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2. Grant of Option. Agency grants to City the exclusive right and option ( "Option ") to acquire the Agency Property, or any portion of the Agency Property, at the Transfer Price and on the terms and conditions set forth in this Agreement. A Memorandum of Option in the form of Exhibit "B" hereto will be recorded concurrently with execution of this Agreement. During the Option Period, as defined in Section 3 below, Agency shall not encumber or otherwise divest its interest in the Agency Property. 3. Option Period. The Option will commence on the Effective Date and will remain in effect and continue for a period of one (1) year thereafter ( "Option Period "). City may extend the Option Period for an additional one (1) year upon written notice to Agency delivered no later than the expiration date of the initial Option Period, and payment of Ten Dollars ($10) ( "Extension Price ") to Agency. 4. Consideration. The Option is granted in consideration of City's payment to Agency of the sum of Ten Dollars ($10) ( "Option Price "), receipt of which is hereby acknowledged by Agency. 5. Retention of Option Price. If the Option is not exercised in accordance with the terms of this Agreement, then the Option Price, and if applicable the Extension Price, will be retained by Agency in consideration of the granting of this Option. 6. Method of Exercise. City may exercise this Option as to the entirety of the Agency Property or as to any individual parcel constituting the Agency Property by giving written notice to Agency ( "Exercise Notice "). The Exercise Notice shall specify the specific parcels that City desires to acquire and shall be accompanied by the sum of Ten Dollars ($10) ( "Transfer Price ") for each parcel of Agency Property to be acquired pursuant to the Exercise Notice. The foregoing shall not be construed to disallow the making of multiple Exercise Notices if City determines that it is best served by purchasing one (1) or more of the parcels constituting the Agency Property at different times during the term of the Option Period. 7. Closing. In the event City exercises the Option as provided for herein, Agency shall convey and City shall accept conveyance of fee title to the Agency Property, or such portion thereof denoted in the Exercise Notice, within ten (10) days of receipt of City's Exercise Notice. Agency shall be obligated to convey fee title to the Agency Property, or applicable portion thereof, free and clear of all liens and encumbrances, other than the lien for current non - delinquent taxes, if applicable, and such additional exceptions to title in existence on the Effective Date. To effectuate such conveyance: a. Agency shall execute, acknowledge and deliver to City a title company form grant deed, incorporating such additional covenants running with land as may be required by the CRL. b. City shall execute and acknowledge a certificate of acceptance acknowledging acceptance of the Agency Property, or applicable portion thereof, and 2 ATTY /AGR/2011.019 /REDWOOD CITY OPTION AGREEMENT BETWEEN AGENCY 030411