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Article Two: SECURITY FINANCING AND RIGHTS OF HOLDERS 2.01 No Encumbrances Except for Development Purposes. Notwithstanding any other provision of this Agreement, mortgages and deeds of trust, or any other reasonable method of security (including assignment of leases or ground leases to a lender as security for a loan), are permitted to be placed upon the Property before the Certificate of Completion has been issued by the Agency, but only for the purpose of securing loans of funds to be used for financing the acquisition of the Property and/or the design and construction of Improvements and any other expenditures reasonably necessary and appropriate to develop the Property under this Agreement. The Developer shall promptly notify the Agency of any mortgage, deed of trust, sale and lease -back or other financing, conveyance, encumbrance or lien that has been or will be created or attached to the Property. The words "mortgage" and "deed of trust" as used herein include all other appropriate modes of financing real estate acquisition, construction, and land development. 2.02 Holder Not Obligated to Construct. The holder of any mortgage, deed of trust or other security interest authorized by this Agreement is not obligated to construct or complete any improvement or to guarantee such construction or completion; nor shall any covenant or any other provision in conveyances from the Agency to Developer evidencing the realty comprising the Property or any part thereof be construed so to obligate such holder. Nothing in this Agreement shall be deemed to permit or authorize any such holder to devote the Property or any portion thereof to any uses, or to construct any improvements thereon, other than those uses or improvements provided for or authorized by this Agreement. 2.03 Notice of Default and Right to Cure. Whenever the Agency pursuant to its rights set forth in this Agreement delivers any notice or demand to the Developer with respect to the commencement, completion, or cessation in the construction of the Improvements the Agency shall at the same time deliver to each holder of record of any mortgage, deed of trust or other security interest authorized by this Agreement a copy of such notice or demand. Each such holder shall (insofar as the rights of the Agency are concerned) have the right, but not the obligation, at its option, within ninety (90) days after the receipt of the notice, to cure or remedy or commence to cure or remedy any such default or Disposition and Development Page 21 of 30 Agreement - Vanuatu Properties Draft December 4, 1997