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7.A. - Page 181 Agreement is not jeopardized in any way; and (d) the Indemnitee's interest in the Project is not j eopardized in any way. 7.8.5 Insurance Proceeds. The Indemnitor's obligations shall be reduced by net insurance proceeds the Indemnitee actually receives for the matter giving rise to indemnification obligation. 7.9 City Option to Purchase Following Conveyance. 7.9.1 The City shall have the right at its option to terminate this Agreement and to purchase the Site ("Option to Purchase") with all improvements thereon, if after conveyance of the City Property to the Developer and prior to the date of issuance by the City of a Certificate of Completion pursuant to Section 4.13 of this Agreement, the Developer shall: (a) Subject to the provisions of Section 8.15, abandon or substantially suspend construction of the improvements for a period of three (3) consecutive months after written Notice of such abandonment or suspension from the City (the "Initial Option to Purchase Notice"); or (b) Without the prior written consent of the City, a Transfer of all or any portion of or any interest in the Site has occurred, other than a Permitted Encumbrance or a Permitted Transfer, except for any mechanic's liens, preliminary notices from contractors or other encumbrances related to the construction of the Project and such unpermitted Transfer has remained in effect and uncured for a period of three (3) consecutive months after the Initial Option to Purchase Notice from City (or, if not susceptible of cure within such three-month period, the Developer fails to commence to cure within such period and thereafter to prosecute diligently to completion). For the purpose of this paragraph, the terms "sell" and "transfer" shall include, in addition to the common and ordinary meaning of those terms and without limiting their generality, transfers made to subsidiary or affiliated entities, and any "change in ownership" as that term is used from time to time in California real property taxation law. Following the expiration of the Initial Option to Purchase Notice, and prior to City exercising the Option to Purchase, the City shall provide a second written Notice of City's intent to exercise the Option to Purchase ("Second Option to Purchase Notice") and provide Developer with a final thirty (30) day period in which to cure, or commence to cure, the default(s) set forth in subsections (a) and (b) above, as applicable. This Option to Purchase shall be subordinate and subject to and be limited by and shall not defeat, render invalid or limit: Any mortgage, deed of trust or other security instrument permitted by this Agreement; or Any rights or interests provided in this Agreement for the protection of the holder of such mortgages, deeds of trust or other security instruments. 7.9.2 Notices. The power reserved in this Section 7.9 shall be exercisable by delivering a written Initial Option to Purchase Notice and Second Option to Purchase Notice 82483.00009\7571312.11 53 ATTY/AGR/2013.118/BLOCK 2 HUNTER STORM REV: 07-19-13 PT