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the qualifications and financial resources of a proposed successor, assignee, or transferee within ten (10) days following Agency's delivery to Developer of an invoice detailing such costs. 6.7 Intentionally omitted. ARTICLE VII SECURITY FINANCING AND RIGHTS OF MORTGAGEES 7.1 Mortgages and Deeds of Trust for Development. Mortgages and deeds of trust, or any other reasonable security instrument are permitted to be placed upon the Property only for the purpose of securing loans for the purpose of financing the acquisition of the Property, the design and construction of the Improvements, and other expenditures reasonably necessary for development of the Property pursuant to this Agreement. Developer shall not enter into any conveyance for such financing that is not contemplated in the Financing Plan as it may be updated with Agency approval, without the prior written approval of Agency's Executive Director or his or her designee. As used herein, the terms "mortgage" and "deed of trust" shall mean any security instrument used in financing real estate acquisition, construction and land development. 7.1.1 Memorandum and Regulatory Agreement to be Senior to Mortgages. The Agency agrees that pursuant to Health and Safety Code Section 33334.14(a)(4), Agency will not withhold consent to reasonable requests for subordination of the Deed of Trust and Regulatory Agreement to deeds of trust provided for the benefit of lenders identified in the Financing Plan as it maybe updated with Agency approval, provided that the instruments effecting such subordination include reasonable protections to the Agency in the event of default consistent with the requirements of Health and Safety Code Section 33334.14(a)(4). 7.2 Holder Not Obligated to Construct. The holder of any mortgage, deed of trust authorized by this Agreement shall not be obligated to complete construction of the Improvements or to guarantee such completion. Nothing in this Agreement shall be deemed to permit or authorize any such holder to devote the Property or any portion thereof to any uses, or to construct any improvements thereon, other than those uses or improvements provided for or authorized by this Agreement. 7.3 Notice of Default and Right to Cure. Whenever Agency delivers any notice of default hereunder, Agency shall concurrently deliver a copy of such notice to each holder of record of any mortgage or deed of trust secured by the Property provided that Agency has been provided with the address for delivery of such notice. Agency shall have no liability to any such holder for any failure by the Agency to provide such notice to such holder. Each such holder shall have the right, but not the obligation, at its option, to cure or remedy any such default or breach within the cure period provided to Developer extended by and additional sixty (60) days. In the event that possession of the Property (or any portion thereof) is required to effectuate such cure or remedy, the holder shall be deemed to have timely cured or remedied the default if it commences the proceedings necessary to obtain possession of the Property within sixty (60) days after receipt of the Agency's notice, diligently pursues such proceedings to completion, and after 1178986-5 25