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7.1.I Memorandum and Regulatory Agreement to be Senior to Mort~a~es, The <br />Agency agrees that pursuant to Health and Safety Code Section 33334_l4(a)(4), Agency will not <br />withhold consent to reasonable requests for subordination of the Deed of Trust and Regulatory <br />Agreement to deeds of trust provided for the benefit of lenders identified in the Financing Plan as <br />it may be updated with Agency approval, provided that the instruments effecting such <br />subordination include reasonable protections to the Agency in the event of default consistent <br />with the requirements of Health and Safety Code Section 33334.14(x)(4). <br />7.2 Bolder Not Obligated to Construct. The holder of any mortgage, deed of trust <br />authorised by this Agreement shall not be obligated to complete construction of the <br />lmprovements or to guarantee such completion. Nothing in this Agreement shall be deemed to <br />permit or authorize any such holder to devote the Property or any portion thereof to any uses, or <br />to construct any improvements thereon, other than those uses or improvements provided for or <br />authorised by this Agreement. <br />7.3 Notice of Default and Right to Cure. Whenever Agency delivers any notice of <br />default hereunder, Agency shall concurrently deliver a copy of such notice to each holder of <br />record of any mortgage or deed of trust secured by the Property or the Improvements, provided <br />that Agency has been provided with the address for delivery of such notice. Agency shall have <br />no liability to any such holder for any failure by the Agency to provide such notice to such <br />holder. Each such holder shall have the right, but not the obligation, at its option, to cure or <br />remedy any such default or breach within the cure period provided to Developer extended by and <br />additional sixty (60) days. In the event that possession of the Property or the Improvements (or <br />any portion thereof) is required to effectuate such cure or remedy, the holder shall be deemed to <br />have timely cured or remedied the default if it commences the proceedings necessary to obtain <br />possession of the Property or lmprovements, as applicable, within sixty (60) days after receipt of <br />the Agency's notice, diligently pursues such proceedings to completion, and after obtaining <br />possession, diligently completes such cure or remedy. A holder who chooses to exercise its right <br />to cure or remedy a default or breach shall first notify Agency of its intent to exercise such right <br />prior to commencing to cure or remedy such default or breach. Nothing contained in this <br />Agreement shall be deemed to permit or authorize such holder to undertake or continue the <br />construction of the Project (beyond the extent necessary to conserve or protect the same) without <br />first having expressly assumed in writing Developer's obligations to Agency under this <br />Agreement. The holder in that event must agree to complete, in the manner provided in this <br />Agreement, the Project and the lmprovements and submit evidence reasonably satisfactory to <br />Agency that it has the development capability on staff or retainer and the financial capacity <br />necessary to perform such obligations. Any such holder properly completing the Project <br />pursuant to this Section shall assume all rights and obligations of Developer under this <br />Agreement and shall be entitled to a Certificate of Completion upon compliance with the <br />requirements of this Agreement. <br />7.4 Intentionally omitted. <br />7.5 Agency Right to Cure Defaults. In the event of a breach or default by Developer <br />under a mortgage or deed of trust secured by the Property or the Improvements, Agency may <br />cure the default, without acceleration of the subject loan, following prior notice thereof to the <br />holder of such instrument and Developer. In such event, Developer shall be liable for, and <br />1 l 789RG-R 26 <br />