07-28-1999 Council Agenda - Laserfiche WebLink

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ARTICLE VIII MORTGAGE FINANCING Section 8.1. Limitation Upon Encumbrance of Property. Prior to the 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. 1054867.2 Page 77