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6.6 Recovery of City Costs. Borrower shall reimburse City for all City costs, <br /> including but not limited to reasonable attorneys' fees, incurred in reviewing instruments and <br /> other legal documents proposed to affect a Transfer under this Agreement and in reviewing the <br /> qualifications and financial resources of a proposed successor, assignee, or transferee within ten <br /> (10) days following City's delivery to Borrower of an invoice detailing such costs. <br /> ARTICLE VII <br /> SECURITY FINANCING AND RIGHTS OF MORTGAGEES <br /> 7.1 Mortgages and Deeds of Trust for Development. Mortgages and deeds of trust, or <br /> any other reasonable security instrument are permitted to be placed upon the Property only for <br /> the purpose of securing loans approved pursuant to the approved Financing Plan for the purpose <br /> of financing the acquisition of the Property and the rehabilitation of the Improvements. <br /> Borrower shall not enter into any conveyance for such financing without the prior written <br /> approval of the City Manager or his or her designee. As used herein, the terms "mortgage" and <br /> "deed of trust" shall mean any security instrument used in financing real estate acquisition, <br /> construction and land development. <br /> 7.2 Subordination. The City agrees that it will not withhold consent to reasonable <br /> requests for subordination of the Deed of Trust and the Regulatory Agreement to deeds of trust <br /> provided for the benefit of lenders identified in the Financing Plan provided that the instruments <br /> effecting such subordination include reasonable protections to the City in the event of default. <br /> City agrees that the City Deed of Trust and the Regulatory Agreement may be subordinated to <br /> deeds of trust and regulatory agreements executed for the benefit of the California Housing <br /> Finance Agency (CaIHFA) in connection with the provision of financing for the Project. <br /> 7.3 Notice of Default and Right to Cure. Whenever City delivers any notice of <br /> default hereunder, City shall concurrently deliver a copy of such notice to each holder of record <br /> of any mortgage or deed of trust secured by the Property provided that City has been provided <br /> with the address for delivery of such notice. City shall have no liability to any such holder for <br /> any failure by the City to provide such notice to such holder. Each such holder shall have the <br /> right, but not the obligation, at its option, within sixty (60) days after the receipt of the notice, to <br /> cure or remedy any such default or breach. In the event that possession of the Property (or any <br /> portion thereof) is required to effectuate such cure or remedy, the holder shall be deemed to have <br /> timely cured or remedied the default if it commences the proceedings necessary to obtain <br /> possession of the Property within sixty (60) days after receipt of the City's notice, diligently <br /> pursues such proceedings to completion, and after obtaining possession, diligently completes <br /> such cure or remedy. A holder who chooses to exercise its right to cure or remedy a default or <br /> breach shall first notify City of its intent to exercise such right prior to commencing to cure or <br /> remedy such default or breach. <br /> 7.4 City Right to Cure Defaults. In the event of a breach or default by Borrower <br /> under a mortgage or deed of trust secured by the Property, City may cure the default, without <br /> acceleration of the subject loan, following prior notice thereof to the holder of such instrument <br /> and Borrower. In such event, Borrower shall be liable for, and City shall be entitled to <br /> reimbursement from Borrower for all costs and expenses incurred by City associated with and <br /> 1755895.3 20 <br />