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(f) Fannie Mae Eligibility. In the event that the terms of the City Loan (alone or in <br /> conjunction with the HELP Loan) do not comply with Fannie Mae's applicable subordinate debt <br /> requirements, the City shall cooperate with Borrower to modify the terms of the City Loan so <br /> that the City Loan (alone or in conjunction with the HELP Loan) meets such requirements. <br /> Section 2.4 Prepayment Of Loan. <br /> No prepayment penalty will be charged to the Borrower for payment of all or any portion <br /> of the Loan amount prior to the end of the Term. <br /> Section 2.5 Use of Loan Funds. <br /> The Borrower shall use the Loan to fund the Project consistent with the Approved <br /> Development Budget. The Borrower shall not use the Loan funds for any other purposes without <br /> the prior written consent of the City. <br /> Section 2.6 Security. <br /> (a) Borrower shall secure its obligation to repay the Loan, as evidenced by the Note, <br /> by executing the Deed of Trust, and, upon acquisition of the Leasehold Estate, recording it as a <br /> lien against the Leasehold Estate. <br /> (b) The City agrees to subordinate the Deed of Trust and the Regulatory Agreement <br /> to the liens of the deeds of trust securing the Approved Financing and to any regulatory <br /> agreement associated with the Approved Financing. The City further agrees that such <br /> subordination shall, if required by the lender of any Approved Financing, include an agreement <br /> by the City to exercise the remedies under the Loan Documents only upon consent from such <br /> lender of Approved Financing. <br /> Section 2.7 Predevelopment Loan Cancellation. <br /> Upon execution of this Agreement and pursuant to Section 1.6(a) of the Predevelopment <br /> Loan Agreement, the Predevelopment Loan Agreement shall terminate. The City shall cancel <br /> the promissory note evidencing the Predevelopment Loan and return such promissory note to <br /> Borrower. Any advances under the Predevelopment Loan shall be considered as advances of <br /> funds under the Loan. <br /> Section 2.8 Conditions Precedent to Disbursement. <br /> Upon satisfaction of the following conditions, the City shall disburse any remaining Loan <br /> proceeds to the Bond Trustee for Borrower's use: <br /> (a) The Borrower has acquired the Leasehold Estate; <br /> (b) There exists no Default nor any act, failure, omission or condition that would <br /> constitute an event of Default under this Agreement. <br /> 8 <br /> 144V105\217525.16 <br />