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ATTACHMENT 2 <br />residual receipts (to be split among the assumed City loans and the Takeback Note) following <br />payment of Project operating expenses, senior debt service, contributions to replacement reserves <br />in an amount specified in the Takeback Loan Documents, and payment of deferred developer fee <br />and partnership and asset management fees in amounts specified in the Takeback Loan <br />Documents and Developer's partnership agreement. If other public agency lenders provide loans <br />for the Project that are payable from residual receipts, the percentage share of residual receipts <br />that will be made available for payment of the City loans, the Takeback Loan, and such other <br />loans maybe increased. All outstanding amounts shall be due and payable on the Maturity Date. <br />The Takeback Deed of Trust shall be subordinated to the deeds of trust securing the repayment <br />of the Project's conventional construction and permanent loans but shall not be subordinated to <br />any other deeds of trust. The form of the Takeback Loan Documents shall be subject to the <br />mutual agreement of the Parties. <br />Section 5. Closing. <br />a. Expenses. All expenses, fees or costs incurred in connection with <br />the Ground Lease of the Property, including but not limited to city and county documentary <br />transfer tax, conveyance taxes, recording charges (if any), and costs of title insurance shall be <br />borne by the Developer. Developer shall pay its own attorneys' and consultants' fees and costs <br />incurred in connection with negotiation and execution of this Agreement, the Ground Lease, and <br />the Takeback Loan Documents, and upon the Closing Date, shall reimburse City for its legal fees <br />incurred in connection with such documents in an amount not to exceed $ <br />b. Proration of Taxes. Real property taxes on the Property shall be <br />prorated as of the Closing Date. <br />c. Title Insurance. The closing of the Ground Lease and transfer of <br />the Improvements shall be conditioned on: (1) payment of the upfront Capitalized Rent; (2) <br />Developer securing all financing (or commitments for financing) necessary for the development <br />of the Project; (3) termination of the Existing Ground Lease; (4) the issuance to Developer of an <br />ALTA leasehold policy of title insurance, from Old Republic Title Company, or other title <br />company chosen by Developer ("Title Company"), insuring the Developer's leasehold interest in <br />the Property subject only to reasonable exceptions approved by Developer; (5) Title Company's <br />issuance to the City of an ALTA lender's policy of title insurance insuring the priority of the <br />Takeback Loan Deed of Trust and all other City deeds of trust secured by the Project, subject <br />only to such exceptions and exclusions as maybe reasonably acceptable to the City, and <br />containing such endorsements as the City may reasonably require, and (6) the satisfaction of <br />such other conditions to closing as maybe specified in the Ground Lease or the Takeback Loan <br />Documents. <br />Section 6. Notices. All notices or other communications made pursuant to this <br />Agreement shall be in writing and shall be deemed properly delivered, given or served to the <br />parties at the following addresses when (i) mailed by certified mail, postage prepaid, return <br />receipt requested; (ii) sent by express delivery service, charges prepaid with a delivery receipt; or <br />(iii) personally delivered when a delivery receipt is obtained: <br />City: <br />OAK #4811-5363-1135 v2 <br />