Agmt 2002 Citizens Housing Corporation

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Loan Agreement San Leandro and Citizens' Housing Corporation Page 3 of 3 The making and performance by Developer of this Agreement does not violate any provision of law, or City of San Leandro statute or ordinance, or result in a breach of or constitute a default under any agreement, indenture or other instrument to which Developer is a party or by which Developer may be bound. SECTION 2.03 AUTHORIZATION This Agreement, all agreements appended hereto have been duly authorized, executed and delivered, and are valid and binding agreements of Developer. SECTION 2.04 LITIGATION There are no pending or threatened actions or proceedings before any court or administrative agency which may adversely affect the financial condition or operation of Developer other than those heretofore disclosed by Developer to City in writing. SECTION 2.05 CORRECTNESS OF FINANCIAL STATEMENTS Any financial statements heretofore delivered by Developer to City present fairly and accurately the financial condition of Developer, and have been prepared in accordance with generally accepted accounting principles consistently applied. SECTION 2.06 SUBORDINATION If necessary to secure other financing, City may execute a subordination agreement resulting in City's security interest in the Property becoming subject to and of lower priority than the lien of some other security instrument. Such agreement shall be entered into only after City has reviewed and approved the form of the subordination agreement. SECTION 2.07 TAXES Developer has filed any required tax returns and has paid and agrees to continue to pay in full in a timely manner all taxes or assessments which have or may become due pursuant to said retums or pursuant to any assessments levied against the Developer or its personal or real property by any taxing agency, federal, state, or local. No tax liability has been assessed by the Internal Revenue Service or other taxing agency, federal, state or local, for taxes materially in excess of those already provided for and the Developer knows of no basis for any such deficiency assessment. SECTION 2.08 PERMITS, FRANCHISES Developer possesses, and will hereafter possess, all permits, memberships, franchises, contracts, and licenses required and all trademark rights, trade name rights, patents, patent rights, and fictitious name rights necessary to enable it to conduct the business in which it is now engaged without conflict with the rights of others. SECTION 2.09 EVIDENCE OF PROJECT FUNDING 3