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specified in Section 9.9 City's rights pursuant to this Section 9.8 shall not defeat, render invalid <br />or limit any mortgage or deed of trust permitted by this Agreement or any rights or interests <br />provided in this Agreement for the protection of the holders of such mortgages or deeds of trust. <br />Upon revesting in the City of title to the Property or any portion thereof as provided in <br />this Section 9.8, the City shall use its best efforts to resell the Property or applicable portion <br />thereof and as soon as possible, in a commercially reasonable manner to a qualified and <br />responsible party or parties (as determined by the City) who will assume the obligation of <br />making or completing the Project in accordance with the uses specified for such property in this <br />Agreement and in a manner satisfactory to the City. Upon such resale of the Property or any <br />portion thereof the sale proceeds shall be applied as follows: <br />(a) First, to reimburse the City for all costs and expenses incurred by City, including <br />but not limited to salaries of personnel and legal fees incurred in connection with the recapture <br />and resale of the Property; all taxes and assessments payable prior to resale, and all applicable <br />water and sewer charges; any payments necessary to discharge any encumbrances or liens on <br />the Property at the time of revesting of title thereto in the City or to discharge or prevent from <br />attaching any subsequent encumbrances or liens due to obligations, defaults, or acts of the <br />Developer, its successors or transferees; any expenditures made or obligations incurred with <br />respect to the completion of the Project or any part thereof on the Property; and any other <br />amounts owed to the City by Developer and its successors or transferee. <br />(b) Second, to reimburse the City for damages to which it is entitled under this <br />Agreement by reason of the Developer's default. <br />(c) Third, to reimburse the Developer, its successor or transferee, up to the amount <br />equal to: <br />(1) The payment made to the City for the Property; plus <br />(2) The appraised fair market value of the improvements Developer has <br />placed on the Property or applicable portion thereof (as determined by an appraiser with not less <br />than 10 years' experience in appraising retail developments in Alameda County and who is <br />mutually acceptable to City and Developer); <br />(3) Any gains or income withdrawn or made by the Developer from the <br />Property or applicable portion thereof or the improvements thereon. <br />Notwithstanding the foregoing, the amount calculated pursuant to this subsection (c) shall <br />not exceed the fair market value of the Property or applicable portion thereof, together with the <br />improvements thereon as of the date of the default or failure which gave rise to the City's <br />exercise of the right of reverter. <br />(4) Any balance remaining after such reimbursements shall be retained by the <br />City. <br />1875524.3 30 <br />