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Agreement with Illumination Foundation for a Permanent Emergency Homeless Shelter June 16, 2020 Page 4 term of 10 years. This will provide the City with regular opportunities to change operators if necessary. The Guaranty of Lease details the terms and conditions of how the City will guarantee the prompt payment for the lease until the lease expires or is terminated. The Guarantee of Lease may be terminated by the Guarantor upon sixty days written notice of termination to Lessor if any of the following shall occur: a) Lease expires or is terminated for any reason or no reason whatsoever; b) The Close of Purchase Option Escrow as defined in the Lease Addendum; c) The subject property for any reason ceases to be used as a Year -Round Homeless Navigation Center and Recuperative Care Facility; or, d) Any of City's funding sources for homeless services are reduced by 25% or more In order to allow the City to move forward with another operator under the lease, language has been added that Illumination Foundation shall assign the lease as directed by the City. Purchase Option As a means of securing our long-term investment in providing housing, the Agreement allows the City to purchase the property if the City determines that services may continue for a period longer than 10 years, or if the City is allocated a new source of revenue for homeless services. The current building purchase price of $9,200,000 reflects the value of the building including a $1,000,000 premium for the existing Regulatory Safety Permit (RSP) that will be relocated to another site. Upon the relocation and site control of the RSP holder, the value of the property decreases to $8,200,000. The City's purchase option calculation will be based on the $8,200,000 value. If the RSP is properly relocated, the City's purchase option for the property will calculated at a price of $8,200,000 plus an amount equal to 50% of the increase in the Consumer Price Index for all Urban Consumers for the Los Angeles -Anaheim -Riverside area from May 2020 ("Base Index") to the date of the Notice of Exercise. ). During the initial term of the Purchase Option Period, beginning the 13th month, and continuing through the 5th anniversary of the Lease effective date, the Purchase Price shall also include any costs incurred by the Lessor in purchasing the Property, up to one hundred and fifty thousand dollars ($150,000.00). The decision for the City to purchase will also provide at least 90-120 days for Lessor to locate an exchange property prior to the Closing of the Purchase Option Escrow. Illumination Foundation's Track Record Illumination Foundation has a proven record of accomplishments in every aspect of planning and operationalizing emergency shelters/navigation centers, including rehabilitating and revitalizing property, quickly achieving full capacity and providing intensive client services. Illumination Foundation renovated, opened and currently operates the La Mesa 101-bed shelter and navigation center facility in the City of Anaheim. They were also recently awarded to provide services for the 150-bed navigation and recuperative care facility in the City of Fullerton. Their shelter management experience also includes oversight of 250 permanent housing beds spread out among 198 scattered site apartment and 21 micro communities. Illumination Foundation has toured dozens of L.