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(vi) the removal or disposal of any personal property or fixtures or the <br />retention of rents, insurance proceeds, or condemnation awards in violation of the Leasehold <br />Deed of Trust; <br />(vii) the material misapplication of HOME Loan Proceeds; and <br />(viii) the material misapplication of the proceeds of any insurance policy or <br />award resulting from condemnation or the exercise of the power of eminent domain or by reason <br />of damage, loss or destruction to any portion of the Property or the Improvements. <br /> <br />ARTICLE V. <br /> <br />FINANCIAL ASSISTANCE – CITY LOAN <br /> <br />5.1 City Loan. Using funds from the City’s General Fund, the City shall provide a <br />loan (“City Loan”) to Developer in the amount of up to Seven Hundred Forty-Three Thousand <br />Two Hundred Thirty-Nine Dollars ($743,239) upon the terms and conditions and for the <br />purposes set forth in this Agreement. The City Loan shall be evidenced by a promissory note <br />(the “City Note”) executed by Developer as Borrower substantially in the form attached hereto <br />as Exhibit E, and shall be secured by a Leasehold Deed of Trust (the “Leasehold Deed of <br />Trust”) executed by Developer as Trustor, concurrently with Developer's acquisition of the <br />Ground Leasehold Interest, substantially in the form attached hereto as Exhibit F and recorded <br />against the Property subordinate only to such liens as City shall approve in writing. The <br />outstanding principal balance of the City Note will accrue three percent (3%) annual simple <br />interest commencing upon the date of disbursement. <br />Provided that Developer has complied with all conditions precedent to disbursement of <br />the City Loan set forth in Section 5.5, the proceeds of the City Loan (the “City Loan Proceeds”) <br />shall be disbursed in accordance with Section 5.4 hereof. <br />Without limiting the generality of the foregoing, subject to Section 5.6, it is expressly <br />understood by the Parties that City’s obligation to disburse City Loan Proceeds for the <br />Construction Component (defined below) is contingent upon the closing of construction <br />financing for the Project and Developer’s provision of evidence reasonably satisfactory to the <br />City that Developer has obtained binding commitments for all sources of funds necessary for <br />construction and permanent financing of the Project. City shall have the right to terminate this <br />Agreement if Developer does not provide City with evidence reasonably satisfactory to City that <br />Developer has obtained binding commitments for additional financing sufficient to fully fund the <br />construction and permanent financing of the Project within thirty-eight (38) months following <br />the Effective Date. The Parties agree that City shall disburse City Loan Proceeds only for the <br />purposes set forth in Section 5.4. <br />5.2 Payment Dates; Maturity Date. Annual payments shall be due and payable on a <br />residual receipts basis in accordance with the formula set forth in the City Note. The entire <br />outstanding principal balance of the City Loan together with accrued interest and all other sums <br />144\259\1892880.4 <br />15