CITY COUNCIL REGULAR MEETING AGENDA PACKET

4. Loan Proceeds. The Assignor and the City each hereby acknowledge and agree that prior to the Effective Date, the City has disbursed all sums that City was obligated to provide pursuant to the loans identified in Recitals D and E above. 5. City Consent to Transfer of Project and Ground Lease; Grant of Option to Extend Ground Lease Term. Subject to Section 3, the City consents to the assignment of the Ground Lease and the conveyance of the Project to Assignee. Contingent upon Assignee’s receipt of an allocation of low-income housing tax credits to finance the rehabilitation of the Project, City hereby grants Assignee an option to extend the term of the Ground Lease to April 1, 2095, so that the term of the Ground Lease shall be 99 years from the original commencement date of the Ground Lease (the “Option”). The Option shall be exercisable upon the close of escrow for construction financing and the syndication of the Project. If Assignee exercises this option, the City and Assignee will execute an amendment to the Ground Lease reflecting the new expiration date. 6. Payment of City Costs. Pursuant to invoices to be submitted to escrow, at close of escrow for conveyance of the Project and Assignor’s leasehold interest in the Property to Assignee, Assignee shall pay City’s legal fees incurred in connection with the transactions contemplated by this Agreement. 7. Subordination. The Parties agree that any “seller” or “sponsor” loans provided to the Project by Assignor or Assignee, or affiliated entities of Assignee or Assignor, shall be payable only from Assignee’s share of Project surplus cash, or Assignee’s share of net proceeds of refinancing. 8. Assignor Representations. 8.1 Representations by Case. Case represents and warrants to City and Assignee that: (i) Case is a duly organized, limited partnership validly existing and in good standing under the laws of the State of California; (ii) Case has the power and authority to execute, deliver and perform its obligations under this Agreement; (iii) this Agreement has been executed and delivered by persons who are duly authorized to execute and deliver the same for and on behalf of Case, and all actions required under Case’s organizational documents and applicable governing law for the authorization, execution, delivery and performance of this Agreement have been duly taken; (iv) the execution, delivery and performance of this Agreement do not violate any rule, regulation, statute, law, order, decree, judgment or the like, or any agreement or instrument to which Case is a party, (v) Case is not in breach or default under the Ground Lease, the Loan Documents, or the Accrued Rent Note; (vi) Case has no defenses, setoffs, claims, counterclaims or causes of action of any kind or nature against City relative to the Ground Lease, the Loan Documents, the Accrued Rent Note, or this Agreement; (vii) Case has not received any notice from any governmental agency relating to any alleged violation of law, ordinance, rule or regulation pertaining to the Property or the Project; (viii) Case has not filed, and currently has no intention to file, for any bankruptcy or debtor relief, and Case is not insolvent, (ix) Case has received consent to the transfer of the Ground Lease, the Project, and the assignments and assumptions contemplated by this Agreement from all other parties whose consent is required; and (x) this Agreement constitutes a legal, valid and binding obligation of Case, enforceable in accordance with its terms, subject to laws affecting creditors’ rights and principles of equity. Page 269 of 454