5.1. HRSR 12-06-2004 - Laserfiche WebLink

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ARTICLE VI ENCUMBRANCE OF THE DEVELOPMENT PROPERTY Section 6.1 Encumbrance of the Development Property. Neither the Developer nor any successor in interest to the Developer (other than purchasers of the units in the Bluff Block Housing Project) will engage in any financing or any other transaction creating any mortgage or other encumbrance or lien upon the Development Property, or portion thereof, whether by express agreement or operation of law, or suffer any encumbrance or lien to be made on or attach to the Development Property except only for the purpose of obtaining funds to the extent necessary for financing the costs of the Minimum Improvements (including, but not limited to, land and building acquisition, labor and materials, professional fees, real estate taxes, construction interest, organization and other indirect costs of development, costs of constructing the Minimum Improvements, and an allowance for contingencies). The restriction on financing and other transactions contained in this section shall terminate on the Completion Date. Section 6.2 Copy of Notice of Default to Mortgagee. If the City delivers any notice or demand to the Developer with respect to any Event of Default under this Agreement, the City will also deliver a copy of such notice or demand to the mortgagee of any mortgage on the Development Property (a "Mortgage") at the address of such mortgagee provided to the City in a written notice from the Developer or the mortgagee. Section 6.3 Mortgagee's Option to Cure Events of Default. Upon the occurrence of an Event of Default, the mortgagee under any Mortgage will have the right, at its option, to cure or remedy such Event of Default. Section 6.4 Defaults Under Mortgage. The Developer will use its best efforts to obtain an agreement from any mortgagee under a Mortgage that, in the event the Developer is in default under any Mortgage, the mortgagee, within ten (10) days after it becomes aware of any default and prior to exercising any remedy available to it due to such default, will notify the City in writing of(i) the fact of default; (ii) the elements of default; and (iii) the actions required to cure the default. If, within the time period required by the Mortgage, the City cures any default under the Mortgage, the mortgagee will pursue none of its remedies under the Mortgage based on such default. Section 6.5 Subordination of Agreement. In order to facilitate the obtaining of financing for the construction of the Minimum Improvements, the City agrees to execute a subordination agreement in form and substance acceptable to the City to subordinate the provisions of this Development Agreement and the Deed to the documents executed in connection with the Construction Loan. • • 1674205v8 3 5