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SECTION 4.11 EXPENSES AND CLOSING COSTS Pay all fees, expenses, and charges in
<br />respect to the Loan, or its making or in any way connected therewith including, but not limited to,
<br />the fees and out-of-pocket expenses of legal counsel employed by LENDER, title insurance and
<br />survey costs, recording and filing fees, mortgage taxes, documentary stamp, and any other taxes,
<br />fees, and expenses payable in connection with this transaction and with the enforcement of this
<br />AGREEMENT, PROMISSORY NOTE, SECURITY AGREEMENT, PERSONAL SECURITY AGREEMENT,
<br />CDBG EMPLOYMENT AGREEMENT OR REGULATORY AGREEMENT.
<br />SECTION 4.12 EXPENDITURE OF FUNDS WITHIN ONE (1) YEAR BORROWERS shall
<br />expend the proceeds provided by LENDER pursuant to Section 1.01 of the Loan for purposes set
<br />forth in Section 1.04 of the Loan within one (1) year of the date of execution of the Loan.
<br />SECTION 4.13 PROVIDE ADDITIONAL EQUITY Provide additional equity funds to cover
<br />additional project cost incurred as a result of overruns or unanticipated expenses or changes in work
<br />orders in the project as specified in SECTION 1.04 of this AGREEMENT.
<br />SECTION 4.14 HOLD HARMLESS AND RESPONSIBILITY OF BORROWERS BORROWERS
<br />shall take all responsibility for the work paid for with borrowed funds, shall bear all losses and
<br />damages directly or indirectly resulting to him, to any agent, to the City, to City officers and
<br />employees, or to parties designated by the City, on account of the performance of character of the
<br />work, unforeseen difficulties, accidents, occurrences or other causes predicated on active or passive
<br />negligence of the BORROWER or any agent thereof. BORROWER shall indemnify, defend and hold
<br />harmless the City, its officers, officials, directors, employees and agents from and against any or all
<br />loss, liability, expense, claim, costs (including costs of description directly or indirectly arising from
<br />the performance of the work paid for with the borrowed funds. This paragraph shall not be
<br />construed to exempt the City, its employees and officers form its own fraud, willful injury or
<br />violation of law whether willful or negligent. For purposes of Section 2782 of the Civil Code the
<br />parties hereto recognize and agree that this agreement is not a construction contract. By execution
<br />of this AGREEMENT, BORROWER acknowledges and agrees that he has read and understands the
<br />provisions hereof and that this paragraph is a material element of consideration.
<br />SECTION 4.15 NOTICE TO LENDER Within 72 hours give notice in writing to LENDER
<br />of (1) the occurrence of any EVENT OF DEFAULT; (2) any change in name or address of
<br />BORROWER or BORROWER's business location, and in the case of an organization, any change in
<br />name, identity or legal structure; or (3) any uninsured or partially uninsured loss through fire, theft,
<br />liability, or property damage in excess of an aggregate of Twenty Five Hundred Dollars ($2,500.00).
<br />SECTION 4.16 TAXES AND OTHER LIABILITIES Pay and discharge when due any and
<br />all indebtedness, obligations, assessments, taxes real and personal, including federal and state payroll
<br />and income taxes, except such as BORROWER may in good faith contest or as to which a bona fide
<br />dispute may arise; provided provision is make to the satisfaction of LENDER for eventual payment
<br />thereof in the event that it is found that the same is an obligation of BORROWER.
<br />SECTION 4.17 LITIGATION Within three working days of learning of any litigation
<br />pending or threatened in excess of Twenty Five Hundred Dollars ($2,500.00) give notice in writing
<br />to LENDER.
<br />Loan Agreement Page 6 of 11
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