08-13-2003 Council Agenda - Laserfiche WebLink

Home Browse Search

ARTICLE VIII MORTGAGE FINANCING Section 8.1 Limitation Upon Encumbrance of Property. Prior to the substantial completion of the Minimum Improvements, as determined by the City, neither the Developer nor any successor in interest to the Development Property or any part thereof shall engage in any financing or any other transaction creating any mortgage or other encumbrance or lien upon the Development Property, other than Permitted Encumbrances, whether by express agreement or operation of law, or suffer any encumbrance or lien to be made on or attach to the Development Property, other than Permitted Encumbrances, except: (a) for the purposes of obtaining funds only to the extent necessary for the acquisition of the Development Property and making the Minimum Improvements (including, but not limited to, labor and materials, equipment, professional fees, real estate taxes, construction interest, organization and other indirect costs of development, costs of constructing the Minimum Improvements, an allowance for contingencies, costs of issuance of any bond or note issue to fund construction or acquisition of the Project, amounts required to fund any bond or note reserves relating to construction or acquisition of the Project, and amounts required to fund any required escrow accounts); and (b) only upon the prior written approval of the City in accordance with Sections 8.1 and 8.2. The City shall not approve any Mortgage which does not contain terms that conform to the terms of Section 8.5, except as provided in Section 8.6 of this Agreement. Section 8.2 Approval of Mortgage. The City shall approve a Mortgage if: (a) the City first receives a copy of all mortgage documents; (b) the mortgage loan, together with other funds available to the Developer, will, in the reasonable judgment of the City, be sufficient to construct the Minimum Improvements, if prior to the completion of the Minimum Improvements; (c) the City is not entitled under Section 10.02 to exercise any of the remedies set forth therein as a result of an Event of Default; and (d) the City determines that the terms of the Mortgage conform to the terms of Section 8.5. Section 8.3 Notice of Default; Copy to Mortgagee. Whenever the City shall deliver any notice or demand to the Developer with respect to any breach or default by the Developer in his obligations or covenants under the Agreement, the City shall at the same time forward a copy of such notice or demand to each holder of any Mortgage authorized by the Agreement at the last address of such holder shown in the records of the City. 1549292v2 1R - 2 2 -