Reso25-02 0024 PC Reso 901 El Camino Real

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Page 25 of 39 (c) The fact that a Transfer as defined in Section 5.1 above is for practical purposes a transfer or disposition of the fee interest in the Affordable Site then owned by the Qualified Designee; (d) The fact that the Affordable Site is not to be acquired, developed or used for speculation, but only for development and operation by Qualified Designee in accordance with this Agreement and under the Affordable Housing Restrictive Covenant; (e) The reliance by the City upon the unique qualifications and ability of Qualified Designee to serve as the catalyst for development of the Affordable Site and upon the continuing interest which Qualified Designee will have in the Affordable Site to assure the quality of the use, operation and maintenance deemed critical by the City in the development of the Affordable Site; and (f) The fact that a change in ownership or control of the Developer or the Qualified Designee, or of a substantial part thereof, or any other act or transaction involving or resulting in a significant change in ownership or with respect to the identity of the parties in control of Qualified Designee or the degree thereof is for practical purposes a transfer or disposition of the Affordable Site. Section 5.3 Prohibited Transfers. (a) Developer represents and agrees that Developer has not made or created, and will not make or create or suffer to be made or created, any Transfer, either voluntarily or by operation of law without the prior written approval of the City. (b) Except as expressly permitted in this Agreement, Qualified Designee represents and agrees that Qualified Designee has not made or created, and will not make or create or suffer to be made or created, any Transfer, either voluntarily or by operation of law without the prior written approval of the City. (c) Any Transfer made in contravention of this Section 5.3 shall be void and shall be deemed to be a default under this Agreement whether or not Developer or Qualified Designee knew of or participated in such Transfer. Section 5.4 Permitted Transfers. Notwithstanding the provisions of Section 5.3, the following Transfers shall be permitted and shall be hereby approved by the City Manager: (a) The transfer of this Agreement to an Affiliate Company of the Qualified Designee, subject to written documentation of Affiliate Company’s relationship to Qualified Designee. (b) Admission of new or additional equity partners or creation of joint ventures, partnerships (including limited partnerships), or other entities by Qualified Designee consistent with the requirements of a “qualifying designee” as defined in the Affordable Housing Program Guidelines; ATTY/RESO.0024/PC RESO 901 EL CAMINO REV: 04-11-25 VR