy of which are acknowledged, the Seller and the Purchaser hereby agree as follows: 1. Purchase and Sale. In consideration of the rnutual covenants set forth in this Agreement, the Purchaser will acquire all of the Property, on the terms and conditions set forth herein, provided the various conditions to Closing set forth in this Agreement are satisfied. (a) Sale of the Property. The Seller agrees to sell the Property to the Purchaser, and the Purchaser agrees to purchase the Property from Seller, on the terms and conditions set forth herein. At Closing, the Seller shall convey the fee interest in the Real Property to the Purchaser by recordation of the Grant Deed (as defined below). The Escrow Agent shall issue the Title Policy (as defined below) to the Purchaser at Closing. (b) Possession of the Property. The Seller shall deliver possession of the Property to Purchaser at Closing. Possession of the Property shall be delivered to Purchaser subject only to the Title Exceptions, all as defined hereinbelow. 2. Definitions. As used in this Agreement, the following terms shall have the following meanings: "Agreement" means this Purchase and Sale Agreement between the Seller and the Purchaser. I Attachment No. 2 "Applicable Environmental Law" means all laws applicable to the presence of any Hazardous Materials (as defined below) on or within the Property, including, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C. §9601, et seq.); the Resource Conservation and Recovery Act (42 U.S.C. §6901, et seq.); the Clean Water Act (33 U.S.C. §2601, et seq.); the Safe Drinking Water Act (14 U.S.C. §300f, et seq.); the Hazardous Materials Transportation Act (49 U.S.C. §5101, et seq.); the Toxic Substances Control Act (15 U.S.C. §2601, et seq.); the Federal Water Pollution Control Act (33 U.S.C. §1300, et seq.); the Federal Insecticide, Fungicide and Rodenticide Act (7 U.S.C. §136, et seq.); the Atomic Energy Act (42 U.S.C. §2011, et seq.); the Nuclear Waste Policy Act (42 U.S.C. § 10101, et seq.); the Clean Air Act (42 U.S.C. §7401, et seq.); the California Hazardous Waste Control Act (California Health and Safety Code §25100, et seq.); the Carpenter -Presley -Tanner Hazardous Substance Account Act (California Health and Safety Code §25300, et seq.); the Safe Drinking Water and Toxic Enforcement Act ("Proposition 65") (California Health and Safety Code §25249.5, et seq.); and the Porter -Cologne Water Quality Control Act (California Water Code § 13000, et seq.); and any similar federal, state or local laws, all regulations and publications implementing or promulgated pursuant to the foregoing, as any of the foregoing may be amended or supplemented from time to time. "Business Day" means any day other than a Saturday, Sunday or any other day on which Purchaser or Escrow Agent is not open for business. In the event any date, deadline or due date set forth in this Agreement falls on a day that is not a Business Day, then such deadline or due date shall automatically be extended to the next Business Day. "Close" or "Closing" means the close of Escrow as provided herein, which shall not be later than the last day of the Due Diligence Period. "Closing Date" means the date on which the Closing occurs, which date shall be August 29, 2013. "Conditions Precedent for the Benefit of the Seller" shall have the meaning set forth in Section 5 of this Agreement. "Conditions Precedent for the Benefit of the Purchaser" shall have the meaning set forth in Section 6 of this Agreement. "Deposit" shall have the meaning set forth in Section 3(b)(1) of this Agreement. "Due Diligence Period" means the period of time commencing on the Effective Date and ending on August 23, 2013. "Effective Date" is defined above. "Escrow" means the escrow depository and disbursement services to be performed by Escrow Agent pursuant to the provisions of this Agreement. 2 Attachment No. 2 "Escrow Agent" means Carla Burchard at Stewart Title Company, 5740 Fleet Street, Suite 100, Carlsbad, California 92008. "Grant Deed" means a duly executed and acknowledged grant deed conveying fee simple title to the Real Property from the Seller to the Purchaser, in substantially the form attached hereto as Exhibit B and made a part hereof. "Hazardous Materials" means: (1) Those substances included within the definitions of "hazardous substance," "hazardous waste," "hazardous material," "toxic substance," "solid waste," "pollutant" or "contaminant" in the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42 U.S.C. §9601 et seq.); the Resource Conservation and Recovery Act (42 U.S.C. §6901 et seq.); the Clean Water Act (33 U.S.C. §2601 et seq.); the Toxic Substances Control Act (15 U.S.C. §9601 et seq.); the Hazardous Materials Transportation Act (49 U.S.C. § 1801 et seq.); or under any other Environmental Laws. (2) Those substances included within the definitions of "Extremely Hazardous Waste," "Hazardous Waste," or "Restricted Hazardous Waste," under §§25115, 25117 or 25I22.7 of the California Health and Safety Code, or is listed or identified pursuant to §§25140 or 44321 of the California Health and Safety Code. (3) Those substances included within the definitions of "Hazardous Material," "Hazardous Substance," "Hazardous Waste," "Toxic Air Contaminant" or "Medical Waste" under §§25281, 25316, 25501, 25501.1, 25023.2 or 39655 of the California Health and Safety Code. (4) Those substances included within the definitions of "Oil" or a "Hazardous Substance" listed or identified pursuant to §311 of the Federal Water Pollution Control Act, 33 U.S.C. §1321, as well as any other hydrocarbonic substance or by-product. (5) Those substances included within the definitions of "Hazardous Waste," Extremely Hazardous Waste" or an "Acutely Hazardous Waste" pursuant to Chapter 11 of Title 22 of the California Code of Regulations. (6) Those substances listed by the State of California as a chemical known by the State to cause cancer or reproductive toxicity pursuant to §25249.9(a) of the California Health and Safety Code. (7) Any material which due to its characteristics or interaction with one or more other substances, chemical compounds, or mixtures, damages or threatens to damage, health, safety, or the environment, or is required by any law or public agency to be remediated, including remediation which such law or public agency requires in order for the property to be put to any lawful purpose. 3 Attachment No. 2 (8) Any material whose presence would require remediation pursuant to the guidelines set forth in the State of California Leaking Underground Fuel Tank Field Manual, whether or not the presence of such material resulted from a leaking underground fuel tank. (9) Pesticides regulated under the Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. §136 et seq. (10) Asbestos, PCBs, and other substances regulated under the Toxic Substances Control Act, 15 U.S.C. §2601 et seq. (11) Any radioactive material including, without limitation, any "source material," "special nuclear material," "by-product material," "low-level wastes," "high-level radioactive waste," "spent nuclear fuel" or "transuranic waste" and any other radioactive materials or radioactive wastes, however produced, regulated under the Atomic Energy Act, 42 U.S.C. §§201 1 et seq., the Nuclear Waste Policy Act, 42 U.S.C. §§10101 et seq., or pursuant to the California Radiation Control Law, California Health and Safety Code §§25800 et seq. (12) Any material regulated under the Occupational Safety and Health Act, 29 U.S.C. §§651 et seq., or the California Occupational Safety and Health Act, California Labor Code §§6300 et seg. (13) Any material regulated under the Clean Air Act, 42 U.S.C. §§7401 et seq. or pursuant to Division 26 of the California Health and Safety Code. (14) Those substances listed in the United States Department of Transportation Table (49 CFR Part 172.101), or by the Environmental Protection Agency, or any successor agency, as hazardous substances (40 CFR Part 302). (15) Other substances, materials, and wastes that are or become regulated or classified as hazardous or toxic under federal, state or local laws or regulations. (16) Any material, waste or substance that is a petroleum or refined petroleum product, asbestos, polychlorinated biphenyl, designated as a hazardous substance pursuant to 33 U.S.C. §1321 or listed pursuant to 33 U.S.C. §1317, a flammable explosive or a radioactive material. "Immediately Available Funds" means a bank wire transfer or a certified bank or cashier's check. "Improvements" means collectively: (i) any and all buildings, structures and improvements, of any kind whatsoever, located at or affixed to the Real Property; (ii) all rights, privileges and easements appurtenant to the Real Property, if any, including, without limitation, all minerals, oil, gas and other hydrocarbon substances on and under the Real Property, if any; and (iii) all development rights, air rights, and water rights if any, relating to the Real Property. 4 Attachment No. 2 "Permitted Exceptions" means collectively, the (i) the printed exceptions and exclusions in the Title Policy; (ii) the exceptions shown on Schedule B of that certain Preliminary Report dated May 30, 2013, issued by Stewart Title of California, Inc., Order No. 01180-50483, except for that certain Deed of Trust shown as Exception No. 13 thereon and the community property rights of the Seller's spouses shown as Exception No. 14 thereon. ; (iii) real property taxes and assessments which are a lien but not yet payable; (iv) all applicable building, zoning and use restrictions and/or regulations of any municipality, township, county or state; and (v) defects that are shown on the American Land Title Association survey of the Real Property and Improvements which are approved by Purchaser in writing, or deemed approved by Purchaser, as provided in Section 4(c) below. "Property" means collectively, the Real Property and the Improvements. "Purchase Price" shall have the meaning set forth in Section 3(a) of this Agreement. "Purchaser" means the City of National City; provided, however, if the City of National City assigns its interest in this Agreement pursuant to Section 10 of this Agreement, then the term "Purchaser" shall mean such assignee. "Real Property" is defined above. "Seller" means collectively, David Comartin and Robert Comartin. "Title Policy" means a CLTA Owner's Policy of Title Insurance in the amount of the Purchase Price, insuring that title to the fee interest in the Property is vested in the Purchaser subject only to the Permitted Exceptions, which Title Policy shall be obtained through Stewart Title Company. Seller shall pay the cost of the CLTA Owner's Policy of Title Insurance. Purchaser shall pay the cost of any endorsements it desires. Purchaser may obtain an ALTA Owner's Policy of Title Insurance in which event Purchaser shall pay the cost difference between the cost of the ALTA Owner's Policy of Title Insurance and the cost of a CLTA Owner's Policy of Title Insurance. 3. Purchase Price. (a) Total Purchase Price. The purchase price to be paid by the Purchaser for all of the Property shall be One Million Six Hundred Fifty Thousand and No/100 Dollars ($1,650,000.00) ("Purchase Price"). (b) Deposit; Liquidated Damages. (1) Deposit. Purchaser shall make a deposit ("Deposit") into Escrow of Immediately Available Funds in the amount of Five Thousand and No/100 Dollars ($5,000.00) within three (3) Business Days of the Effective Date. The Deposit shall be credited against the Purchase Price. If the Purchaser elects to terminate this Agreement prior to expiration of the Due Diligence Period, as set forth in Section 4 below, then the Deposit shall be immediately returned 5 Attachment No. 2 by Escrow Agent to the Purchaser. At Closing, the Deposit shall be released by Escrow Agent to the Seller. The Deposit, and any interest earned on the Deposit, shall be credited in favor of the Purchaser against the Purchase Price as set forth in Section 3(c), below. (2) LIQUIDATED DAMAGES. THE DEPOSIT SHALL BE REFUNDABLE TO THE PURCHASER AS MAY BE EXPRESSLY PROVIDED FOR IN THIS AGREEMENT. IF ESCROW FAILS TO CLOSE AS A RESULT OF PURCHASER'S DEFAULT HEREUNDER, THE SOLE REMEDY OF THE SELLER SHALL BE TO TERMINATE THIS AGREEMENT BY GIVING WRITTEN NOTICE THEREOF TO PURCHASER AND ESCROW AGENT, WHEREUPON THE SELLER SHALL RETAIN THE DEPOSIT(S) ACTUALLY DEPOSITED BY PURCHASER INTO ESCROW AS LIQUIDATED DAMAGES (AND THE SELLER WAIVES ANY RIGHT TO SPECIFICALLY ENFORCE THIS AGREEMENT SET FORTH IN CALIFORNIA CIVIL CODE SECTION 1680 OR 3389). THEREAFTER, NO PARTY HERETO SHALL HAVE ANY FURTHER LIABILITY OR OBLIGATION TO ANY OTHER PARTY HERETO EXCEPT FOR: (i) THE SELLER'S RIGHT TO RECEIVE AND RETAIN SUCH LIQUIDATED DAMAGES; AND (ii) THE OBLIGATION OF THE PARTIES TO PAY AMOUNTS INTO ESCROW TO PAY A PORTION OF THE FEES AND COSTS OF ESCROW AS SET FORTH IN SECTIONS 5 AND 6 BELOW. THE PARTIES HERETO ACKNOWLEDGE AND AGREE THAT THE SELLER'S ACTUAL DAMAGES IN THE EVENT OF PURCHASER'S DEFAULT HEREUNDER ARE UNCERTAIN IN AMOUNT AND DIFFICULT TO ASCERTAIN, AND THAT SUCH AMOUNT OF LIQUIDATED DAMAGES IS REASONABLE UNDER THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 1671 ET SEQ., CONSIDERING ALL OF THE CIRCUMSTANCES EXISTING ON THE DATE HEREOF INCLUDING, WITHOUT LIMITATION, THE RELATIONSHIP OF SUCH AMOUNT TO THE RANGE OF POTENTIAL HARM TO THE SELLER THAT CAN REASONABLY BE ANTICIPATED AND THE ANTICIPATION THAT PROOF OF ACTUAL DAMAGES RESULTING FROM SUCH DEFAULT WOULD BE COSTLY AND INCONVENIENT. IN PLACING ITS INITIALS IN THE SPACE BELOW, EACH PARTY HERETO SPECIFICALLY CONFIRMS THE ACCURACY OF THE FOREGOING AND THE FACT THAT SUCH PARTY HAS BEEN REPRESENTED BY COUNSEL WHO EXPLAINED THE CONSEQUENCES OF THIS LIQUIDATED DAMAGES PROVISION. THE PROVISIONS OF THIS SECTION 3(B)(2) SHALL SURVIVE THE TERMINATION OF THIS AGREEMENT. refit Seller's Initials Purchaser's Initials (c) Delivery of Remainder of Purchase Price into Escrow. Not less than one (1) Business Day prior to the Closing Date, the Purchaser shall cause Immediately Available Funds to be delivered to the Escrow Agent in an amount equal to the Purchase Price, minus the Deposit and any interest earned on the Deposit, and plus or minus any adjustments for prorations and expenses required under this Agreement. 6 Attachment No. 2 (d) Disbursement to the Seller. Immediately after the Closing, the Escrow Agent shall disburse to the Seller the funds that the Seller is entitled to receive under this Agreement. 4. Due Diligence Period. During the Due Diligence Period, the Purchaser may determine in the Purchaser's sole and absolute discretion, whether to proceed with the purchase of the Property. During the Due Diligence Period, the Purchaser may terminate this Agreement for any reason or for no reason at all. If the Purchaser terminates this Agreement during the Due Diligence Period.. then: (i) all rights and liabilities of the Purchaser and the Seller with respect to this Agreement shall immediately terminate, except for rights and liabilities that specifically survive such termination; (ii) Escrow Agent shall return to the Purchaser all funds or other things deposited in Escrow by the Purchaser; and (iii) Escrow Agent shall return to the Seller all funds or other things deposited in Escrow by the Seller. Provided, however, all fees and costs charged by the Escrow Agent shall be paid one-half (1/2) by the Seller and one-half (1/2) by the Purchaser. (a) Access to the Property and Cooperation. During the Due Diligence Period, and during normal business hours, upon not less than twenty-four (24) hours advance notice to the Seller, Purchaser and its representatives, consultants and attorneys shall have access to entry upon the Property. Purchaser shall indemnify, defend, protect and hold the Seller and all Seller Parties (as defined in Section 7(h)(1) below), and the Property harmless from any losses, costs, damages, claims and/or liabilities, including but not limited to, mechanics' and materialmen's liens and attorney fees and costs proximately caused by such entry upon the Property. In the event Escrow does not close due to an election by the Purchaser not to purchase the Property or a default by the Purchaser, the Purchaser shall, at its sole cost and expense, promptly return the Property to the Seller in the same physical condition it now enjoys, and shall repair any physical damage caused by the Purchaser to the Property as part of or in connection with any such entry upon the Property. The Purchaser is self -insured with excess coverage provided pursuant to an insurance pool. Any agents, consultants or contractors that perform activities on the Property shall maintain: (l) comprehensive public liability and property damage insurance, including direct contractual and contingent liability with limits of $2,000,000 for personal liability to or death of any one person, $2,000,000 for personal injury to or death of any one person on an occurrence basis, $1,000,000 for property damage in any one accident and $2,000,000 policy limit for aggregate operation on an occurrence basis; and (2) comprehensive automobile liability insurance with limits of $1,000,000 for personal injury to or death of any one person, $2,000,000 for personal injury to or death of more than one person in any one accident and $1,000,000 for property damage in any one accident. Certificates of such insurance shall be delivered by the Purchaser to the Seller before entry onto the Property by the Purchaser or its agents, contractors or employees. The Purchaser shall not permit any mechanic's, materialman's, contractor's, subcontractor's or other lien arising from any work done by the Purchaser or its agents pursuant to this Agreement to stand against the Property. If any such lien shall be filed against the Property, the Purchaser shall cause the same to be discharged or bonded within ten (10) days after actual notice of such filing, by payment, deposit, bond or otherwise. The Purchaser's obligations under this Section 4(a) shall survive the termination or expiration of this Agreement and/or Closing. The Purchaser shall have the right during the Due Diligence Period, after providing not less than twenty-four (24) hours advance notice to the Seller, to perform (or cause its consultants and contractors to perform) lead based paint and asbestos testing provided the 7 Attachment No. 2 same are performed in accordance with ASTM published testing standards. Except as set forth in the immediately preceding sentence, if Purchaser desires to do any invasive testing at the Property, the Purchaser may do so only after obtaining Seller's prior written consent to the same, which consent may be withheld or granted on conditions in Seller's sole and absolute discretion. The Purchaser shall promptly restore the Property to the condition the Property was in immediately prior to any such tests, at the Purchaser's sole cost and expense. The Purchaser shall provide the Seller with a complete set of plans, drawings and specifications ("Invasive Testing Plans") that define to the sole satisfaction of the Seller the invasive testing to be performed on the Property and the names of all environmental and other consultants, contractors and subcontractors who will be performing such invasive testing (collectively "Purchaser's Consultants"). The Purchaser shall deliver the names of the Purchaser's Consultants and the Invasive Testing Plans to the Seller concurrently with its request to the Seller that the Purchaser desires to perform invasive testing (unless the names of Purchaser's Consultants have previously been provided to the Seller). (b) Due Diligence Deliveries. Not later than five (5) Business Days after execution and delivery of this Agreement to the Escrow Agent, the Seller shall either provide the Purchaser with true, correct and complete copies of all plans and specifications for the Property (including a set of current as -built plans and specifications), if any. 5. Conditions Precedent for the Benefit of the Seller. The Seller's obligation to Close shall be conditioned upon the satisfaction or emailed or written waiver by the Seller of all of the conditions precedent ("Conditions Precedent for the Benefit of the Seller") set forth in this Section 5. Any of the Conditions Precedent for the Benefit of the Seller may be waived by the Seller unilaterally; and if so waived, such conditions shall be of no further effect hereunder. Any such waiver shall be effective only if the same is expressly waived (i) by email from the Seller to the Purchaser and Escrow Agent; or (ii) in a writing signed by the Seller and delivered to the Purchaser and Escrow Agent. If the Conditions Precedent for the Benefit of the Seller are not satisfied by the deadlines set forth in this Section 5 or expressly waived, the Seller (provided the Seller is not in default hereunder) may provide emailed or written notice of the Seller's conditional termination of this Agreement to the Purchaser and Escrow Agent. After receipt of such notice of conditional termination, the Purchaser shall have ten (10) Business Days to cure any non -satisfaction of a condition or other default specified in the notice of conditional termination; provided, however, the foregoing grace period shall be two (2) Business Days if the unsatisfied condition is a failure by Purchaser to deliver funds required to close on the Closing Date. If such matter remains unsatisfied or the default remains uncured after the expiration of such ten (10) Business Day period, then this Agreement shall terminate at the close of business on such tenth (10th) Business Day (or second (2nd) Business Day if the unsatisfied condition is a failure by Purchaser to deliver funds required to close on the Closing Date). In the event of termination of this Agreement (and by operation of law the Escrow) pursuant to this Section 5, then: (x) as set forth in the liquidated damages provision of Section 3(b)(2) above, all rights and liabilities of the Purchaser and the Seller with respect to this Agreement shall immediately terminate, except those which specifically survive such termination; (y) Escrow Agent deliver the Deposit to the Seller and shall return to the Seller all funds or other things deposited in Escrow by the Seller; and (z) Escrow Agent shall return to the Purchaser all funds or other things deposited in Escrow by the Purchaser, less the Deposit. Provided, however, all fees and costs 8 Attachment No. 2 charged by the Escrow Agent shall be paid one-half (1./2) by the Seller and one-half (1/2) by the Purchaser. Notwithstanding clause (x) of this Section 5, in the event of termination of this Agreement pursuant to this Section 5, the Purchaser and the Seller shall cooperate with one another, execute all documents reasonably necessary and take all reasonable steps as may be required by Escrow Agent in order to accomplish the purposes of this Section 5. (a) Purchaser making the Deposit into Escrow, as set forth in Section 3(b)(1) above. (b) The delivery by the Purchaser into Escrow at least one (1) Business Day prior to Closing of Immediately Available Funds equal to the Purchase Price (less the Deposit and plus or minus expenses and prorations) as required by Section 3(c) above. (c) The delivery by the Purchaser into Escrow of all other documents and instruments required by this Agreement or reasonably required by Seller and/or Escrow Agent to complete the Closing, at least one (1) Business Day prior to Closing. (d) Purchaser not being in default of any of its representations or warranties under this Agreement, or any other material terms or conditions related to Purchaser. (e) As of the Closing Date, the Purchaser has not made an assignment for the benefit of creditors, filed a bankruptcy petition, been adjudicated insolvent or bankrupt, petitioned a court for the appointment of any receiver of, or trustee for, the Purchaser, or commenced any proceeding relating to the Purchaser under any reorganization, arrangement, readjustment of debt, dissolution, or liquidation law or statute of any jurisdiction, whether now or later in effect. 6. Conditions Precedent for the Benefit of the Purchaser. The Purchaser's obligation to Close shall be conditioned upon the satisfaction or emailed or written waiver by the Purchaser of all of the conditions precedent ("Conditions Precedent for the Benefit of the Purchaser") set forth in this Section 6. Any of the Conditions Precedent for the Benefit of the Purchaser may be waived by the Purchaser unilaterally; and if so waived, such conditions shall be of no further effect hereunder. Any such waiver shall be effective only if the same is expressly waived (i) by email from the Purchaser to the Seller and Escrow Agent; or (ii) in a writing signed by the Purchaser and delivered to the Seller and Escrow Agent. If the Conditions Precedent for the Benefit of the Purchaser are not satisfied by the deadlines set forth in this Section 6 or expressly waived, the Purchaser (provided the Purchaser is not in default hereunder) may provide emailed or written notice of the Purchaser's conditional termination of this Agreement to the Seller and Escrow Agent. After receipt of such notice of conditional termination, the Seller shall have ten (10) Business Days to cure any non -satisfaction of a condition or other default specified in the notice of conditional termination. If such matter remains unsatisfied or the default remains uncured after the expiration of such ten (10) Business Day period, then this Agreement shall terminate at the close of business on such tenth (10`h) Business Day. In the event of termination of this Agreement (and by operation of law the Escrow) pursuant to this Section 6, then: (x) except to subparagraph (f) below, the same shall be a default by the Seller (y) Escrow Agent shall return to the Purchaser all funds or other things deposited in Escrow by the Purchaser, including without limitation, the Deposit; and (z) Escrow Agent shall return to the Seller all funds or other things deposited in Escrow by the Seller. Purchaser is not waiving any default by 9 Attachment No. 2 the Seller and nothing contained in this Section 6, including, without limitation, the immediately foregoing sentence shall be a waiver of any right of Purchaser to recover damages from the Seller for failure of any Conditions Precedent for the Benefit of the Purchaser. Provided, however, all fees and costs charged by the Escrow Agent shall be paid one-half (1/2) by the Seller and one-half (1/2) by the Purchaser. (a) The deposit into Escrow by the Seller of the Grant Deed, duly executed and acknowledged, conveying fee simple title to the Property to the Purchaser at least one (1) Business Day prior to Closing. (b) The deposit by the Seller into Escrow of a duly executed affidavit that it is not a foreign person and is a "United States Person" as such term is defined in Section 7761(a)(30) of the Internal Revenue Code of 1986, as amended, at least one (1) Business Days prior to Closing. The affidavit shall be in the form prescribed by federal regulations, if any. (c) The deposit by the Seller into Escrow of a duly executed California Form 593(c) or other evidence that withholding of any portion of the Purchase Price is not required by the Revenue and Taxation Code of California, at least one (1) Business Day prior to Closing. (d) The deposit by the Seller into Escrow of all additional documents and instruments as are reasonably required by the Purchaser and/or Escrow Agent to complete the Closing, at least one (1) Business Day prior to Closing. (e) The Escrow Agent is prepared and obligated to issue the Title Policy in Purchaser's favor upon the recordation of the Grant Deed and there are no exceptions to the Title Policy, except for Permitted Exceptions. (f) Seller not being in default of any of its representations or warranties under this Agreement, or any other material terms or conditions related to Seller. (g) As of the Closing Date, there exists no lease, tenancy or occupancy agreement affecting the Property. (h) As of the Closing Date there is not pending, or threatened to be pending, any action or proceeding by any person or before any government authority, the outcome of which could prohibit the use of the Property as intended by the Purchaser. (i) This Agreement has been formally approved by resolution of the City of National City. 7. Representations and Warranties; Waivers and Releases. When making the representations and warranties set forth in this Section 7, each party making a representation and/or warranty represents that the same are true, correct and complete as of the date hereof and shall be and are true, correct and complete as of the Closing Date. The representations and warranties shall survive the Closing. 10 Attachment No. 2 (a) Representations and Warranties Regarding Authority. The Seller and the Purchaser each hereby represents and warrants to the other that this Agreement and all documents or instruments executed by them which are to be delivered at or prior to the Closing are, or on the Closing Date will be, duly authorized, executed and delivered by the Seller or the Purchaser, as applicable. (b) Representations and Warranties Regarding Enforceability of Agreement. The Seller and the Purchaser each hereby represents and warrants to the other that this Agreement and all documents required hereby to be executed by them shall be valid, legally binding obligations of, and enforceable against, the Seller or the Purchaser, as applicable, in accordance with their terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting the rights of creditors generally and general principles of equity (whether enforcement is sought in equity or at law). (c) Seller Representations and Warranties Pertaining to Legal Matters. The Seller hereby represents and warrants to the Purchaser that: (1) As of the Effective Date and the Closing Date, the Seller is the sole owner of the fee title interest to the Property. (2) There is no pending or threatened proceeding in eminent domain or otherwise, which would affect the Property, or any portions thereof, nor any facts which might give rise to such action or proceeding. (d) Seller Representations and Warranties Pertaining to Options. The Seller hereby represents and warrants to the Purchaser that no person has any option or right of first refusal to purchase the Property or any parts thereof. (e) Material Adverse Changes. If Seller receives any notice or knowledge of anything materially adversely affecting Seller's representations or warranties after the date of this Agreement, then Seller shall immediately notify Purchaser in writing of such fact or circumstance. If Purchaser receives written notice from Seller pursuant to the immediately preceding sentence, and Seller in such notice does not agree to cure the same at or prior to Closing to Purchaser's reasonable satisfaction, then, Purchaser shall have the right to bring an action against Seller on the breach of such representation or warranty. (f) Seller Representation and Warranty Pertaining to Tenants. The Seller hereby represents and warrants to the Purchaser that no person has any lease or other right to occupy the Property or any parts thereof (g) Seller Representation and Warranty Regarding Operation of the Property. The Seller hereby represents and warrants to the Purchaser that there are no oral or written agreements or understandings concerning the Property by which the Purchaser would be bound following the Closing. 11 Attachment No. 2 (h) AS IS CONDITION. PURCHASER HEREBY ACKNOWLEDGES, REPRESENTS, WARRANTS, COVENANTS AND AGREES THAT AS A MATERIAL INDUCEMENT TO SELLER TO EXECUTE AND ACCEPT THIS AGREEMENT AND IN CONSIDERATION OF THE PERFORMANCE BY SELLER OF ITS DUTIES AND OBLIGATIONS UNDER THIS AGREEMENT THAT, EXCEPT AS SPECIFICALLY PROVIDED IN THIS AGREEMENT AND SUBJECT TO SELLER'S EXPRESS REPRESENTATIONS AND WARRANTIES SET FORTH IN SECTION 7 OF THIS AGREEMENT, THE SALE OF THE PROPERTY HEREUNDER IS AND WILL BE MADE ON AN "AS IS, WHERE IS" BASIS, SELLER HAS NOT MADE, DOES NOT MAKE AND SPECIFICALLY NEGATES AND DISCLAIMS ANY REPRESENTATIONS, WARRANTIES OR GUARANTIES OF ANY KIND OR CHARACTER WHATSOEVER, WHETHER EXPRESS OR IMPLIED, ORAL OR WRITTEN, PAST, PRESENT, FUTURE OR OTHERWISE, OF, AS TO, CONCERNING OR WITH RESPECT TO: (1) THE EXISTENCE OF HAZARDOUS MATERIALS OR MOLD UPON THE PROPERTY OR ANY PORTION THEREOF; (2) GEOLOGICAL CONDITIONS, INCLUDING. WITHOUT LIMITATION, SUBSIDENCE, SUBSURFACE CONDITIONS, WATER TABLE, UNDERGROUND WATER RESERVOIRS, LIMITATIONS REGARDING THE WITHDRAWAL OF WATER AND FAULTING; (3) WHETHER OR NOT AND TO THE EXTENT TO WHICH THE PROPERTY OR ANY PORTION THEREOF IS AFFECTED BY ANY STREAM (SURFACE OR UNDERGROUND), BODY OF WATER, FLOOD PRONE AREA, FLOOD PLAIN, FLOODWAY OR SPECIAL FLOOD HAZARD; (4) DRAINAGE; (5) SOIL CONDITIONS, INCLUDING THE EXISTENCE OF INSTABILITY, PAST SOIL REPAIRS, SOIL ADDITIONS OR CONDITIONS OF SOIL FILL, OR SUSCEPTIBILITY TO LANDSLIDES, OR THE SUFFICIENCY OF ANY UNDERSHORING; (6) USES OF ADJOINING PROPERTIES; (7) THE VALUE, COMPLIANCE WITH THE PLANS AND SPECIFICATIONS, SIZE, LOCATION, AGE, USE, DESIGN, QUALITY, DESCRIPTION, DURABILITY, STRUCTURAL INTEGRITY, OPERATION, TITLE TO, OR PHYSICAL OR FINANCIAL CONDITION OF THE PROPERTY OR ANY PORTION THEREOF, OR ANY RIGHTS OR CLAIMS ON OR AFFECTING OR PERTAINING TO THE PROPERTY OR ANY PART THEREOF, INCLUDING, WITHOUT LIMITATION, WHETHER OR NOT THE IMPROVEMENTS COMPLY WITH THE REQUIREMENTS OF TITLE III OF THE AMERICANS WITH DISABILITIES ACT OF 1990, 42 U.S.C. §§ 12181-12183, 12186(B) - 12189 AND RELATED REGULATIONS; (8) THE PRESENCE OF HAZARDOUS MATERIALS IN OR ON, UNDER OR IN THE VICINITY OF THE PROPERTY; (9) THE SQUARE FOOTAGE OF THE PROPERTY OR THE IMPROVEMENTS THEREON; (10) IMPROVEMENTS AND INFRASTRUCTURE, INCLUDING, WITHOUT LIMITATION, THE CONDITION OF THE ROOF, FOUNDATION, FIXTURES, AND PERSONAL PROPERTY, IF ANY; (11) DEVELOPMENT RIGHTS AND EXTRACTIONS; (12) WATER OR WATER RIGHTS; (13) THE DEVELOPMENT POTENTIAL FOR THE PROPERTY; (14) THE ABILITY OF PURCHASER TO REZONE THE PROPERTY OR CHANGE THE USE OF THE PROPERTY; (15) THE ABILITY OF PURCHASER TO ACQUIRE ADJACENT PROPERTIES; (16) THE EXISTENCE AND POSSIBLE LOCATION OF ANY UNDERGROUND UTILITIES; (17) THE EXISTENCE AND POSSIBLE LOCATION OF ANY ENCROACHMENTS; (18) WHETHER THE IMPROVEMENTS ON THE PROPERTY WERE BUILT, IN WHOLE OR IN PART, IN COMPLIANCE WITH APPLICABLE BUILDING CODES; (19) THE STATUS OF ANY LIFE -SAFETY SYSTEMS IN THE 12 Attachment No. 2 IMPROVEMENTS ON THE PROPERTY; (20) THE CHARACTER OF THE NEIGHBORHOOD IN WHICH THE PROPERTY IS SITUATED; (21) THE CONDITION OR USE OF THE PROPERTY OR COMPLIANCE OF THE PROPERTY WITH ANY OR ALL PAST, PRESENT OR FUTURE FEDERAL, STATE OR LOCAL ORDINANCES, RULES, REGULATIONS OR LAWS, BUILDING, FIRE OR ZONING ORDINANCES, CODES OR OTHER SIMILAR LAWS; (22) THE MERCHANTABILITY OF THE PROPERTY OR FITNESS OF THE PROPERTY FOR ANY PARTICULAR PURPOSE (PURCHASER AFFIRMING THAT PURCHASER HAS NOT RELIED ON SELLER'S SKILL OR JUDGMENT TO SELECT OR FURNISH THE PROPERTY FOR ANY PARTICULAR PURPOSE, AND THAT SELLER MAKES NO WARRANTY THAT THE PROPERTY IS FIT FOR ANY PARTICULAR PURPOSE); AND/OR (23) ANY OTHER MATTER CONCERNING THE PROPERTY. NOTWITHSTANDING THE FOREGOING OR ANYTHING TO THE CONTRARY SET FORTH IN THIS AGREEMENT, SELLER IS NOT RELEASED FROM ANY LIABILITY TO PURCHASER FOR FRAUD OR BREACH OF ANY COVENANT, REPRESENTATION OR WARRANTY SET FORTH IN THIS AGREEMENT. Notwithstanding anything to the contrary set forth in this Agreement, including without limitation, this Section 7(h), any right waived by Purchaser and any release by Purchaser, shall only release or waive the Purchaser's right to enforce any judgment (including without limitation, damages, attorneys' fees, costs, expenses or any other compensation of any type whatsoever) personally against only the Seller and SelIer's successors, assigns, officers, directors, shareholders, participants, partners, affiliates, employees, representatives, invitees and agents (collectively, the "Seller Parties") or any of them. Purchaser is not waiving any right to bring any action against any of the "Non -Released Parties" (defined below) or waiving recovery against or otherwise releasing or agreeing to forego Purchaser's rights with respect to any insurance policy, or any other person (other than the right to enforce a judgment personally against any of the Seller Parties), including without limitation persons obligated to the Seller Parties, by right of subrogation or otherwise, prior owners or occupants of the Property, the tenants, persons performing work at the Property and/or any insurance policies held by any or all such persons (collectively, the "Non -Released Parties"). PURCHASER ACKNOWLEDGES THAT AS OF THE EXPIRATION OF THE DUE DILIGENCE PERIOD, PURCHASER SHALL HAVE COMPLETED ALL PHYSICAL AND FINANCIAL EXAMINATIONS RELATING TO THE ACQUISITION OF THE PROPERTY HEREUNDER (IT BEING ACKNOWLEDGED AND AGREED THAT PURCHASER SHALL BE DEEMED TO HAVE INSPECTED EACH APARTMENT UNIT WITHIN THE PROPERTY) AND WILL ACQUIRE THE SAME SOLELY ON THE BASIS OF SUCH EXAMINATIONS AND THE TITLE INSURANCE PROTECTION FOR THE PROPERTY AFFORDED BY THE TITLE POLICY, EXCEPT AS SPECIFICALLY PROVIDED IN THIS AGREEMENT AND SUBJECT TO SELLER'S EXPRESS REPRESENTATIONS AND WARRANTIES SET FORTH IN SECTION 7 OF THIS AGREEMENT. PURCHASER FURTHER ACKNOWLEDGES AND AGREES THAT ANY INFORMATION PROVIDED OR TO BE PROVIDED WITH RESPECT TO THE PROPERTY WAS OBTAINED FROM A VARIETY OF SOURCES AND THAT THE SELLER HAS NOT MADE ANY INDEPENDENT INVESTIGATION OR VERIFICATION OF SUCH INFORMATION AND MAKES NO REPRESENTATIONS AS TO THE ACCURACY OR COMPLETENESS OF SUCH INFORMATION, EXCEPT AS SPECIFICALLY PROVIDED IN THIS AGREEMENT 13 Attachment No. 2 AND SUBJECT TO SELLER'S EXPRESS REPRESENTATIONS AND WARRANTIES SET FORTH IN SECTION 7 OF THIS AGREEMENT. SELLER SHALL NOT BE LIABLE FOR ANY NEGLIGENT MISREPRESENTATION OR FAILURE TO INVESTIGATE THE PROPERTY NOR SHALL SELLER BE BOUND IN ANY MANNER BY ANY VERBAL OR WRITTEN STATEMENTS, REPRESENTATIONS, APPRAISALS, ENVIRONMENTAL ASSESSMENT REPORTS, OR OTHER INFORMATION PERTAINING TO THE PROPERTY OR THE OPERATION THEREOF, FURNISHED BY SELLER, OR ANY REAL ESTATE BROKER, AGENT, REPRESENTATIVE, EMPLOYEE, SERVANT OR OTI-IER PERSON ACTING ON SELLER'S BEHALF EXCEPT FOR REPRESENTATIONS AND WARRANTIES EXPRESSLY PROVIDED IN SECTION 7 OF THIS AGREEMENT. IT IS ACKNOWLEDGED AND AGREED THAT THE PROPERTY IS SOLD BY SELLER AND PURCHASED BY PURCHASER SUBJECT TO THE FOREGOING. NOTWITHSTANDING THE FOREGOING OR ANYTHING TO THE CONTRARY SET FORTH IN THIS AGREEMENT, SELLER IS NOT RELEASED FROM ANY LIABILITY TO PURCHASER FOR FRAUD OR BREACH OF ANY COVENANT, REPRESENTATION OR WARRANTY SET FORTH IN THIS AGREEMENT. PURCHASER HEREBY ACKNOWLEDGES AND AGREES THAT PURCHASER IS FULLY AWARE OF THE AGE OF THE PROPERTY, THAT OVER TIME VARIOUS EVENTS MAY HAVE OCCURRED ON THE PROPERTY WHICH EVENTS MAY BE TYPICAL AND(OR) ATYPICAL OF EVENTS OCCURRING TO OTHER PROPERTIES OF SIMILAR AGE TO THE PROPERTY AND SIMILARLY LOCATED IN THE CITY OF NATIONAL CITY AND (OR) THE COUNTY OF SAN DIEGO, CALIFORNIA, AND THAT SUCH EVENTS MAY INCLUDE, WITHOUT LIMITATION, SLAB LEAKS, MOLD, FIRE, SHIFTING, AND VIOLATIONS OF LAWS, ORDINANCES, RULES, REGULATIONS, PERMITS, APPROVALS, LICENSES AND(OR) ORDERS OF GOVERNMENTAL AGENCIES WITH JURISDICTION OVER THE PROPERTY. THE CLOSING OF THE PURCHASE OF THE PROPERTY BY PURCHASER HEREUNDER SHALL BE CONCLUSIVE EVIDENCE THAT: (A) PURCHASER HAS FULLY AND COMPLETELY INSPECTED (OR HAS CAUSED TO BE FULLY AND COMPLETELY INSPECTED) THE PROPERTY; AND (B) PURCHASER ACCEPTS THE PROPERTY AS BEING IN GOOD AND SATISFACTORY CONDITION AND SUITABLE FOR PURCHASER'S PURPOSES. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, EXCEPT FOR RELIANCE ON REPRESENTATIONS AND WARRANTIES EXPRESSLY PROVIDED IN SECTION 7 OF THIS AGREEMENT, PURCHASER SHALL PERFORM AND RELY SOLELY UPON ITS OWN INVESTIGATION CONCERNING ITS INTENDED USE OF THE PROPERTY, AND THE PROPERTY'S FITNESS THEREFOR. PURCHASER FURTHER ACKNOWLEDGES AND AGREES THAT SELLER'S COOPERATION WITH PURCHASER WHETHER BY PROVIDING DOCUMENTS RELATING TO THE PROPERTY OR PERMITTING INSPECTION OF THE PROPERTY, SHALL NOT BE CONSTRUED AS ANY WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, OF ANY KIND WITH RESPECT TO THE PROPERTY, OR WITH RESPECT TO THE ACCURACY, COMPLETENESS, OR RELEVANCE OF THE DOCUMENTS PROVIDED TO 14 Attachment No. 2 PURCHASER BY SELLER IN RELATION TO THE PROPERTY, PROVIDED THAT THE FOREGOING SHALL NOT BE A LIMITATION OR MODIFICATION OF THE REPRESENTATIONS AND WARRANTIES EXPRESSLY PROVIDED FOR IN SECTION 7 OF THIS AGREEMENT. SELLER'S INITIALS (i) Indemnity and Release. PURCHASER'S INITIALS (1) Indemnity. For the purposes of this Section 7(i), the term "Claims" shall mean any and all claims, obligations, liabilities, causes of action, suits, debts, liens, damages, judgments. losses, demands, orders, penalties, settlements, costs and expenses (including, without limitation, attorneys' fees and costs and any and all costs and expenses related to, whether directly or indirectly, any and all clean-up, remediation, investigations, monitoring, abatement, mitigation measures, fines or removal with respect to Hazardous Materials) of any kind or nature whatsoever. The definition of "Claims" shall include, without limitation, Claims under contract law or tort law. Purchaser acknowledges that but for Purchaser's agreement to each and every provision of this Section 7(i), Seller would not have entered into the Agreement. Purchaser, on behalf of itself, its successors, assigns and successors -in -interest ("Successors"), shall indemnify, defend, protect and hold Seller and Seller's successors, assigns, partners, affiliates and members and all their respective officers, directors, shareholders, participants, partners, affiliates, employees, representatives, invitees and agents (collectively, "Seller Parties") harmless from and against any and all Claims resulting from, related to, or based upon, whether directly or indirectly: (i) the breach by Purchaser of any representation, warranty, covenant or obligation contained in the Agreement, or in any other agreement, document, exhibit or instrument related hereto or referenced herein; (ii) any Claim or Claims, if the basis of such Claim or Claims arose on or after the Closing, except as noted in subparagraph (iv) below, and if the basis of such Claim or Claims arose from, is based upon, relates to or pertains to, whether directly or indirectly, the operation, management and use of the Property; (iii) any Claim or Claims which Claim or Claims (or the basis for which) arose from, is based upon, relates to or pertains to, whether directly or indirectly, any act or omission of Purchaser or any of its employees, agents or representatives; and (iv) (A) any Claim or Claims that relate to the condition of the Property on or after the Close of Escrow, including any judgment, order or settlement under or otherwise pursuant to a lawsuit, and (B) any Claim or Claims that relate to defects in the Property (including, without limitation, patent and latent construction defects), regardless of whether said defects or the cause of the same arose either before or after the Close of Escrow, including any judgment, order or settlement under or otherwise pursuant to the lawsuit. Any defense of any or all of the Seller Parties referenced in this Section 7(i)(I), shall be at the Purchaser's sole cost and expense and by counsel selected by the Purchaser, subject to the reasonable approval of the indemnified person, which counsel may, without limiting the rights of any of the Seller Parties pursuant to the next succeeding sentence of this Section 7(i)(1), also represent the Purchaser in such investigation, action or proceeding. If any of the Seller Parties that is being indemnified determines reasonably and in good faith that its defense by the Purchaser is reasonably likely to cause a conflict of interest or is being conducted in a manner which is prejudicial to such persons interests, such indemnified person may elect to conduct its 15 Attachment No. 2 own defense through counsel of its own choosing, subject to the reasonable approval of the Purchaser, and at the expense of the Purchaser. (2) Release and § 1542 Waiver. Notwithstanding the following or anything to the contrary set forth in this Agreement, the Seller is not released from any liability to the Purchaser for fraud or breach of any covenant or warranty set forth in this Agreement. Subject to the immediately preceding sentence and the Purchaser's right to rely on the Seller's express representations and warranties set forth in Section 7 hereof, Purchaser for itself and on behalf of each of its successors and/or assigns (collectively, the "Releasors") by this general release of known and unknown claims (this "Release") hereby irrevocably and unconditionally release and forever discharge Seller and each of the Seller Parties (collectively, the "Releasees") or any of them, from and against any and all Claims of any kind or nature whatsoever, WHETHER KNOWN OR UNKNOWN, suspected or unsuspected, fixed or contingent, liquidated or unliquidated which any of the Releasors now have, own, hold, or claim to have had, owned, or held, against any of the Releasees arising from, based upon or related to, whether directly or indirectly any facts, matters, circumstances, conditions or defects (whether patent or latent) of all or any kinds, related to, arising from, or based upon, whether directly or indirectly, the Property, including without limitation, (i) the physical condition, quality and state of repair of the Property conveyed, (ii) any latent or patent defect affecting the Property conveyed, and (iii) the presence of Hazardous Materials in, on, about or under the Property or which have migrated from adjacent lands to the Property or from the Property to adjacent lands. Except for Claims for Seller's fraud or the breach of any representations and warranties of the Seller expressly provided for in Section 7 of this Agreement, Releasors hereby further agree as follows: (i) Releasors acknowledge that there is a risk that subsequent to the execution of this Agreement, Releasors may discover, incur, or suffer from Claims which were unknown or unanticipated at the time this Release is executed, including, without limitation, unknown or unanticipated Claims which, if known by Releasors on the date this Release is being executed, may have materially affected Releasors' decision to execute this Agreement. Releasors acknowledge that Releasors are assuming the risk of such unknown and unanticipated Claims and agree that this Release applies thereto. Releasors expressly waive the benefits of Section 1542 of the California Civil Code, which reads as follows: "A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor." (ii) Releasors represent and warrant that Releasors have been represented by independent counsel of Releasors' own choosing in connection with the preparation and review of the Release set forth herein, that Releasors have specifically discussed with such counsel the meaning and effect of this Release and that Releasors have carefully read and understand the scope and effect of each provision contained herein. Releasors further represent and warrant that Releasors do not rely and have not relied upon any representation or statement made by any of 16 Attachment No. 2 the Releasees or any of their representatives, agents, employees, attorneys or officers with regard to the subject matter, basis or effect of this Release. (iii) Releasors represent and warrant to Releasees that Releasors have not and shall not assign or transfer or purport to assign or transfer any Claim or Claims or any portion thereof or any interest therein, and shall indemnify, defend, protect and hold the Releasees harmless from and against any Claim or Claims based on or arising out of, whether directly or indirectly, any such assignment or transfer, or purported assignment or transfer. SELLER'S INITIALS PURCHASER'S INITIALS It is specifically intended that each of the Seller Parties shall be third party beneficiaries of this Section 7(i). (3) Survival. The provisions of this Section 7(i) shall survive the Closing and, as applicable, the termination of this Agreement. (j) Waiver of Subrogation; Survival. Purchaser hereby waives any right of subrogation as to Seller or the Seller Parties. Each and every provision of this Section 7 shall, except as may be expressly limited in this Section 7, survive the Closing and, as applicable, the termination of this Agreement, and, but for Purchaser's agreement to each and every provision of this Section 7, Seller would not have executed this Agreement. 8. Condemnation of the Property. (a) If between the Effective Date and the Closing Date, any condemnation or eminent domain proceeding is commenced that will result in the taking of any part of the Property, Purchaser may, at Purchaser's election, either: (1) Terminate this Agreement by giving written or emailed notice to the Seller and the Escrow Agent (in which event all remaining funds or other things deposited in Escrow by Purchaser, including without limitation, the Deposit, shall be returned to the Purchaser immediately from Escrow, together with any interest earned thereon and all fees and costs charged by the Escrow Agent shall be paid one-half (1/2) by the Seller and one-half (1/2) by the Purchaser; or (2) Proceed with the Closing with no reduction in the Purchase Price, in which event the Seller shall assign to the Purchaser all of the Seller's rights, titles and interests to any award made for the condemnation or eminent domain action. (b) Notice. If the Seller obtains notice of the commencement of or the threatened commencement of eminent domain or condemnation proceedings with respect to all of any portion of the Property, the Seller shall notify the Purchaser in writing. 9. Broker's. 17 Attachment No. 2 (a) Seller's Broker. The Seller hereby represents and warrants to the Purchaser that the Seller has engaged Margo Villarin of JDM Properties ("Seller's Broker") to represent the Seller in the transaction that is the subject of this Agreement and that the Seller has not engaged the services of any other real estate agent or broker with respect to the transaction that is the subject of this Agreement. The Seller shall pay any and all remuneration, brokerage commissions, fees and other compensation to the Seller's Broker pursuant to an agreement between the Seller and the Seller's Broker. (b) Purchaser's Broker. The Purchaser hereby represents and warrants to the Seller that the Purchaser has not engaged the services of any real estate agent or broker with respect to the transaction that is the subject of this Agreement. (c) Indemnity. The Purchaser and the Seller each agree that, to the extent any real estate commission, brokerage commission or finder's fee shall be earned or claimed in connection with this Agreement or the Closing, the payment of such fee or commission, and the defense of any action in connection therewith, shall be the sole and exclusive obligation of the party who requested (or is alleged to have requested) the services of the broker or finder. In the event that any claim, demand or cause of action for any such commission or finder's fee is asserted against the party to this Agreement who did not request such services (or is not alleged to have requested such services), the party through whom the broker or finder is making the claim shall indemnify, defend (with an attorney of the indemnitee's choice), protect and hold harmless the other from and against any and all such claims, demands and causes of action and expenses related thereto, including, without limitation, attorneys' fees and costs. (d) Survival. The provisions of this Section 9 shall survive the Closing or termination of this Agreement. (e) Scope of Broker Duty. Buyer and Seller acknowledge and agree that JDM Properties: (1) Did not decide what price Buyer should pay or Seller should accept. (2) Does not guarantee the condition of the Property. (3) Shall not be responsible for identifying defects that are not known to JDM Properties. (4) Shall not be responsible for providing legal or tax advice regarding any aspect of the transaction entered into by Buyer and Seller. (5) Shall not be responsible for providing other advice or information that exceeds the knowledge, education and experience required to perform real estate licensed activity. Buyer and Seller agree to seek legal and tax advice from appropriate professionals. 18 Attachment No. 2 (6) Shall not be responsible for verifying square footage, representations of others or information contained in inspection reports, advertisements, or flyers. (7) Does not guarantee the performance, adequacy or completeness of inspections, services, products or repairs provided or made by Seller or others. 10. Assignment. The Purchaser shall not assign any of its rights or delegate any of its duties under this Agreement without the prior written consent of the Seller, which consent may be withheld or granted in Seller's sole and absolute discretion; provided, however, the Purchaser may assign this Agreement to an entity in which the Purchaser has a controlling or majority interest without the prior written consent of the Seller provided Purchaser and such assignee execute an assignment agreement in form and substance reasonably acceptable to Seller. 11. Notices. All notices under this Agreement shall be in writing and sent (a) by certified or registered mail, return receipt requested, in which case notice shall be deemed delivered three (3) Business Days after deposit, postage prepaid in the United States Mail, (b) overnight by a nationally recognized overnight courier such as UPS Overnight, or FedEx, in which case notice shall be deemed delivered one (1) Business Day after deposit with that courier, (c) by personal delivery, in which case notice shall be deemed delivered upon the actual date of delivery, or (d) by email, in which case notice shall be deemed delivered upon the actual date of delivery. All notices shall be delivered to the following addresses: If to Seller: If to Purchaser: Copy to: David Comartin and Robert Comartin :21 to .b MoemisHoRt- Ltrwxi 64. till 13 Facsimile No. Email: ic1t, evm Arl:nA) wil City of National City Attn: Brad Raulston 1243 National City Boulevard National City, CA 91950 Facsimile No. (619) 336-4286 Email: braulston@nationalcityca.gov Christensen & Spath LLP Attention: Walter F. Spath III 550 West C Street, Suite 1660 San Diego, CA 92101 Facsimile No. (619) 236-8307 Email: wfs@candslaw.net The addresses above may be changed by written notice to the other party; provided however, that no notice of a change of address shall be effective until actual receipt of the notice. 19 Attachment No. 2 12. Risk of Loss. (a) Damage or Destruction. Subject to the provisions of this Section 12(a), the risk of loss or damage to the Property until the close of Escrow will be borne by Seller. Upon the occurrence of any damage to or destruction of the Property, Seller shall within thirty (30) days after the occurrence of such damage or destruction give written notice to Purchaser ("Damage Notice") specifying the estimated cost to repair or restore the Property and an estimate of the insurance proceeds, if any, that will be available with respect to such damage or destruction. The close of Escrow shall be appropriately delayed to provide adequate time for Seller to give the Damage Notice and Purchaser to make its election provided for below. (b) Damage in Excess of $100,000. If prior to the close of Escrow there is damage to or destruction of the Property that will cost in excess of One Hundred Thousand Dollars ($100,000) to repair or restore, Purchaser shall have the right by written notice given to Seller within ten (10) days of Purchaser receiving the Damage Notice, to elect to: (i) close Escrow in such damaged condition, in which event the Purchase Price shall not be reduced (but the Seller shall be obligated to pay the deductibles under the applicable insurance policy or policies) and Seller shall not be obligated to repair or restore the Property and all insurance proceeds shall be assigned and payable to Purchaser, and if Seller receives any such insurance proceeds, they shall be immediately remitted by Seller to Purchaser at Closing or, if received by Seller after Closing, promptly after receipt; (ii) terminate this Agreement, in which event the Deposit and all interest accrued thereon shall be immediately returned to Purchaser, and neither party shall have any further rights or obligations to the other party, except neither party shall be relieved of any obligations provided for in this Agreement which expressly survives its termination. (c) Damage of $100,000 or Less. If prior to the close of Escrow there is damage to or destruction of the Property that will cost One Hundred Thousand Dollars ($100,000) or less to repair or restore, Purchaser shall nevertheless close Escrow with the Property in such damaged condition, the Purchase Price shall not be reduced (but the Seller shall be obligated to pay the deductibles under the applicable insurance policy or policies) and Seller shall not be obligated to repair or restore the Property, and all insurance proceeds shall be assigned and payable to Purchaser, and if Seller should receive any such insurance proceeds, they shall be immediately remitted to Purchaser. 13. Prorations. Real property taxes and assessments and utility costs, and other expenses of operating the Property (provided, however, no proration shall be made with regard to any capital improvements) shall be prorated as of the close of Escrow. Seller shall pay all documentary transfer taxes. Seller shall pay all real property taxes and assessments applicable to the period prior to the close of Escrow, and if any such taxes are unpaid after the close of Escrow, then Seller shall pay them promptly and in any event within ten (10) days after Purchaser's request (which shall include a copy of the relevant tax bill). 14. General Provisions. (a) Governing Law. This Agreement shall be interpreted and construed in accordance with California law, without regard to any choice of law principles. 20 Attachment No. 2 (b) Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. (c) Captions. The captions in this Agreement are inserted for convenience of reference and in no way define, describe or limit the scope or intent of this Agreement or any of the provisions of this Agreement. (d) Binding Effect. This Agreement shall be binding upon and inure to the benefit of the parties and their respective legal representatives, successors, heirs and permitted assigns. (e) Modifications; Waiver. No waiver, modification, amendment, discharge or change of this Agreement shall be valid unless it is in writing and signed by the party against which the enforcement of the modification, waiver, amendment, discharge or change is sought. (0 Entire Agreement. This Agreement contains the entire agreement between the parties relating to Purchaser's acquisition of the Property from the Seller and all prior or contemporaneous agreements, understandings, representations or statements, oral or written, are superseded. (g) Partial Invalidity. Any provision of this Agreement which is unenforceable, invalid, or the inclusion of which would adversely affect the validity, legality, or enforcement of this Agreement shall have no effect, but all the remaining provisions of this Agreement shall remain in full effect. (h) Survival. Provisions of this Section 19 shall survive the Closing or the termination of this Agreement. (i) No Third -Party Rights. Nothing in this Agreement, express or implied, is intended to confer upon any person, other than the parties to this Agreement and their respective successors and assigns, any rights or remedies. (j) Time of Essence. Time is of the essence in this Agreement. (k) Attorneys' Fees. The parties agree that the prevailing party in litigation for the breach and/or interpretation and/or enforcement of the terms of this Agreement shall be entitled to their expert witness fees, if any, as part of their costs of suit, and attorneys' fees as may be awarded by the court, pursuant to California Code of Civil Procedure ("CCP") Section 1033.5 and any other applicable provisions of California law, including, without limitation, the provisions of CCP Section 998. All claims, disputes, causes of action or controversies shall be subject solely to the jurisdiction of the San Diego Superior Court, Downtown Branch. (1) Relationship. Nothing contained in this Agreement shall be deemed or construed by the parties or by any third person to create a relationship of principal and agent or partnership 2l Attachment No. 2 or a joint venture between the Purchaser and the Seller or between any of them and any third party. (m) Recording. Neither this Agreement nor a memorandum hereof shall be recorded. (n) Purchaser Approval. Where this Agreement refers to an action or approval of the Purchaser, it shall mean the approval of the Community Development Executive Director of the Purchaser, or designee, unless otherwise provided. (o) Exhibits and Recitals Incorporated. All exhibits referred to in this Agreement are hereby incorporated in this Agreement by this reference, regardless of whether or not the exhibits are actually attached to this Agreement. The Recitals to this Agreement are hereby incorporated in this Agreement by this reference. (p) Independent Counsel. Seller and Purchaser each acknowledge that: (a) they have been given the opportunity to be represented by independent counsel in connection with this Agreement; (b) they have executed this Agreement with the advice of such counsel, if such counsel was retained; and (c) this Agreement is the result of negotiations between the parties hereto and the advice and assistance of their respective counsel, if such counsel was retained. The fact that this Agreement was prepared or negotiated by Purchaser's or Seller's counsel as a matter of convenience shall have no import or significance. Any uncertainty or ambiguity in this Agreement shall not be construed against either party due to the fact that Purchaser's or Seller's counsel prepared or negotiated this Agreement in its final form. (q) 1031 Exchange. In order to effect an Internal Revenue Code section 1031 tax - deferred exchange of the Property, Seller has the right to engage an accommodator to fulfill Seller's obligations hereunder; in which case Purchaser shall cooperate to accomplish such exchange provided each of the following conditions are satisfied: (i) Purchaser shall, in such cooperation, incur no cost, liability or obligation for consideration (or otherwise) other than the costs and consideration called for in this Agreement; and (ii) the Closing shall not be delayed or prevented. (r) Tolling of Deadlines. Any periods of time, deadlines or time or day limitations set forth in this Agreement, including without limitation, the Due Diligence Period, the deadline for Closing, the deadline for making the Deposit, shall all be automatically extended by one (1) Business Day for each Business Day that the Seller fails to timely provide any notice, report, materials, studies, documentation or other information required by this Agreement. (s) Capacity and Authority. All individuals signing this Agreement for a party which is a corporation, limited liability company, partnership or other Iegal entity, or signing under a power of attorney, or as a trustee, guardian, conservator, or in any other legal capacity, represent and warrant that they have the necessary capacity and authority to act for, sign and bind the respective entity or principal on whose behalf they are signing. IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written. ?? Attachment No. 2 SELLER: David Comartin cHwN1 '9. Robe Comartin [SIGNATURES CONTINUED ON FOLLOWING PAGE] Attachment No. 2 PURCHASER: City of National City By: Print Name: Its: Approved as to Form: By: Claudia Gacitua Silva City Attorney 24 Attachment No. 2 EXHIBIT "A" PROPERTY LEGAL DESCRIPTION Real property in the City of National City, County of San Diego, State of California, described as follows: PARCEL 1: THAT CERTAIN PARCEL OF LAND SITUA I IN THE CITY OF NATIONAL CITY, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, BEING A PORTION OF LOTS 1 TO 10, INCLUSIVE, IN BLOCK 175 OF NATIONAL CITY ACCORDING TO MAP THEREOF NO, 348 FILED OCTOBER 2, 1882, IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, AND A PORTION OF THE SOUTHEASTERLY HALF OF THE CLOSED PORTION OF 17TH STREET ABUTTING UPON SAID LOT 1, MORE PARTICULARLY DESCRIBED AS FOLLOWS: BEGINNING AT THE MOST EASTERLY CORNER OF SAID LOT 10 IN BLOCK 175, SAID CORNER BEING IN THE NORTHWESTERLY LINE OF 18TH STREET AS SHOWN ON SAID MAP; THENCE SOUTHWESTERLY ALONG THE SOUTHEASTERLY LINE OF SAID LOT 10, A DISTANCE OF 42.00 FEET TO A LINE PARALLEL WITH AND DISTANT 17.00 FEET NORTHEASTERLY, MEASURED AT RIGHT ANGLES, FROM THE CENTER LINE OF SAN DIEGO & ARIZONA EASTERN RAILWAY COMPANY'S MAIN TRACT (SAN DIEGO-SAN YSIDRO); THENCE NORTHWESTERLY ALONG SAID PARALLEL LINE. 290.00 FEET TO THE CENTER LINE OF SAID 17TH STREET; THENCE NORTHEASTERLY ALONG SAID CENTER LINE, 48.00 FEET TO THE NORTHWESTERLY PROLONGATION OF THE NORTHEASTERLY LINE OF SAID LOT I IN BLOCK 175; THENCE SOUTHEASTERLY ALONG SAID PROLONGATION AND THE NORTHEASTERLY LINE OF SAID LOTS 1 TO 10, A DISTANCE OF 290.00 FEET TO THE POINT OF BEGINNING. TOGETHER WITH THAT PORTION OF THE SOUTHWESTERLY 1/2 OF THE ALLEY ADJOINING SAID LOTS 6 THROUGH 10 ON THE NORTHEAST AS VACATED AND CLOSED TO PUBLIC USE. EXCEPT THAT PORTION OF SAID LAND LYING BELOW A DEPTH OF 500.00 FEET, MEASURED VERTICALLY, FROM THE CONTOUR OF THE SURFACE OF SAID PROPERTY; HOWEVER, GRANTOR. OR ITS SUCCESSORS AND ASSIGNS, SHALL NOT HAVE THE RIGHT FOR ANY PURPOSE WHATSOEVER TO ENTER UPON, INTO OR THROUGH THE SURFACE OF SAID PROPERTY OR ANY PART THEREOF LYING BETWEEN SAID SURFACE AND 500.00 FEET BELOW SAID SURFACE, AS EXCEPTED IN THE DEED RECORDED FEBRUARY 7, 1980. AS FILE NO. 80-044143. PARCEL 2: 25 Attachment No. 2 LOTS 13, 14, 15, 18 AND 17 IN BLOCK 115 OF NATIONAL CITY, IN THE CITY OF NATIONAL CITY, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 348, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, OCTOBER 2, 1882. EXCEPTING FROM SAID LOT 13, THE SOUTHERLY 20 FEET THEREOF, TOGETHER WITH THAT PORTION OP THE NORTHEASTERLY 1/2 OF THE ALLEY ADJOINING SAID LOTS 14 THROUGH 17 AND THE REMAINDER PORTION OF LOT 13 ON THE SOUTHWEST AS VACATED AND CLOSED TO PUBLIC USE. PARCEL 3: LOTS 18 AND 19 IN BLOCK 175 OF NATIONAL CITY, IN THE CITY OF NATIONAL CITY, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO THE MAP THEREOF NO. 348, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY. APN: 559-086-13-00, 559-086-12-00, 559-086-05-00, and 559-086-03-00 26 Attachment No. 2 EXHIBIT "B" GRANT DEED WHEN RECORDED MAIL TO: MAIL TAX STATEMENTS TO: SPACE ABOVE THIS LINE FOR RECORDER'S USE GRANT DEED FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, do hereby GRANT to [ 1, organized under the laws of the State of [ 1, the real property in the County of San Diego, State of California, described on Exhibit "A" attached hereto and incorporated herein by this reference. David Comartin Robert Comartin Dated , 20l 3 Dated , 2013 27 Attachment No. 2 ACCEPTANCE This is to certify that the interest(s) in real property conveyed by this instrument to the City of National City, are hereby accepted by the undersigned officer on behalf of the City of National City, pursuant to authority conferred by resolution of the City of National City, Resolution No. , adopted on , 2013, and the grantee consents to recordation thereof by its duly authorized officer. City of National City By: Dated: , 2013 Print Name: Its: Approved as to Form: By: Claudia Gacitua Silva City Attorney 28