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(xi) Borrower's construction financing for the Project shall have closed or shall <br />close concurrently with City's disbursement of funds for construction, and Borrower shall have <br />delivered to City evidence reasonably satisfactory to City that Borrower has secured binding <br />commitments, subject only to commercially reasonable conditions, for all Project construction and <br />permanent financing; and <br />(xii) Borrower's delivery to City, and City approval of the Project construction <br />contract, budget, and construction schedule. <br />1.10.2 No Obligation to Disburse Proceeds Upon Default. Notwithstanding any <br />other provision of this Agreement, the City shall have no obligation to disburse or authorize the <br />disbursement of any portion of the Loan Proceeds following: <br />(i) the failure of any of Borrower's representations and warranties made in this <br />Agreement or in connection with the Loan to be true and correct in all material respects; <br />(ii) the termination of this Agreement by mutual agreement of the Parties; <br />(iii) the occurrence of an Event of Default under this Agreement, the Regulatory <br />Agreement, the Note or the Deed of Trust that remains uncured beyond any applicable cure period. <br />1.11 Subordination. The City agrees to subordinate the Deed of Trust and the Regulatory <br />Agreement to deeds of trust recorded for the benefit of Project construction and permanent lenders <br />provided that such lenders agree to include in their subordination agreement and deeds of trust <br />conditions substantially similar to the following conditions: (i) City shall receive any notices of <br />default issued by such lender to Borrower; (ii) City shall have the right to cure any default by <br />Borrower within sixty (60) days after a notice of default; (iii) City shall have the right to enforce this <br />Agreement without the lender accelerating its debt, provided the City has cured or is attempting to <br />cure any defaults under lender's deed of trust; and (iv) City shall have the right to review and <br />approve the loan documents for any financing secured by the Project, which approval shall not be <br />unreasonably withheld. To implement any such subordination, the City agrees to cooperate with <br />Borrower and execute such subordination agreements that may be reasonably required, in form and <br />content approved by the City Attorney. <br />ARTICLE II <br />GENERAL REQUIREMENTS <br />2.1 Rental Agreement; Security Deposits. Leases and rental agreements used for HOME - <br />assisted units must comply with Section 92.253 of the federal HOME Regulations, as summarized in <br />Section 11 of the Regulatory Agreement. Borrower shall comply with the requirements pertaining to <br />security deposits as set forth in Section 14 of the Regulatory Agreement. <br />2.2 Property Management of HOME -Assisted Units. Following Borrower's acquisition <br />of the Property, Borrower shall maintain the Project in compliance with all applicable housing <br />quality standards and City code requirements for the duration of the Regulatory Agreement. <br />2.3 Occupancy Procedures. Borrower shall adopt written tenant selection policies and <br />criteria in accordance with the requirements set forth in Section 13 of the Regulatory Agreement. <br />2220130.1 Page 7 <br />