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due under the City Documents shall be payable in full on the fifty-fifth (55th) anniversary of the <br />date that City issues the final certificate of occupancy for the Project. <br />5.3 Security. As security for repayment of the City Note, Developer shall execute the <br />Leasehold Deed of Trust when Developer acquires the ground Leasehold Interest. Pursuant to the <br />Leasehold Deed of Trust, the City shall be provided a lien against the Property and the <br />Improvements. The Leasehold Deed of Trust shall be recorded in the Official Records on the <br />date that Developer acquires the Property. The Leasehold Deed of Trust may be subordinated <br />only to such liens and subject only to such title exceptions as City may approve in writing. <br />Developer acknowledges that the Leasehold Deed of Trust secures performance of Developer’s <br />obligations pursuant to this Agreement and the Regulatory Agreement which may survive <br />repayment of the City Note, and that the Leasehold Deed of Trust shall not be reconveyed prior <br />to Developer’s satisfaction of such obligations. The City acknowledges that Developer’s <br />construction and permanent lender(s) may require the subordination of the Leasehold Deed of <br />Trust. <br />5.4 Use and Disbursement of Proceeds. If the Developer secures six hundred <br />thousand dollars ($600,000) in funds from sources other than the City Loan Proceeds to be used <br />for pre-development costs, either by committing its own funds and/or by obtaining a <br />commitment of funds from other sources that may be used for pre-development costs, the City <br />shall (subject to this Section 5.4 and 5.5) disburse up to Developer up to five hundred thousand <br />dollars ($500,000) of the City Loan Proceeds to fund pre-development related costs prior to the <br />date that Developer acquires the Ground Leasehold Interest (the "Predevelopment Component") <br />subject to the following draw procedures. After the Effective Date and prior to securing a <br />reservation of 9% low income housing tax credits, the Developer may draw up to three hundred <br />fifty thousand dollars ($350,000) of the Predevelopment Component. After Developer has <br />obtained a reservation of 9% low income housing tax credits, Developer may draw up to an <br />additional one hundred fifty thousand dollars ($150,000) of the Predevelopment Component. In <br />no event shall the City be obligated to disburse more than five hundred thousand dollars <br />($500,000) of the City Loan Proceeds to the Developer prior to Developer acquiring the Ground <br />Leasehold Interest. The City Loan Proceeds disbursed following Developer's acquisition of the <br />Ground Leasehold Interest shall be referred to as the "Construction Component". <br />Prior to disbursement of any Predevelopment Component funds, Developer shall provide <br />evidence to City that Developer has expended up to (1) Three Hundred Fifty thousand dollars <br />($350,000) for pre-development costs from other sources of funds (2) Developer has <br />commitments for the remaining Two Hundred Fifty ($250,000) in predevelopment funds. <br />5.5 Conditions to Disbursement of Loan Proceeds. City’s obligation to fund the City <br />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 />144\259\1892880.4 <br />16