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HomeMy WebLinkAbout2013 CON CDC HA - WI-TOD Project - Purchase and Sale AgreementPURCHASE AND SALE AGREEMENT (Westside TOD Affordable Site, National City, 91950) (APNs: 559-124-05-00, 560-391-08-00, and 560-396-06-00) THIS PURCHASE AND SALE AGREEMENT ("Agreement") is dated as of the 20th day of August, 2013 ("Effective Date") by and between City of National City ("Seller") and the Community Development Commission -Housing Authority of the City of National City ("Purchaser"). RECITALS A. The Seller owns the fee interest in that certain parcel of real property legally described in Exhibit A-1 attached hereto ("Parcel 1") and the fee interest in that certain parcel of real property legally described in Exhibit A-2 attached hereto ("Parcel 2"). Parcel 1 and Parcel 2, are defined hereinbelow, collectively as the "Real Property." The Real Property is generally bounded by 19`h Street, Harding Avenue, 22nd Street and Hoover Avenue in National City, California. B. The successor agency to the Community Development Commission as the National City Redevelopment Agency ("Successor Agency') is subject to the enforceable obligation commonly referred to as the Westside Infill Transit Oriented Development (WI-TOD) Disposition and Development Agreement ("DDA"), entered into June 21, 2011 with Paradise Creek Housing Partners, LP. The DDA requires the Real Property to be acquired for and developed into a 201 unit affordable housing project. The Purchaser's purchase of Parcel 1 and Parcel 2 is being undertaken pursuant to the requirements of the DDA and as an enforceable obligation of the Successor Agency. The Purchaser accepted the affordable housing functions of the Community Development Commission of the City of National City as the Redevelopment Agency of the City of National City pursuant to resolution number 2012-01. The value of the consideration for the Real Property (i.e., the Parcel 1 Purchase Price for Parcel 1 and the Parcel 2 Purchase Price for Parcel 2), is not less than the appraised value of the Real Property. The consideration being paid for Parcel 1 is the Parcel 1 Purchase Price of Three Million Eight Hundred Fifteen Thousand and No/100 Dollars ($3,815,000.00), which equals the appraised value of Parcel 1 as determined by that certain Land Appraisal performed by Lea & Company effective as of June 27, 2013, but dated June 30, 2013. The consideration being paid for Parcel 2 is the Parcel 2 Purchase Price of Three Million Two Hundred Twenty Thousand and No/100 Dollars ($3,220,000.00), which equals the appraised value of Parcel 2 as determined by that certain Land Appraisal performed by Lea & Company effective as of June 27, 2013, but dated June 30, 2013. 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. C. The Purchaser is acquiring Parcel 1 in part utilizing United States Department of Housing and Urban Development HOME funds. After Closing, the Seller will temporarily lease the Property back from the Purchaser on a month -to -month basis for a total consideration of $1.00 per month. After the Seller vacates the Property, the Purchaser shall cause Parcel 1 to be developed as the "Phase 1 Project," as defined in the DDA, which shall be an affordable rental 1 housing project for persons and families of very low and low income. Construction and operation of the Phase 1 Project shall be governed by all applicable United States Department of Housing and Urban Development regulations and shall be consistent with the California Community Redevelopment Law whether or not specifically referenced in this Agreement. Failure of the Purchaser to cause Parcel 1 to be developed as an affordable rental housing project for persons and families of very low and low income shall be a default hereunder. This obligation shall not be merged into the Grant Deed and shall survive the Closing. 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, Sale and Leaseback. In consideration of the mutual 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, Leaseback. The Seller shall deliver possession of the Property to Purchaser at Closing, subject only to the Title Exceptions, all as defined hereinbelow. Notwithstanding the foregoing, after Closing the Purchaser will allow the Seller to lease the Property from the Purchaser on a month -to -month basis for a total consideration of $1.00 per month, as set forth in the Lease. 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. "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 2 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. "Closing Date" means the date on which the Closing occurs, which date shall be August 28, 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. "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. "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 the form attached hereto as Exhibit B. "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. 3 (2) Those substances included within the definitions of "Extremely Hazardous Waste," "Hazardous Waste," or "Restricted Hazardous Waste," under §§25115, 25117 or 25122.7 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. (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. §§2011 et seq., the Nuclear Waste Policy Act, 42 U.S.C. 4 §§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 seq. (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. "Lease" means a lease in the form attached hereto as Exhibit C. "Parcel 1" means that certain parcel of real property legally described in Exhibit A-1 attached hereto. "Parcel 1 Purchase Price" means the purchase price to be paid by the Purchaser for Parcel 1, which shall be Three Million Eight Hundred Fifteen Thousand and No/100 Dollars ($3,815,000.00), which amount equals the appraised value of Parcel 1 as determined by that certain Land Appraisal performed by Lea & Company effective as of June 27, 2013, but dated June 30, 2013. A portion of the Parcel 1 Purchase Price only, is being paid by the Purchaser utilizing Two Million Ninety -Four Thousand and No/100 Dollars ($2,094,000.00) of United States Department of Housing and Urban Development HOME funds. None of the United States Department of Housing and Urban Development HOME funds are being used to acquire Parcel 2. After the Seller vacates the Property, the Purchaser shall cause Parcel 1 to be developed as the "Phase 1 Project," as defined in the DDA, which shall be an affordable rental housing project for 5 persons and families of very low and low income. Construction and operation of the Phase 1 Project shall be governed by all applicable United States Department of Housing and Urban Development regulations and shall be consistent with the California Community Redevelopment Law whether or not specifically referenced in this Agreement. The Purchaser shall cause Parcel 1 to be restricted in accordance with the United States Department of Housing and Urban Development HOME regulations (24 CFR Part 92) and in accordance with the California Community Redevelopment Law. "Parcel 2" means that certain parcel of real property legally described in Exhibit A-2 attached hereto. "Parcel 2 Purchase Price" means the purchase price to be paid by the Purchaser for Parcel 2, which shall be Three Million Two Hundred Twenty Thousand and No/100 Dollars ($3,220,000.00), which amount equals the appraised value of Parcel 2 as determined by that certain Land Appraisal performed by Lea & Company effective as of June 27, 2013, but dated June 30, 2013. After the Seller vacates the Property, the Purchaser shall cause Parcel 2 to be developed as the "Phase 2 Project," as defined in the DDA, which shall be an affordable rental housing project for persons and families of very low and low income. Construction and operation of the Phase 1 Project shall be consistent with the California Community Redevelopment Law whether or not specifically referenced in this Agreement. The Purchaser shall cause Parcel 2 to be restricted in accordance with the California Community Redevelopment Law. "Permitted Exceptions" means collectively, the (i) the printed exceptions and exclusions in the Title Policy; (ii) the exceptions shown as items A-E and 1-9 on that certain Preliminary Report dated as of June 12, 2013, issued by Stewart Title of California, Inc., Order No. 01180- 50484; (iii) real property taxes and assessments which are a lien but not yet payable; and (iv) all applicable building, zoning and use restrictions and/or regulations of any municipality, township, county or state. "Property" means collectively, the Real Property and the Improvements. "Purchase Price" means collectively, the Parcel 1 Purchase Price and the Parcel 2 Purchase Price, which total Seven Million Thirty -Five Thousand and No/100 Dollars ($7,035,000.00). "Purchaser' means the Community Development Commission -Housing Authority of the City of National City; provided, however, if the Community Development Commission -Housing Authority of 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" means collectively, Parcel 1 and Parcel 2. "Seller" means the City of National City. 6 "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. Purchaser shall pay the cost of the CLTA Owner's Policy of Title Insurance and any endorsements it desires. 3. Purchase Price. (a) Purchase Price. The Seven Million Thirty -Five Thousand and No/100 Dollars ($7,035,000.00) Purchase Price shall be paid by Purchaser to Seller as follows: (1) Two Million Ninety -Four Thousand and No/100 Dollars ($2,094,000.00) of United States Department of Housing and Urban Development HOME funds shall be payable at Closing, all of which is being paid by the Purchaser to acquire Parcel 1 only; and (2) The Four Million Nine Hundred Forty -One Thousand and No/100 Dollars ($4,941,000.00) balance of the Purchase Price (constituting the remaining balance of the purchase price for Parcel 1 in the total amount of $1,721,000 and the full purchase price for Parcel 2 in the total amount of $3,220,000) shall be paid by the Purchaser to the Seller with interest at the rate of zero percent (0.00%) in annual installments equal to the annual amount the Purchaser receives from any ground leases Parcel 1 and Parcel 2 and from the residual receipts loans that the Purchaser will be making to the affordable housing developers that will construct affordable housing projects on each of Parcel 1 and Parcel 2 pursuant to the DDA. At Closing, the Purchaser shall execute a promissory note in favor of Seller in a form acceptable to the Seller and Purchaser. (b) Deposit; Liquidated Damages. (1) Deposit. Purchaser shall make a deposit ("Deposit") into Escrow of Immediately Available Funds in the amount of One Thousand and No/100 Dollars ($1,000.00) 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 Closing, then the Deposit shall be immediately returned 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) LIOUIDATED 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 7 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 TERMINATIIN OF THIS AGREEMEN er 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 $2,094,000.00 ($2,093,000.00 minus the Deposit). (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. The Purchaser has completed its due diligence with respect to the Property. 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 8 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 (1061) 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 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 in the amount 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. (f) This Agreement has been formally approved by resolution of the City of National City. 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 9 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 (10th) 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 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. 10 (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, except for the lease of the property from the Purchaser back to the Seller, as described in Section 1(b), above. (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 Community Development Commission -Housing Authority 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. (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. 11 (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, except for the Seller's right to lease the Property from the Seller as described in Section 1(b), above. (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. (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 12 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 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 Seller'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 13 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 PURCHASER SHALL HAS 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 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 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 OTHER 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 1N 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, 14 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 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 AG EMENT. S L "S ITIALS PURCfiASS INIT1 (i) Indemnity and Release. (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 15 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)(1), 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 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: 16 (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 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 ignment or transfer, or purported gnment or transfer. S INITIALS ER'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. 17 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 Commission. The Purchaser and Seller each hereby represents and warrants to the other that it has not engaged the services of any real estate agent or broker with respect to the transaction that is the subject of this Agreement. 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. The provisions of this Section 9 shall survive the Closing or termination of this Agreement. 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) 18 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 Purchaser: If to Seller: Copy to: Community Development Commission -Housing Authority of the City of National City Attn: Alfredo Ybarra 1243 National City Boulevard National City, CA 91950 Facsimile No. (619) 336-4286 Email: alfredoy@nationalcityca.gov 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. 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 1:he right by written notice given to Seller 19 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. (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. 20 (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. (f) 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 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. Where this Agreement refers to an action or approval of the Seller, it shall mean the approval of the City Manager, 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 21 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) Tolling of Deadlines. Any periods of time, deadlines or time or day limitations set forth in this Agreement, 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. (r) Capacity and Authority. All individuals signing this Agreement for a party which is a corporation, limited liability company, partnership or other legal 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. PURCHASER: Communi i elopment Commission -Housing Authority of the City of National City By. / /` ' •n Morrison, Chairman Approved as to Form: By: Clau General a Silva 1 [SIGNATURES CONTINUED ON FOLLOWING PAGE] 22 SELLER: City of National City By: Ron forrison;ZVlayor Approred as to Form: By: Cl . . s' ^ a . Silva City Attorn 23 EXHIBIT "A-1" PARCEL 1 LEGAL DESCRIPTION Real property in the City of National City, County of San Diego, State of California, described as follows: Lots 1 to 22 inclusive of Block 107; and Lots 1 to 22 inclusive of Block 108 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; Together with that portion of Coolidge Avenue between 20th Street and 22nd Street, and 21 St Street between Harding Avenue and Hoover Avenue as set forth in that certain Order of Vacation (Resolution No. 8338 of the City Council of the City of National City) recorded April 8, 1963 as file no. 59590 of Official Records; And those portions of the Unnamed Alley lying within Blocks 107 and 108 of said map no. 348 as set forth in the certain Order of Vacation (Resolution No. 9816 of the City Council of the City of National City) recorded May 12, 1969 as file no. 82961 of Official Records 24 Exhibit "A-1" PARCEL 1 LEGAL DESCRIPTION Real property in the City of National City, County of San Diego, State of California, described as follows: Parcel 2: Lots 7 to 16 inclusive of Block 85 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 therefrom that portion of land as set forth in that certain Corporation Grant Deed recorded November 20, 1964 as file no. 211364 of Official Records. In addition, that portion of Coolidge Avenue between 20th Street and 22 Street, and 21 st Street between Harding Avenue and Hoover Avenue as set forth in that certain Order of Vacation (Resolution No. 8338 of the City Council of the City of National City) recorded April 8, 1963 as file no. 59590 of Official Records; And those portions of the Unnamed Alley lying within Block 85 of said map no. 348 as set forth in the certain Order of Vacation (Resolution No. 9816 of the City Council of the City of National City) recorded May 12, 1969 as file no. 82961 of Official Records. Parcel 3: Lots 1 to 22 inclusive of Block 86 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. In addition, that portion of Coolidge Avenue between 20th Street and 22nd Street, and 21 st Street between Harding Avenue and Hoover Avenue as set forth in that certain Order of Vacation (Resolution No. 8338 of the City Council of the City of National City) recorded April 8, 1963 as file no. 59590 of Official Records; And the Unnamed Alley lying within Block 86 of said map no. 348 as set forth in the certain Order of Vacation (Resolution No. 9816 of the City Council of the City of National City) recorded May 12, 1969 as file no. 82961 of Official Records 25 Exhibit "B" GRANT DEED 26 Exhibit "C" LEASE 27 JOINT ESCROW INSTRUCTIONS (Westside TOD Affordable Site, National City, 91950) August 22, 2013 TO: Carla Burchard Julie Albers Stewart Title Commercial Escrow Team 5740 Fleet Street, Suite 100 Carlsbad, CA 92008 Your Order No. 01180-50484 1. Opening of Escrow. The Community Development Commission -Housing Authority of the City of National City ("Purchaser") and City of National City ("Seller") have opened the above - referenced escrow ("Escrow") with you ("Escrow Agent") and hereby authorize and instruct Escrow Agent as set forth herein, with respect to that certain real property ("Property") described in Preliminary Report dated as of June 12, 2013, issued by Stewart Title of California, Inc., Order No. 01180-50484. In the event any date, deadline or due date set forth in these Joint Escrow Instructions or the Purchase and Sale Agreement, as defined below, 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. Any capitalized term that is not defined in these Joint Escrow Instructions shall have the meaning set forth in the Purchase and Sale Agreement. In the event of a conflict between any term or provision of the Purchase and Sale Agreement and any term or provision of these Joint Escrow Instructions, the tern or provision of these Joint Escrow Instructions shall control. 2. Deposit of Documents. (a) Deliveries Now. Enclosed herewith is a copy of the fully -executed Purchase and Sale Agreement dated as of August 20, 2013 ("Purchase and Sale Agreement"), between the Seller and Purchaser. (b) Deliveries Prior to Closing. In the event all conditions to Closing are satisfied, then not less than one (1) business day prior to Closing, the Seller and Purchaser shall deliver to Escrow Agent, the fully -executed, original grant deed conveying the Property in fee simple from Seller to the Purchaser. 3. Deposit and Funding. The total aggregate purchase price to be paid by the Purchaser for all of the Property is Seven Million Thirty -Five Thousand and No/100 Dollars ($7,035,000.00) ("Purchase Price"). The Purchase Price shall be payable by Purchaser, as set forth in this Section 3. (a) Concurrently with the delivery of these Joint Escrow Instructions to you, the Purchaser is depositing into Escrow the amount of One Thousand and No/100 Dollars ($1,000.00) ("Deposit"), which amount is being used to pay a portion of the purchase price for Parcel 1 only. 1 (b) In the event all conditions to Closing set forth in Sections 5 and 6 of the Purchase and Sale Agreement are satisfied, then not less than one (1) business day prior to the Closing Date, the Purchaser shall cause Two Million Ninety -Three Thousand and No/100 Dollars ($2,093,000.00) to be wired to the Escrow Agent, which amount is being used to pay a portion of the purchase price for Parcel 1 only. The remainder of the Purchase Price is being paid with an unsecured seller carry -back promissory note, which is being handled outside of Escrow. 4. Conditions to Closing. Escrow Agent may close the Escrow as set forth in Section 6 of these Joint Escrow Instructions, when, and only when all conditions to Closing set forth in Sections 5 and 6 of the Purchase and Sale Agreement are satisfied, and: (a) Escrow Agent has delivered to the Seller and Purchaser true and complete copies of all of the escrow instructions that Escrow Agent has received all other parties to the above -referenced escrow, including any amendments or supplemental instructions, and any assignments or demands that have been deposited with or delivered to Escrow Agent in connection with the escrow. (b) Escrow Agent is prepared and obligated to issue in Purchaser's favor, upon the recordation of the Grant Deed, a standard form ALTA Owner's Policy of Title Insurance with liability equal to the amount of the Purchase Price ($7,035,000.00) showing title to the Property vested in the Purchaser, subject and subordinate only to the (i) the printed exceptions and exclusions in the Title Policy; (ii) the exceptions shown as items A-E and 1-9 on that certain Preliminary Report dated as of June 12, 2013, issued by Stewart Title of California, Inc., Order No. 01180-50484; (iii) real property taxes and assessments which are a lien but not yet payable; and (iv) all applicable building, zoning and use restrictions and/or regulations of any municipality, township, county or state. 5. Prorations and Apportionments. (a) No Prorations. Escrow Agent shall not make any prorations with respect to the Property. (b) Title Insurance and Related Costs. Escrow Agent shall provide the ALTA Owner's Policy of Title Insurance described in Section 4(b), above, to the Purchaser. The Seller shall pay the cost of the ALTA Owner's Policy of Title Insurance. (c) Payment of Taxes. The Seller shall pay all taxes, including, but not limited to, sales tax or transfer tax imposed upon the conveyance of the Property to Purchaser, if any. Purchaser and Seller anticipate that no documentary or other local transfer tax will be imposed upon the sale of the Property to Purchaser, because such a sale to Purchaser is exempt from transfer tax, however, Purchaser makes no representation to Seller that such exemption will be obtained. Purchaser shall use its best efforts to assist Seller in achieving that result. If there is a transfer tax, the Seller shall pay the same. (d) Escrow Fees and Costs Paid by Seller. All Escrow fees and costs charged by the Escrow Agent for escrow services shall be paid by the Seller. 2 (e) Legal and Related Fees. Each party shall pay its own legal fees. 6. Procedure for Closing. Once all of the conditions set forth in Section 4, above, have been satisfied, Escrow Agent shall close the Escrow as set forth in this Section 6, by: (a) Recording the Grant Deed. (b) Issuing the ALTA Owner's Policy of Title Insurance described in Section 4(b), above, to the Purchaser. (c) Disbursing to the Seller the cash portion of the Purchase Price ($2,094,000.00), less any applicable fees and costs. (d) Preparing and delivering to the Seller and the Purchaser signed copies of all Escrow Agent's closing statements showing all receipts and disbursements of the Escrow. 7. Delivery of Instruments and Documents. (a) To Seller. All instruments and documents that are to be delivered by Escrow Agent to the Seller shall be personally delivered or mailed to the Seller at: c/o Christensen & Spath LLP 550 West C Street, Suite 1660 San Diego, CA 92101 Attn.: Walter F. Spath III (b) To Purchaser. All instruments and documents that are to be delivered by Escrow Agent to Purchaser shall be personally delivered or mailed to Purchaser at: c/o Christensen & Spath LLP 550 West C Street, Suite 1660 San Diego, CA 92101 Attn.: Walter F. Spath III 8. Sole Instructions; Amendment. These Joint Escrow Instructions constitute the complete and only escrow instructions of the Seller and the Purchaser and shall revoke and supersede any prior oral or written instructions Escrow Agent may have received from the Seller or the Purchaser. The Seller and the Purchaser may revoke, cancel, waive, amend, supplement or permit deviations from, any term or condition of these Joint Escrow Instructions in writing or by email, provided that the Seller and the Purchaser consent to the same. Any purported oral revocation, cancellation, waiver, amendment, supplement or deviation of these Joint Escrow Instructions, shall be ineffective and invalid. 3 SELLER: City of National City 4 By: on Morrison Mayor Appred as to Form: PURCHASER: Community Development Commission -Housing Authority of the City of National City By: By: on Morrison, Chairman Clauaia Gaci General Coun 4 PROMISSORY NOTE (Westside TOD Affordable Site) ("Note") National City, California August 30 , 2013 1. Principal; No Interest. For value received and in consideration of the Purchase and Sale Agreement (Westside TOD Affordable Site) dated as of August 20, 2013 ("Agreement"), by and between the City of National City ("Seller") and Community Development Commission - Housing Authority of the City of National City ("Maker"), Maker promises to pay to Seller, or order, at 1243 National City Boulevard, National City, California 91950-4397, or such other place as the holder may from time to time designate by written notice to Maker, the principal sum of Four Million Nine Hundred Forty -One Thousand and No/100 Dollars ($4,941,000.00). This Note shall not bear interest. The principal amount of this Note represents the remaining balance of the purchase price for Maker's purchase of Parcel 1 (as defined in the Agreement) from Seller and the full purchase price for Maker's purchase of Parcel 2 (as defined in the Agreement) from Seller, pursuant to the Agreement. All capitalized terms which are not defined herein shall have the meaning ascribed to them in the Agreement. 2. Term of Loan, Due Date and Right of Prepayment. Payments shall be due and payable as follows: (a) The Maker intends to ground lease Parcel 1 and Parcel 2, as such terms are defined in the Agreement, and make one or more residual receipts loans to the developers of Parcel 1 and Parcel 2, for the development of a 201 unit affordable housing project pursuant to that certain Disposition and Development Agreement ("DDA") entered into June 21, 2011 by and between Paradise Creek Housing Partners, L.P. and the Community Development Commission of the City of National City in its capacity as the Redevelopment Agency of the City of National City. Those ground leases may or may not require annual ground rent payments to be made to the Maker. Those residual receipts loans will require the developers of Parcel 1 and Parcel 2 to make annual payments to the Maker based on the residual receipts generated by the operations on Parcel 1 and Parcel 2, if any. The Maker shall pay to the Seller an amount equal to the amount received from the developers of Parcel 1 and Parcel 2 (whether from ground rent or residual receipts payments) within ten (10) business days of Maker's receipt of the same. The Maker shall have no obligation to make any payments to Seller hereunder, unless and until the Maker receives funds from the developers of Parcel 1 and Parcel 2, except that as set forth in Section 2(b), below. (b) Notwithstanding the provisions of Section 2(a), above, if all amounts otherwise payable hereunder are not paid in full within sixty-five (65) years from the date first set forth above, all principal shall be due and payable. (c) This Note shall be payable in full upon acceleration of this Note pursuant to the provisions of Paragraph 4 of this Note. 1 (d) This Note shall be payable in full upon the conveyance of all or any part of the fee interest in Parcel 1 or Parcel 2. (e) This Note may be prepaid in whole or in part at any time and, from time to time, without notice or penalty. Any prepayment shall be allocated first to unpaid interest, if any, and then to principal. 3. Unsecured Note. This Note shall be unsecured. 4. Acceleration Upon Default. Notwithstanding Section 2, above, or anything contained herein to the contrary, in the event of: (i) any default in the performance of any of the terms, covenants and conditions contained in this Note or the Agreement, in each case after the expiration of applicable cure periods, or (ii) in the event of the filing of a bankruptcy proceeding by or against Maker which is not dismissed within ninety (90) days thereafter, then all sums owing by Maker to the Seller shall at the option of the Seller immediately become due and payable. These remedies shall be in addition to any and all other rights and remedies available to the Seller, either at law or in equity. 5. Costs Paid by Maker. Maker agrees to pay the following costs and expenses incurred by the holder of this Note, or adjudged by a court: (a) reasonable costs, expenses and attorneys' fees paid or incurred in connection with the collection or enforcement of this Note, whether or not suit is filed; and (b) costs of suit and such sum as the court may adjudge as reasonable attorneys' fees in any action to enforce payment of this Note or any part of it. 6. Payment and Interest Calculation. Payments shall be applied to interest first, if any, and then to any unpaid principal balance. 7. Recourse Note. In any action brought to enforce the obligations of Maker under this Note, the judgment or decree shall be enforceable against Maker. 8. Late Charge. If any installment due hereunder is not paid within fifteen (15) days from the date due, Maker promises to pay a "late charge" of $100.00 to defray the expense incident to handling any such delinquent payment or payments. 9. Severability. If any provision of this Note is determined to be void by court of competent jurisdiction, such determination shall not affect any other provisions of this Note, and such other provisions shall remain in full force and effect. 10. Non -Waiver. No delay in demanding or failure to demand performance hereunder shall constitute a waiver by the holder of its right to subsequently demand such performance or to exercise any remedies for any default hereunder. Further, in order to be effective, any waiver of any of the Seller's rights and remedies hereunder must be in a writing signed by the Seller. Further waiver by the Seller of any right hereunder shall not constitute a waiver of any other right, including but not limited to the right to exercise any and all remedies for a different or subsequent event of default. 2 Maker: Community Development Commission -Housing Authority of the City of National City By: Ron Morrison, Chairman Approv- • as to Form: By: Cl. . Gaci!• : Silva General Co 3 --- Revised --- RESOLUTION NO. 2013 —129 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NATIONAL CITY AUTHORIZING THE MAYOR TO EXECUTE A PURCHASE AND SALE AGREEMENT WITH THE COMMUNITY DEVELOPMENT COMMISSION — HOUSING AUTHORITY OF THE CITY OF NATIONAL CITY ("CDC -HA") FOR THE SALE OF TWO PARCELS OF LAND TOTALING 6.299 ACRES FOR A TOTAL PURCHASE PRICE OF $7,035,000, GENERALLY BOUNDED BY 19TH STREET, HARDING AVENUE, 22ND STREET, AND HOOVER AVENUE, IN THE CITY OF NATIONAL CITY, FOR THE DEVELOPMENT OF 201 AFFORDABLE HOUSING UNITS AS PHASE I AND II OF THE WESTSIDE INFILL TRANSIT ORIENTED DEVELOPMENT PROJECT, APPROVING A LOAN FROM THE CITY OF NATIONAL CITY TO THE CDC -HA FOR $4,941,000 TO COMPLETE SAID PURCHASE, AND APPROVING THE MONTH TO MONTH LEASE BACK OF THE SUBJECT PROPERTY FROM THE CDC -HA WHEREAS, the City is the owner of that certain real property (the "Property") in the City of National City, State of California, consisting of two legal parcels ("Parcel 1 and Parcel 2") totaling 6.299 acres, generally bounded by 19th Street, Harding Avenue, 22nd Street, and Hoover Avenue; and WHEREAS, the Successor Agency to the Community Development Commission as the National City Redevelopment Agency (Successor Agency) is subject to the enforceable obligation commonly referred to as the Westside Infill Transit Oriented Development (WI-TOD) Development and Disposition Agreement (DDA), entered into June 21, 2011 with Paradise Creek Housing Partners, LP (Developer); and WHEREAS, the DDA requires the Property to be acquired for and developed into a 201 unit affordable housing project (the Project) as described in the DDA; and WHEREAS, the sale of Parcel 1 and Parcel 2 to the CDC -HA is being undertaken so that the Successor Agency can fulfill its enforceable obligations pursuant to the requirements of the DDA; and WHEREAS, in accordance with California Health and Safety Code section 34176, the CDC -HA has accepted the affordable housing functions of the former redevelopment agency pursuant to resolution number 2012-01; and WHEREAS, the value of the consideration for the Property, pursuant to proposed Purchase and Sale Agreement (Agreement) will not be less than the appraised value; and WHEREAS, appraisals completed within the last 60 days indicate a value of $3.815 million for Parcel I and $3.22 million for Parcel 2 for a total value of the Property of $7.035 million; and WHEREAS, the CDC -HA will use $2,094,000 in HOME funds to acquire Parcel I and the CDC -HA has requested a loan in the amount of $4,941,000 from the City in order to provide full consideration for the remaining balance of the appraised value of Parcel 1 in the amount of $1,721,000, and the full appraised value of Parcel 2 in the amount of $3,220,000; and WHEREAS, the CDC -HA would repay the loan with ground lease income and loan repayments made by the developer of the Project; and WHEREAS, the Property will continue to be temporarily occupied by the National City Public Works Department, and the CDC -HA will provide a month -to -month lease agreement for $1.00 per month until the operation is relocated to another site; and --- Revised --- Resolution No. 2013 —129 Page Two WHEREAS, the sale of the Property pursuant to the proposed Agreement will improve the quality of life of the residents of National City and its visitors through the elimination of blight and the development of a quality Project in the area by providing for the reuse and redevelopment of a brownfield site; and WHEREAS, all actions required by all applicable law with respect to the proposed Agreement have been taken in an appropriate and timely manner; and WHEREAS, the City Council has duly considered all terms and conditions of the proposed Agreement and believes that the disposition of the Property pursuant thereto, loan, and month to month lease, are in the best interests of the City of National City and the health, safety, and welfare of its residents, and in accord with the public purposes and provisions of applicable state and local law requirements. NOW, THEREFORE, BE IT RESOLVED that the City Council authorizes the Mayor to execute the Purchase and Sale Agreement between the City of National City and the Community Development Commission -Housing Authority for the sale of 6.299 acres of land for a total purchase price of $7,035,000. Said Purchase and Sale Agreement is on file in the Office of the City Clerk. BE IT FURTHER RESOLVED that the City Council accepts the partial payment of the purchase price by the CDC -HA from the use of HOME Grant funds in the amount of $2,094,000. BE IT FURTHER RESOLVED that the City Council authorizes the City Manager or her designee to execute any and all loan documents necessary to make the unsecured loan of $4,941,000 provided by the City to the CDC -HA for consideration of value owed on the purchase price, and as necessary to fulfill the terms the Purchase and Sale Agreement, including escrow documents. Said loan documents are on file in the Office of the City Clerk. BE IT FURTHER RESOLVED that the City Council authorizes the Mayor to execute a Month -to -Month Lease Agreement for the Property until City Public Works operations are relocated to another site. Said Lease Agreement is on file in the Office of the City Clerk. BE IT FURTHER RESOLVED that the City Council determines that the WI-TOD project was previously addressed in the Final Environmental Impact Report for the Westside Specific Plan (State Clearinghouse No. 2008071092) which was certified by the City Council on March 16, 2010, thus satisfying CEQA. PASSED and ADOPTED this 20th day of Augus3. on Morrison, Mayor ATTEST: ' ROV- . AS TO FORM: (-tLI Mic ael R. Dalla, City Clerk udia -citua Silva City Attor Passed and adopted by the Council of the City of National City, California, on August 20, 2013 by the following vote, to -wit: Ayes: Councilmembers Cano, Morrison, Natividad, Rios, Sotelo-Solis. Nays: None. Absent: None. Abstain: None. AUTHENTICATED BY: RON MORRISON Mayor of the City of National City, California A 1'4' City CI rk of the City of ational City, California By: Deputy I HEREBY CERTIFY that the above and foregoing is a full, true and correct copy of RESOLUTION NO. 2013-129 of the City of National City, California, passed and adopted by the Council of said City on August 20, 2013. City Clerk of the City of National City, California By: Deputy CITY OF NATIONAL CITY, CALIFORNIA COUNCIL AGENDA STATEMENT C MEETING DATE: August 20, 2013 AGENDA ITEM NO.19 TEM TITLE: Kesolution of the City Council of the City of National City authorizing the Mayor to execute a Purchase and Sale Agreement with the Community Development Commission - Housing Authority of the City of National City ("CDC -HA") for the sale of two parcels of land totaling 6.299 acres for a total purchase price of $7,035,000, generally bounded by 19th Street, Harding Avenue, 22nd Street, and Hoover Avenue, in the City of National City, for the development of 201 affordable housing units as Phase I and II of the Westside In -fill Transit Oriented Development Project, approving a loan from the City of National City to the CDC -HA for $4,941,000 to complete said purchase, and approving the Month -to -Month Leaseback of the subject property from the CDC -HA. PREPARED BY: PHONE: Carlos Aguirre, Comm. Dev. Spec. II 619.336.4391 EXPLANATION: Please see attached background report and explanation. DEPARTMENT: Housing, Grants,& Asset Management APPROVED FINANCIAL STATEMENT: APPROVED: 6'1,6, e? ACCOUNT NO. Finance APPROVED: MIS HOME funds reallocated to the CDC -HA will provide $2,094,000 and the City will carry back a loan for $4,941,000. ENVIRONMENTAL REVIEW: The Certified Environmental Impact Report for the Westside Specific Plan analyzed a transit oriented development for this site. ORDINANCE: INTRODUCTION: FINAL ADOPTION: STAFF RECOMMENDATION: Adopt the Resolution BOARD / COMMISSION RECOMMENDATION: The Planning Commission approved the Tentative Parcel Map and Variance on June 5, 2012 and approved a Parcel Map Waiver on May 20, 2013 that included findings of consistency with the General Plan for the WITOD Project. ATTACHMENTS: 1. Background Report and Explanation 2. Purchase and Sale Agreement 3. Promissory Note and Grant Deed 4. Month -to -Month Lease Attachment No. 1 Background Report and Explanation The Westside Infill Transit Oriented Development (WI-TOD), also known as the Paradise Creek Affordable Housing Project, is a proposed 201-unit affordable housing development on the east side of Paradise Creek, and the expansion of Paradise Creek Educational Park on the west side of the creek. The proposed project is based on a concept that was developed through a neighborhood and stakeholder design participation process and incorporated into the Westside Specific Plan, which was adopted in 2010. The current proposed project design was developed with continuing public input and participation through stakeholder and community meetings. Development Agreement. After adoption of the Westside Specific Plan, a request for proposals was issued, and the applicant was selected to develop the site. The applicant entered into a Disposition and Development Agreement with the Community Development Commission to develop the project. The agreement is an enforceable obligation of the Successor Agency to the Community Development Commission (SA). The entire site is owned by the City; however, the housing portion of the site will be transferred to the Housing Authority. Pursuant to the Disposition and Development Agreement, the developer will be required to enter into a long-term ground lease for the housing site and will manage and operate the housing development, including resident services and programs. The Community Development Commission -Housing Authority will retain ownership of the housing site. Housing Development. The housing development side of the project would consist of two phases on the east side of Paradise Creek. The first phase would be built on approximately four acres on the southern portion of the site and would include 109 units within two buildings and a separate residential services building. The second phase would be built on approximately two acres on the northern portion of the site and would include 92 units within two buildings. The anticipated unit mix would include studios, one - bedroom, two -bedroom, and three -bedroom units on three to four levels within the four residential buildings. The residential buildings would generally be oriented along 22nd Street and Hoover Avenue and set back from Paradise Creek with open space along the creek boundary. Park Development. The park development side of the project would add nearly four acres to Paradise Creek Educational Park on the west side of the creek. Paradise Creek Housing Partners is required to construct the park improvements pursuant to the Disposition and Development Agreement. The proposed improvements would include a naturalized planting buffer along Paradise Creek, a lawn area, a community garden, a playground, a plaza, picnic tables, a pedestrian/bicycle path along the length of the creek, and tree and shrub plantings along the western edge of the park. Park ownership would be maintained by the City. Certificate of Compliance. Consistent with the Parcel Map Waiver approved by the National City Planning Commission on May 20, 2013 for the WITOD Project, the City of National City can file a Certificate of Compliance that creates new legal parcels for the Attachment No. 1 development. The entire project site consisted of nine parcels and portions of adjacent rights -of -way; the Certificate of Compliance divides seven of the parcels into four parcels to allow the development of the housing on the east side of Paradise Creek and the park on the west side of the creek. The parcel map consists of 10.27 acres. Parcel 1 is 4.14 acres and would be developed with 109 units and the residential services building as Phase I of the housing project. Parcel 2 is 2.16 acres and would be developed with 92 units in Phase II. Parcel 3 is 1.33 acres and would be developed with park improvements. Proposed Parcel 4 is 2.60 acres and would delineate Paradise Creek and Paradise Creek Educational Park. The Certificate of Compliance creates developable parcels that are configured based on the proposed phasing of the WITOD project and to allow the leasing of the parcels pursuant to the Disposition and Development Agreement. Reallocation of HOME Funds. The City of National City is a Project Jurisdiction that receives an annual entitlement grant allocation of HOME Investment Partnership (HOME) Program funds from the U.S. Department of Housing and Urban Development for the preservation and development of affordable housing in National City. The City allocated $95,492 of HOME funds in Fiscal Year 2011 and $2,000,000 in Fiscal Year 2013 to Community HousingWorks on behalf of Paradise Creek Housing Partners, L.P. to fund predevelopment activities related to the development of 109 affordable housing units included in Phase I of the Westside In -fill Transit Oriented Development Project. Community HousingWorks has consented to the reallocation of said HOME funds to the Community Development Commission -Housing Authority ("CDC -HA") for the purpose of acquiring the 4.14 acre parcel (Parcel 1) of land designated for 109 newly constructed affordable rental units at the corner of 22nd and Hoover Avenue. The CDC -HA has submitted an application to the City of National City for the reallocation of a total of $2,095,492 in HOME funds for the acquisition of land and development activities eligible under the HOME program. Acquisition of Parcels 1 and 2 by the CDC- Housing Authority. The City is the current owner of Parcel 1 and 2 totaling 6.3 acres, generally bounded by 19th Street, Harding Avenue, 22nd Street, and Hoover Avenue at WITOD development site. The Successor Agency to the Community Development Commission as the National City Redevelopment Agency (SA) is subject to the enforceable obligation commonly referred to as the Westside Infill Transit Oriented Development Development and Disposition Agreement (DDA), entered into June 21, 2011 with Paradise Creek Housing Partners, LP (Developer). The sale of Parcel 1 and 2 to the CDC -HA is being undertaken so that the SA can fulfill its enforceable obligations pursuant to the requirements of the WITOD DDA. The CDC -HA has accepted the affordable housing functions of the former redevelopment agency. Appraisals completed within the last 60 days indicated a value of $3.815 million for Parcel I and $3.22 million for Parcel 2 for a total value of the Property of $7.035 million. The CDC -HA intends to use $2,094,000 in HOME funds to acquire Parcel I and the CDC -HA has also requested a loan in the amount of $4,941,000 from the City in order to provide full consideration for the market value of Parcel 1 and 2. Attachment No. 1 Leaseback of Public Works Yard to the City. Parcel 1 and Parcel 2 will continue to be occupied by the National City Public Works Department, and the CDC -HA will provide a month -to -month lease agreement for $1.00 per month until the operation is relocated to allow for environmental remediation and the development of affordable housing on the site. Relocation of Public Works Yard and the Purchase of 1726 Wilson Avenue. As part of the WI-TOD DDA, National City Public Works ("PW') operations at 2100 Hoover Avenue will need to relocate to other sites in order for the Successor Agency to complete environmental remediation and develop 201 affordable housing units on Parcel 1 and Parcel 2. The City's relocation plans for PW have accommodated for a substantial part of PW operations within existing City facilities. The City still needs to secure a facility that can house the following PW functions: streets/sewer, vehicle maintenance and storage, and office space. The City reviewed options for relocation but alternatives that have been considered are not readily available or do not fully satisfy PW's operational requirements and do not fall within the timeline for implementing the WI-TOD development. The City entered into a letter of intent to purchase a 1.17 acre site which fits the needs of PW and provides 6430 sq. ft. of useable building area including office space and a repair shop with two large entry bays. The property is commonly known as 1726 Wilson Avenue in National City. The owners of the 1726 Wilson Avenue site are willing to sell their property have accepted an offer by the City to purchase the property at a negotiated price of $1,650,000. Attachment No. 2 PURCHASE AND SALE AGREEMENT (Westside TOD Affordable Site, National City, 91950) THIS PURCHASE AND SALE AGREEMENT ("Agreement") is dated as of the 20th day of August, 2013 ("Effective Date") by and between City of National City ("Seller") and the Community Development Commission -Housing Authority of the City of National City ("Purchaser"). RECITALS A. The Seller owns the fee interest in that certain parcel of real property legally described in Exhibit A attached hereto ("Parcel 1") and the fee interest in that certain parcel of real property legally described in Exhibit B attached hereto ("Parcel 2"). Parcel 1 and Parcel 2, are defined hereinbelow, collectively as the "Real Property." The Real Property is generally bounded by 19th Street, Harding Avenue, 22' Street and Hoover Avenue in National City, California. B. The successor agency to the Community Development Commission as the National City Redevelopment Agency ("Successor Agency") is subject to the enforceable obligation commonly referred to as the Westside Infill Transit Oriented Development (WI-TOD) Development and Disposition Agreement ("DDA"), entered into June 21, 2011 with Paradise Creek Housing Partners, LP. The DDA requires the Real Property to be acquired for and developed into a 201 unit affordable housing project. The Purchaser's purchase of Parcel 1 and Parcel 2 is being undertaken pursuant to the requirements of the DDA and as an enforceable obligation of the Successor Agency. The Purchaser accepted the affordable housing functions of the former redevelopment agency pursuant to resolution number 2012-01. The value of the consideration for the Real Property (i.e., the Parcel 1 Purchase Price for Parcel 1 and the Parcel 2 Purchase Price for Parcel 2), is not less than the appraised value of the Real Property. The consideration being paid for Parcel 1 is the Parcel 1 Purchase Price of Three Million Eight Hundred Fifteen Thousand and No/100 Dollars ($3,815,000.00), which equals the appraised value of Parcel 1 as determined by that certain Land Appraisal performed by Lea & Company effective as of June 27, 2013, but dated June 30, 2013. The consideration being paid for Parcel 2 is the Parcel 2 Purchase Price of Three Million Two Hundred Twenty Thousand and No/100 Dollars ($3,220,000.00), which equals the appraised value of Parcel 2 as determined by that certain Land Appraisal performed by Lea & Company effective as of June 27, 2013, but dated June 30, 2013. 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. C. The Purchaser is acquiring Parcel 1 in part utilizing United States Department of Housing and Urban Development HOME funds. After Closing, the Seller will temporarily lease the Property back from the Purchaser on a month -to -month basis for a total consideration of $1.00 per month. After the Seller vacates the Property, the Purchaser shall cause Parcel 1 to be developed as the "Phase 1 Project," as defined in the DDA, which shall be an affordable rental housing project for persons and families of very low and low income. Construction and operation of the Phase 1 Project shall be governed by all applicable United States Department of 1 Attachment No. 2 Housing and Urban Development regulations whether or not specifically referenced in this Agreement. Failure of the Purchaser to cause Parcel 1 to be developed as an affordable rental housing project for persons and families of very low and low income shall be a default hereunder. This obligation shall not be merged into the Grant Deed and shall survive the Closing. 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, Sale and Leaseback. In consideration of the mutual 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, Leaseback. The Seller shall deliver possession of the Property to Purchaser at Closing, subject only to the Title Exceptions, all as defined hereinbelow. Notwithstanding the foregoing, after Closing the Purchaser will allow the Seller to lease the Property from the Purchaser on a month -to -month basis for a total consideration of $1.00 per month, as set forth in the Lease. 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. "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 2 Attachment No. 2 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 28, 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 July 15, 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. "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 the form attached hereto as Exhibit B. "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 3 Attachment No. 2 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 25122.7 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. (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 4 Attachment No. 2 Atomic Energy Act, 42 U.S.C. §§2011 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 seq. (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. "Lease" means a lease in the form attached hereto as Exhibit C. "Parcel 1" means that certain parcel of real property legally described in Exhibit A attached hereto. "Parcel 1 Purchase Price" means the purchase price to be paid by the Purchaser for Parcel 1, which shall be Three Million Eight Hundred Fifteen Thousand and No/100 Dollars ($3,815,000.00), which amount equals the appraised value of Parcel 1 as determined by that certain Land Appraisal performed by Lea & Company effective as of June 27, 2013, but dated June 30, 2013. A portion of the Parcel 1 Purchase Price only, is being paid by the Purchaser utilizing Two Million Ninety -Four Thousand and No/100 Dollars ($2,094,000.00) of United States Department of Housing and Urban Development HOME funds. None of the United States Department of Housing and Urban Development HOME funds are being used to acquire Parcel 2. After the Seller vacates the Property, the Purchaser shall cause Parcel 1 to be developed as the 5 Attachment No. 2 "Phase 1 Project," as defined in the DDA, which shall be an affordable rental housing project for persons and families of very low and low income. Construction and operation of the Phase 1 Project shall be governed by all applicable United States Department of Housing and Urban Development regulations whether or not specifically referenced in this Agreement. The Purchaser shall cause Parcel 1 to be restricted in accordance with the United States Department of Housing and Urban Development HOME regulations (24 CFR Part 92). "Parcel 2" means that certain parcel of real property legally described in Exhibit B attached hereto. "Parcel 2 Purchase Price" means the purchase price to be paid by the Purchaser for Parcel 2, which shall be Three Million Two Hundred Twenty Thousand and No/100 Dollars ($3,220,000.00), which amount equals the appraised value of Parcel 2 as determined by that certain Land Appraisal performed by Lea & Company effective as of June 27, 2013, but dated June 30, 2013. "Permitted Exceptions" means collectively, the (i) the printed exceptions and exclusions in the Title Policy; (ii) the exceptions shown as items A-E and 1-9 on that certain Preliminary Report dated as of June 12, 2013, issued by Stewart Title of California, Inc., Order No. 01180- 50484; (iii) real property taxes and assessments which are a lien but not yet payable; and (iv) all applicable building, zoning and use restrictions and/or regulations of any municipality, township, county or state. "Property" means collectively, the Real Property and the Improvements. "Purchase Price" means collectively, the Parcel 1 Purchase Price and the Parcel 2 Purchase Price, which total Seven Million Thirty -Five Thousand and No/100 Dollars ($7,035,000.00). "Purchaser" means the Community Development Commission -Housing Authority of the City of National City; provided, however, if the Community Development Commission -Housing Authority of 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" means collectively, Parcel 1 and Parcel 2. "Seller" means the City of National City. "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. Purchaser shall pay the cost of the CLTA Owner's Policy of Title Insurance and any endorsements it desires. 6 Attachment No. 2 3. Purchase Price. (a) Purchase Price. The Seven Million Thirty -Five Thousand and No/100 Dollars ($7,035,000.00) Purchase Price shall be paid as follows: (1) Two Million Ninety -Four Thousand and No/100 Dollars ($2,094,000.00) of United States Department of Housing and Urban Development HOME funds shall be payable at Closing, all of which is being paid by the Purchaser to acquire Parcel 1 only; and (2) The Four Million Nine Hundred Forty -One Thousand and No/100 Dollars ($4,941,000.00) balance of the Purchase Price shall be paid by the Purchaser to the Seller with interest at the rate of zero percent (0.00%) in annual installments equal to the annual amount the Purchaser receives from any ground leases Parcel 1 and Parcel 2 and from the residual receipts loans that the Purchaser is making to the affordable housing developers that will construct affordable housing projects on each of Parcel 1 and Parcel 2. At Closing, the Purchaser shall execute a promissory note in favor of Seller in a form acceptable to the Seller and Purchaser. (b) Deposit Liquidated Damages. (1) Deposit. Purchaser shall make a deposit ("Deposit") into Escrow of Immediately Available Funds in the amount of One Thousand and No/100 Dollars ($1,000.00) 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 Closing, then the Deposit shall be immediately returned 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 7 Attachment No. 2 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. 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 $2,094,000.00 ($2,093,000.00 minus the Deposit). (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. The Purchaser has completed its due diligence with respect to the Property. 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 8 Attachment No. 2 on such tenth (10t1) 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 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 in the amount 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. (f) This Agreement has been formally approved by resolution of the City of National City. 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 9 Attachment No. 2 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 (10th) 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 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, except for the lease of the property from the Purchaser back to the Seller, as described in Section 1(b), above. 10 Attachment No. 2 (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 Community Development Commission -Housing Authority 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. (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, a.s 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 11 Attachment No. 2 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, except for the Seller's right to lease the Property from the Seller as described in Section 1(b), above. (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. (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 12 Attachment No. 2 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 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 Seller'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 13 Attachment No. 2 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 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 OTHER 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 14 Attachment No. 2 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 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 PURCHASER'S INITIALS (i) Indemnity and Release. (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 15 Attachment No. 2 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)(1), 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 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 16 Attachment No. 2 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 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 17 Attachment No. 2 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 Commission. The Purchaser and Seller each hereby represents and warrants to the other that it has not engaged the services of any real estate agent or broker with respect to the transaction that is the subject of this Agreement. 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. The provisions of this Section 9 shall survive the Closing or termination of this Agreement. 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: 18 If to Purchaser: If to Seller: Copy to: Attachment No. 2 Community Development Commission -Housing Authority of the City of National City Attn: Alfredo Ybarra 1243 National City Boulevard National City, CA 91950 Facsimile No. (619) 336-4286 Email: alfredoy@nationalcityca.gov 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. 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 19 Attachment No. 2 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. (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. (f) 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. 20 Attachment No. 2 (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 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 21 Attachment No. 2 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) 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. (r) Capacity and Authority. All individuals signing this Agreement for a party which is a corporation, limited liability company, partnership or other legal 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. PURCHASER: Community Development Commission -Housing Authority of the City of National City By: Leslie Deese, Executive Director Approved as to Form: By: Claudia Gacitua Silva General Counsel [SIGNATURES CONTINUED ON FOLLOWING PAGE] 22 SELLER: City of National City By: Ron Morrison, Chairman Approved as to Form: By: Claudia Gacitua Silva City Attorney 23 Attachment No. 2 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: Lots 1 to 22 inclusive of Block 107; and Lots 1 to 22 inclusive of Block 108 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; Together with that portion of Coolidge Avenue between 20th Street and 22nd Street, and 21St Street between Harding Avenue and Hoover Avenue as set forth in that certain Order of Vacation (Resolution No. 8338 of the City Council of the City of National City) recorded April 8, 1963 as file no. 59590 of Official Records; And those portions of the Unnamed Alley lying within Blocks 107 and 108 of said map no. 348 as set forth in the certain Order of Vacation (Resolution No. 9816 of the City Council of the City of National City) recorded May 12, 1969 as file no. 82961 of Official Records Parcel 2: Lots 7 to 16 inclusive of Block 85 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 therefrom that portion of land as set forth in that certain Corporation Grant Deed recorded November 20, 1964 as file no. 211364 of Official Records. In addition, that portion of Coolidge Avenue between 20th Street and 22 Street, and 21 st Street between Harding Avenue and Hoover Avenue as set forth in that certain Order of Vacation (Resolution No. 8338 of the City Council of the City of National City) recorded April 8, 1963 as file no. 59590 of Official Records; And those portions of the Unnamed Alley lying within Block 85 of said map no. 348 as set forth in the certain Order of Vacation (Resolution No. 9816 of the City Council of the City of National City) recorded May 12, 1969 as file no. 82961 of Official Records. Parcel 3: Lots 1 to 22 inclusive of Block 86 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. In addition, that portion of Coolidge Avenue between 20th Street and 22nd Street, and 21 st Street between Harding Avenue and Hoover Avenue as set forth in that certain Order of 24 Attachment No. 2 Vacation (Resolution No. 8338 of the City Council of the City of National City) recorded April 8, 1963 as file no. 59590 of Official Records; And the Unnamed Alley lying within Block 86 of said map no. 348 as set forth in the certain Order of Vacation (Resolution No. 9816 of the City Council of the City of National City) recorded May 12, 1969 as file no. 82961 of Official Records APN: 559-124-05-00, 560-391-08-00, and 560-396-06-00 25 Attachment No. 2 Exhibit "B" GRANT DEED 26 Attachment No. 2 Exhibit "C" LEASE 27 Attachment No. 3 PROMISSORY NOTE (Westside TOD Affordable Site) ("Note") National City, California August , 2013 1. Principal; No Interest. For value received and in consideration of the Purchase and Sale Agreement (Westside TOD Affordable Site) dated as of August 20, 2013 ("Agreement"), by and between the City of National City ("Seller") and Community Development Commission -Housing Authority of the City of National City ("Maker"), Maker promises to pay to Seller, or order, at 1243 National City Boulevard, National City, California 91950-4397, or such other place as the holder may from time to time designate by written notice to Maker, the principal sum of Four Million Nine Hundred Forty -One Thousand and No/100 Dollars ($4,941,000.00). This Note shall not bear interest. All capitalized terms which are not defined herein shall have the meaning ascribed to them in the Agreement. 2. Term of Loan, Due Date and Right of Prepayment. Payments shall be due and payable as follows: (a) The Maker intends to ground lease Parcel 1 and Parcel 2, as such terms are defined in the Agreement, and make one or more residual receipts loans to the developers of Parcel 1 and Parcel 2. Those ground leases may or may not require annual ground rent payments to be made to the Maker. Those residual receipts loans will require the developers of Parcel 1 and Parcel 2 to make annual payments to the Maker based on the residual receipts generated by the operations on Parcel 1 and Parcel 2, if any. The Maker shall pay to the Seller an amount equal to the amount received from the developers of Parcel 1 and Parcel 2 (whether from ground rent or residual receipts payments) within ten (10) business days of Maker's receipt of the same. The Maker shall have no obligation to make any payments to Seller hereunder, unless and until the Maker receives funds from the developers of Parcel 1 and Parcel 2. (b) If all amounts otherwise payable hereunder are not paid in full within sixty-five (65) years from the date first set forth above, all principal shall be due and payable. (c) This Note shall be payable in full upon acceleration of this Note pursuant to the provisions of Paragraph 4 of this Note. (d) This Note shall be payable in full upon the conveyance of all or any part of the fee interest in Parcel 1 or Parcel 2. (e) This Note may be prepaid in whole or in part at any time and, from time to time, without notice or penalty. Any prepayment shall be allocated first to unpaid interest, if any, and then to principal. 3. Unsecured Note. This Note shall be unsecured. 1 Attachment No. 3 4. Acceleration Upon Default. Notwithstanding Section 2, above, or anything contained herein to the contrary, in the event of: (i) any default in the performance of any of the terms, covenants and conditions contained in this Note or the Agreement, in each case after the expiration of applicable cure periods, or (ii) in the event of the filing of a bankruptcy proceeding by or against Maker which is not dismissed within ninety (90) days thereafter, then all sums owing by Maker to the Seller shall at the option of the Seller immediately become due and payable. These remedies shall be in addition to any and all other rights and remedies available to the Seller, either at law or in equity. 5. Costs Paid by Maker. Maker agrees to pay the following costs and expenses incurred by the holder of this Note, or adjudged by a court: (a) reasonable costs, expenses and attorneys' fees paid or incurred in connection with the collection or enforcement of this Note, whether or not suit is filed; and (b) costs of suit and such sum as the court may adjudge as attorneys' fees in any action to enforce payment of this Note or any part of it. 6. Payment and Interest Calculation. Payments shall be applied to interest first, if any, and then to any unpaid principal balance. 7. Recourse Note. In any action brought to enforce the obligations of Maker under this Note, the judgment or decree shall be enforceable against Maker. 8. Late Charge. if any installment due hereunder is not paid within fifteen (15) days from the date due, Maker promises to pay a "late charge" of $100.00 to defray the expense incident to handling any such delinquent payment or payments. 9. Severability. If any provision of this Note is determined to be void by court of competent jurisdiction, such determination shall not affect any other provisions of this Note, and such other provisions shall remain in full force and effect. 10. Non -Waiver. No delay in demanding or failure to demand performance hereunder shall constitute a waiver by the holder of its right to subsequently demand such performance or to exercise any remedies for any default hereunder. Further, in order to be effective, any waiver of any of the Seller's rights and remedies hereunder must be in a writing signed by the Seller. Further waiver by the Seller of any right hereunder shall not constitute a waiver of any other right, including but not limited to the right to exercise any and all remedies for a different or subsequent event of default. Maker: Community Development Commission -Housing Authority of the City of National City By: Print Name: Its: 2 Attachment No. 3 Recording Requested By And When Recorded Mail To And Mail Tax Statements To: City of National City 1243 National City Boulevard National City, CA 91950 This document is exempt from payment of a recording fee pursuant to Government Code Section 6103. GRANT DEED FOR VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, City of National City hereby grant to Community Development Commission -Housing Authority of the City of National City the real property in the County of San Diego, State of California, described on Exhibit "A" attached hereto and incorporated herein. This grant deed is recorded to pursuant to the authority granted by the City of National City, as referenced within City of National City board report , and City of National City Resolution No. , adopted on August 20, 2013. City of National City By: Dated: August , 2013 Ron Morrison, Mayor Approved as to Form: By: Claudia Gacitua Silva City Attorney 1 ACKNOWLEDGMENT State of California County of San Diego Attachment No. 3 On , 2013, before me, , notary public, personally appeared , who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person, or the entity on behalf of which the person acted, executed the instrument. I certify under penalty of perjury under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) 2 Attachment No. 3 ACCEPTANCE This is to certify that the interest(s) in real property conveyed by this instrument to the Community Development Commission -Housing Authority of the City of National City are hereby accepted by the undersigned officer on behalf of the Community Development Commission -Housing Authority of the City of National City, pursuant to the authority conferred by City of National City Resolution No. on August 20, 2013, and the grantee consents to recordation thereof by its duly authorized officer. Community Development Commission -Housing Authority of the City of National City By: Dated: August , 2013 Leslie Deese, Executive Director Approved as to Form: By: Claudia Gacitua Silva General Counsel ACKNOWLEDGMENT State of California County of San Diego On , 2013, before me, , notary public, personally appeared , who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person, or the entity on behalf of which the person acted, executed the instrument. I certify under penalty of perjury under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) 3 Attachment No. 3 EXHIBIT "A" The land referred to herein is situated in the State of California, County of San Diego, City of National City and described as follows: PARCEL 1: THAT CERTAIN PARCEL OF LAND SITUATE 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 1 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: LOTS 13, 14, 15, 16 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 OF 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. 4 Attachment No. 3 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 1N 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 5 Attachment No. 4 MONTH -TO -MONTH LEASE (Public Works Yard-Westside TOD Affordable Site, National City, 91950) THIS MONTH -TO -MONTH LEASE ("Lease") is dated as of the 30th day of August, 2013, by and between the Community Development Commission -Housing Authority of the City of National City ("Landlord''), and the City of National City ("Tenant"). 1. Definitions. "Commencement Date" means August 30, 2013. "Landlord" means the Community Development Commission -Housing City of National City. "Premises" means the approximately 6.29 acres of real property in the City, bounded by 19'h Street, Harding Avenue, 22nd Street and Hoover Avenue. "Rent Commencement Date" means August 30, 2013. "Tenant" means the City of National City. "Term" shall have that meaning ascribed to it in Section 3 of this Lease. Authority of the City of National 2. Lease of the Premises: "As -Is" Condition. Landlord leases to Tenant and Tenant leases from Landlord the Premises on a triple net basis. Tenant hereby agrees and acknowledges that Tenant is leasing the Premises "As -Is" from Landlord, without relying on any communications not set forth herein that may have been made by Landlord, or any of Landlord's agents or employees, with respect to the Premises or Tenant's intended use thereof. Without limiting the generality of the foregoing, Tenant shall be solely responsible for detennining the condition of the Premises. Landlord shall have no obligation to improve the Premises. 3. Month -to -Month Lease. This Lease shall commence on the Commencement Date and shall continue on a month -to -month basis and shall terminate on the earlier of (i) thirty (30) days written notice from Landlord to Tenant; (ii) thirty (30) days written notice from Tenant to Landlord; or (iii) a date mutually agreed upon by Landlord and Tenant ("Term"). 4. Rent. (a) Monthly Rent. Tenant agrees to pay Landlord rent in the amount of $1.00 per month each and every month during the Term commencing upon the Rent Commencement Date. (b) Utilities; Maintenance Costs. This Lease is a triple net lease. Tenant shall be responsible for the payment of all utilities, taxes, assessments, maintenance costs, trash collection and all other costs of any kind whatsoever with respect to, arising out of or otherwise associated with the Premises. Attachment No. 4 5. Alterations. Neither the Landlord, nor Tenant shall make alterations or other changes to the Premises. 6. Use. (a) Continued Use. The Landlord purchased the Premises from the Tenant. The Tenant may continue to use the Premises in the manner used by the Tenant immediately prior to the sale of the Premises to the Landlord. Tenant shall keep the Premises in a neat, clean and orderly condition at all times during the Term, and shall not permit rubbish, waste or garbage, to accumulate at any time. Tenant shall not commit or permit any waste of the Premises or any acts to be done in violation of any laws or ordinances. Tenant shall not use or permit the use of the Premises for any illegal purposes. (b) Inspection of Premises. Landlord shall have the right to enter upon the Premises at all reasonable times without abatement of rent. Tenant hereby waives any claim for damages for any injury or inconvenience to or interference with Tenant's business, any loss of occupancy or quiet enjoyment of the Premises, and any other loss occasioned thereby. Any entry to the Premises or portions thereof by Landlord shall not under any circumstances be construed or deemed to be a forcible or unlawful entry into, or a detainer of, the Premises, or an eviction, actual or constructive, of Tenant from the Premises, or any portion thereof. Any such entries upon the Premises by the Landlord shall be performed with as little disturbance and inconvenience to Tenant as reasonably possible. 7. Waiver of Subrogation. If either party sustains loss or damage to the Premises or the fixtures, goods, wares, merchandise or any other property located thereon, from which it is protected by an insurance policy, then, to the extent that such party is so protected, it waives any right of recovery from the other party. 8. Assignment and Sublease. Tenant shall not directly or indirectly, voluntarily or by operation of law, sublease, sell, assign, encumber, pledge or otherwise transfer or hypothecate all or any part of the Premises or this Lease, without the written consent of Landlord, which may be withheld by Landlord in its sole and absolute discretion. 9. Attorneys' Fees. If any action shall be instituted by either Landlord or Tenant for the enforcement or interpretation of any of its rights or remedies in or under this Lease, the prevailing party shall be entitled to recover from the losing party all costs incurred by the prevailing party in said action and any appeal therefrom, including reasonable attorneys' fees and court costs to be fixed by the court therein. 10. Default. (a) Tenant's Default. The occurrence of any one or more of the following shall constitute a default hereunder by Tenant: (1) Tenant abandons the Premises or vacates the Premises for a period of ten (10) or more consecutive days; Attachment No. 4 (2) Tenant fails to pay any rent or other charges required to be paid by Tenant under this Lease and such failure continues for five (5) days after it is due; (3) Tenant fails to promptly and fully perform any other covenant, condition or agreement contained in this Lease and such failure continues for ten (10) days (or such shorter time provided herein) after written notice thereof from Landlord. Such ten (10) day notice shall be in lieu of and not in addition to any notice required under California Code of Civil Procedure Section 1161; (4) A trustee, disbursing agent or receiver is appointed to take possession of all or substantially all of Tenant's assets or of Tenant's interest in this Lease and Tenant does not regain possession within ten (10) days after such appointment; Tenant makes an assignment for the benefit of creditors; or all or substantially all of Tenant's assets in, on or about the Premises or Tenant's interest in this Lease are attached or levied upon under execution (and Tenant does not discharge the same within ten (10) days thereafter); (5) A petition in bankruptcy, insolvency or for reorganization or arrangement is filed by or against Tenant pursuant to any federal or state statute and, with respect to any such petition filed against it, Tenant fails to secure a stay or discharge thereof within ten (10) days after the filing of the same; (6) hmmediately, in the event of any assignment, subletting or other transfer for which the prior written consent of the Landlord has not been obtained; (7) hnmediately, in the event Tenant admits in writing its inability to pay its debts as they mature; or (8) Immediately, upon the suspension of Tenant's right to conduct its business, caused by the order, judgment, decree, decision or other act of any court or governmental agency. (b) Landlord's Remedies. Upon the occurrence of a default by Tenant that is not cured by Tenant within any applicable grace period, Landlord shall have the following rights and remedies in addition to all other rights and remedies available to Landlord at law or in equity: (1) The right to terminate this Lease by giving notice to Tenant in accordance with applicable law; (2) The right and power to enter the Premises and remove therefrom all persons and property, to store such property in a public warehouse or elsewhere at the cost of and for the account of Tenant. Before retaking of any such property from storage, Tenant shall pay to Landlord, upon demand, all expenses incurred in such removal and all storage charges against such property. Any such property of Tenant not so retaken from storage by Tenant within thirty (30) days after such property is removed from the Premises shall be deemed abandoned and may be either disposed of by Landlord pursuant to Section 1988 of the California Civil Code or retained by Landlord as its own property; Attachment No. 4 (3) The right to have a receiver appointed for Tenant, upon application by Landlord, to take possession of the Premises and to apply any rental collected from the Premises and to exercise all other rights and remedies granted to Landlord for Tenant pursuant to this Section 10; and (4) The rights and remedies provided by California Civil Code Section 1951.2 to recover from Tenant upon termination of this Lease; 11. Quiet Enjoyment. Upon payment by Tenant of the rents herein provided, and upon the observance and performance of all the covenants, terms and conditions on Tenant's part to be observed and performed, Tenant shall peaceably and quietly hold and enjoy the Premises for the term hereby demised without hindrance or interruption by Landlord or any other person or persons lawfully or equitably claiming by, through or under Landlord, subject, nevertheless, to the terms and conditions of this Lease. 12. Notices. Any notices required or permitted hereunder shall be in writing and delivered in person to the other party or by a nationally recognized overnight courier such as FedEx, or United States Certified Mail, Return Receipt Requested, postage fully prepaid, to the addresses set forth below or to such other address as either party may designate in writing and deliver as provided in this Section. Landlord: Tenant: Community Development Commission -Housing Authority of the City of National City Attn: Alfredo Ybarra 1243 National City Boulevard National City, CA 91950 Facsimile No. (619) 336-4286 Email: alfredoy@nationalcityca.gov City of National City Attn: Brad Raulston 1243 National City Boulevard National City, CA 91950 Facsimile No. (619) 336-4286 Email: braulston(anationalcityca.gov 13. Brokers. Landlord and Tenant covenant, warrant and represent that no broker has been involved in the negotiation or consummation of this Lease. Tenant and Landlord each agree to indemnify, defend (with an attorney of the indemnitee's choice) and hold the other harmless from and against all claims, demands, causes of action and liabilities, including (without limitation) attorneys' fees and costs, arising out of a claim for a commission by any broker purporting to have acted on behalf of the indemnifying party. 14. Force Majeure. Neither party shall be required to perform any term, covenant or condition of this Lease so long as such performance is delayed or prevented by force majeure, which shall Attachment No. 4 mean any acts of God, material restriction by any governmental authority, civil riot, and any other cause not reasonably within the control of such party and which by the exercise of due diligence such party is unable, wholly or in part, to prevent or overcome. 15. General Conditions. (a) Counterparts. This Lease 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. (b) Captions. The captions in this Lease are inserted for convenience of reference and in no way define, describe or limit the scope or intent of this Lease or any of the provisions of this Lease. (c) Partial Invalidity. Any provision of this Lease which is unenforceable, invalid, or the inclusion of which would adversely affect the validity, legality, or enforcement of this Lease shall have no effect, but all the remaining provisions of this Lease shall remain in full effect. (d) No Third -Party Rights. Nothing in this Lease, express or implied, is intended to confer upon any person, other than the parties to this Lease and their respective successors and assigns, any rights or remedies. (e) Time Of Essence. Time is of the essence in this Lease. (f) Relationship. Nothing contained in this Lease shall be deemed or construed by the parties or by any third person to create a relationship of principal and agent or partnership or a joint venture between Landlord and Tenant or between either or both of them and any third party. (g) Approval. Where this Lease refers to an action or approval of the Landlord, it shall mean the approval of the Executive Director of the Community Development Commission - Housing Authority of the City of National City, or designee, unless otherwise provided. Where this Lease refers to an action or approval of the Tenant, it shall mean the approval of the City Manager of the City of National City, or designee, unless otherwise provided. (h) Further Assurances. Landlord and Tenant agree to execute all such instruments and documents and to take all actions which are reasonably necessary to carry out this Lease or accomplish its intent. (i) Incorporation of Prior Agreements. This Lease contains all agreements of Landlord and Tenant with respect to any matter mentioned, or dealt with, herein. No prior agreement or understanding pertaining to any such matter shall be binding upon Landlord or Tenant. (j) Amendment. This Lease may only be amended by written agreement signed by Landlord and by Tenant. Attachment No. 4 (k) No Waiver. No waiver by either party of any provision hereof shall be deemed a waiver of any other provision hereof or of any subsequent breach of the same or any other provision. Landlord's consent to or approval of any act shall not be deemed to render unnecessary obtaining such Landlord's consent to or approval of any subsequent act. No waiver by either party shall be effective unless it is in writing, executed on behalf of such party. (1) Consents. All consents to be given by either party shall be reasonably and timely given. (m) No Leasehold Mortgages. Tenant shall not encumber its leasehold interest in the Premises, without the prior written approval of the Landlord. (n) Nondiscrimination. There shall be no discrimination against or segregation of any person or group of persons, on account of race, color, creed, religion, sex, sexual orientation, marital status, national origin or ancestry in the leasing, subleasing, renting, transferring, use, occupancy, tenure or enjoyment of the Premises, nor shall Tenant itself, or any person claiming under or through it, establish or permit such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sublessees, subtenants or vendees in the Premises. (o) Signature Authority. All individuals signing this Lease for a party which is a corporation, limited liability company, partnership or other legal entity, or signing under a power of attorney, or as a trustee, guardian, conservator, or in any other legal capacity, covenant to the each other party hereto 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 Lease. TENANT: City of National City By: Ron Morrison. Mayor Approved as to Form: By: Claudia Gacitua Silva City Attorney LANDLORD: Community Development Commission -Housing Authority of the City of National City Attachment No. 4 By: Leslie Deese, Executive Director Approved as to Form: By: Claudia Gacitua Silva General Counsel RESOLUTION NO. 2013 - RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NATIONAL CITY AUTHORIZING THE MAYOR TO EXECUTE A PURCHASE AND SALE AGREEMENT WITH THE COMMUNITY DEVELOPMENT COMMISSION - HOUSING AUTHORITY OF THE CITY OF NATIONAL CITY ("CDC -HA") FOR THE SALE OF TWO PARCELS OF LAND TOTALING 6.299 ACRES FOR A TOTAL PURCHASE PRICE OF $7,035,000, GENERALLY BOUNDED BY 19TH STREET, HARDING AVENUE, 22ND STREET, AND HOOVER AVENUE, IN THE CITY OF NATIONAL CITY, FOR THE DEVELOPMENT OF 201 AFFORDABLE HOUSING UNITS AS PHASE I AND II OF THE WESTSIDE INFILL TRANSIT ORIENTED DEVELOPMENT PROJECT, APPROVING A LOAN FROM THE CITY OF NATIONAL CITY TO THE CDC -HA FOR $4,941,000 TO COMPLETE SAID PURCHASE, AND APPROVING THE MONTH TO MONTH LEASE BACK OF THE SUBJECT PROPERTY FROM THE CDC -HA WHEREAS, the City is the owner of that certain real property (the "Property") in the City of National City, State of California, consisting of two legal parcels ("Parcel 1 and Parcel 2") totaling 6.299 acres, generally bounded by 19th Street, Harding Avenue, 22nd Street, and Hoover Avenue; and WHEREAS, the Successor Agency to the Community Development Commission as the National City Redevelopment Agency (Successor Agency) is subject to the enforceable obligation commonly referred to as the Westside Infill Transit Oriented Development (WI-TOD) Development and Disposition Agreement (DDA), entered into June 21, 2011 with Paradise Creek Housing Partners, LP (Developer); and WHEREAS, the DDA requires the Property to be acquired for and developed into a 201 unit affordable housing project (the Project) as described in the DDA; and WHEREAS, the sale of Parcel 1 and Parcel 2 to the CDC -HA is being undertaken so that the Successor Agency can fulfill its enforceable obligations pursuant to the requirements of the DDA; and WHEREAS, in accordance with California Health and Safety Code section 34176, the CDC -HA has accepted the affordable housing functions of the former redevelopment agency pursuant to resolution number 2012-01; and WHEREAS, the value of the consideration for the Property, pursuant to proposed Purchase and Sale Agreement (Agreement) will not be less than the appraised value; and WHEREAS, appraisals completed within the last 60 days indicate a value of $3.815 million for Parcel I and $3.22 million for Parcel 2 for a total value of the Property of $7.035 million; and WHEREAS, the CDC -HA will use $2,094,000 in HOME funds to acquire Parcel I and the CDC -HA has requested a loan in the amount of $4,941,000 from the City in order to provide full consideration for the remaining balance of the appraised value of Parcel 1 in the amount of $3,815,000 and the full appraised value of Parcel 2 in the amount of $3,220,000; and WHEREAS, the CDC -HA would repay the loan with ground lease income and loan repayments made by the developer of the Project; and WHEREAS, the Property will continue to be temporarily occupied by the National City Public Works Department, and the CDC -HA will provide a month -to -month lease agreement for $1.00 per month until the operation is relocated to another site; and Resolution No. 2013 — Page Two WHEREAS, the sale of the Property pursuant to the proposed Agreement will improve the quality of life of the residents of National City and its visitors through the elimination of blight and the development of a quality Project in the area by providing for the reuse and redevelopment of a brownfield site; and WHEREAS, all actions required by all applicable law with respect to the proposed Agreement have been taken in an appropriate and timely manner; and WHEREAS, the City Council has duly considered all terms and conditions of the proposed Agreement and believes that the disposition of the Property pursuant thereto, loan, and month to month lease, are in the best interests of the City of National City and the health, safety, and welfare of its residents, and in accord with the public purposes and provisions of applicable state and local law requirements. NOW, THEREFORE, BE IT RESOLVED that the City Council authorizes the Mayor to execute the Purchase and Sale Agreement between the City of National City and the Community Development Commission -Housing Authority for the sale of 6.299 acres of land for a total purchase price of $7,035,000. Said Purchase and Sale Agreement is on file in the Office of the City Clerk. BE IT FURHTER RESOLVED that the City Council accepts the partial payment of the purchase price by the CDC -HA from the use of HOME Grant funds in the amount of $2, 094, 000. BE IT FURTHER RESOLVED that the City Council authorizes the City Manager or her designee to execute any and all loan documents necessary to make the unsecured loan of $4,941,000 provided by the City to the CDC -HA for consideration of value owed on the purchase price, and as necessary to fulfill the terms the Purchase and Sale Agreement, including escrow documents. Said loan documents are on file in the Office of the City Clerk. BE IT FURTHER RESOLVED that the City Council authorizes the Mayor to execute a Month -to -Month Lease Agreement for the Property until City Public Works operations are relocated to another site. Said Lease Agreement is on file in the Office of the City Clerk. BE IT FURTHER RESOLVED that the City Council determines that the WI-TOD project was previously addressed in the Final Environmental Impact Report for the Westside Specific Plan (State Clearinghouse No. 2008071092) which was certified by the City Council on March 16, 2010, thus satisfying CEQA. PASSED and ADOPTED this 20th day of August, 2013. Ron Morrison, Mayor ATTEST: APPROVED AS TO FORM: Michael R. Della, City Clerk Claudia Gacitua Silva City Attorney