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<br />(e) the occurrence of any act or omission of Borrower that <br />results in waste to or of the Property or the Improvements and which has a material adverse <br />effect on the value of the Property or the Improvements; <br /> <br />(f) the removal or disposal of any personal property or fixtures <br />or the retention of rents, insurance proceeds, or condemnation awards in violation of the Deed of <br />Trust; <br /> <br />(g) the material misapplication of Loan Proceeds; <br /> <br />(h) the material misapplication of the proceeds of any <br />insurance policy or award resulting from condemnation or the exercise ofthe power of eminent <br />domain or by reason of damage, loss or destruction to any portion of the Property or the <br />Improvements; and <br /> <br />(i) the failure of Borrower to pay all amounts payable under <br />the Note in full if Borrower Transfers the Property in contravention of the City Documents. <br /> <br />1.9 NO RIGHT OF OFFSET. In no event shall any amount due under this Loan <br />Agreement become subject to any rights of offset, deduction or counterclaim on the part of <br />Borrower. <br /> <br />ARTICLE II <br /> <br />USE AND DISBURSEMENT OF PROCEEDS <br /> <br />2.1 USE OF PROCEEDS. Borrower shall use the Loan Proceeds solely and <br />exclusively to pay for the purchase ofthe Project and such other costs related to refurbishment of <br />the Project as Agency may approve in writing. <br /> <br />2.2 DISBURSEMENT OF LOAN PROCEEDS. Upon satisfaction of the conditions <br />set forth in Section 2.3, at close of escrow for the Loan, the Loan Proceeds shall be disbursed <br />into escrow for Borrower's acquisition of the Property. <br /> <br />2.3 CONDITIONS PRECEDENT TO DISBURSEMENT OF LOAN PROCEEDS. <br />City's obligation to fund the Loan and disburse the proceeds thereof is conditioned upon the <br />satisfaction of all of the following conditions: <br /> <br />(A) Borrower's delivery to City of each of the City Documents fully-executed <br />and acknowledged as appropriate; <br /> <br />(B) conveyance of the Property to Borrower and the recordation of the City <br />Deed of Trust in the Official Records of Alameda County subject only to Permitted <br />Encumbrances (as defined in Section 7.1 of the Deed of Trust) and the recordation ofthe <br />Memorandum of the OP A; <br /> <br />(C) all funds necessary to acquire the Property shall have been deposited into <br /> <br />escrow; <br /> <br />818012-3 <br /> <br />6 <br />