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may be subordinated only to such liens and subject only to such title exceptions as City may <br />approve in writing. The City acknowledges that Developer’s construction and permanent <br />lender(s) may require the subordination of the Leasehold Deed of Trust, and agrees to <br />subordinate the Memorandum of this Agreement, the Leasehold Deed of Trust and Regulatory <br />Agreement provided that the terms of such construction and permanent loans are commercially <br />reasonable and consistent with the Financing Plan. Developer acknowledges that the Leasehold <br />Deed of Trust secures performance of Developer’s obligations pursuant to this Agreement and <br />the Regulatory Agreement which may survive repayment of the HOME Note, and that the <br />Leasehold Deed of Trust shall not be reconveyed prior to Developer’s satisfaction of such <br />obligations. <br />4.4 Use and Disbursement of Proceeds. The Home Loan Proceeds shall be used <br />solely to fund the construction and development of the Project. <br />4.5 Conditions to Disbursement of Loan Proceeds. City’s obligation to fund the <br />HOME Loan and disburse the proceeds thereof is conditioned upon the satisfaction of all of the <br />following conditions: <br />(a) Developer’s delivery to City of each of the following: (i) certificate of <br />good standing, certified by the Secretary of State indicating that Developer is properly organized, <br />in good standing, and authorized to do business in the State of California, (ii) a certified <br />resolution indicating that Developer has authorized this transaction and that the persons <br />executing this Agreement, the Regulatory Agreement and the City Documents on Developer’s <br />behalf have been duly authorized to do so, (iii) certified copies of Developer’s articles of <br />incorporation, bylaws, and I.R.S. tax-exemption determination letter. <br />(b) Developer’s delivery to the City of evidence of insurance coverage in <br />accordance with the requirements set forth in Section 11.2. <br />(c) Developer’s delivery of the Regulatory Agreement and each of the City <br />Documents, each fully-executed and acknowledged as applicable. <br />(d) Recordation of the Memorandum, the Regulatory Agreement, and the <br />Leasehold Deed of Trust in the Official Records. <br />(e) The issuance by an insurer satisfactory to City of an A.L.T.A. lender’s <br />policy of title insurance (“City Title Policy”) for the benefit of City in the amount of the HOME <br />Loan, insuring that the lien of the Leasehold Deed of Trust is subject only to such defects, liens, <br />conditions, encumbrances, restrictions, easements and exceptions as City may approve in writing <br />and containing such endorsements as City may reasonably require, with the cost of the City Title <br />Policy to be paid by Developer. <br />(f) Receipt by the City of evidence that Borrower has sufficient financing to <br />construct the Project, and copies of such documents related to the construction and financing of <br />the Project as City may reasonably request. <br />144\259\1892880.4 <br />12