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must be maintained and evidence of insurance must be provided for at least five (5) years after completion of the City Funded Improvements. Section 4.6 Permitted Transfers/Consent. Borrower may only cause or permit any voluntary transfer, assignment or encumbrance of its interest in the Property or in the Project in accordance with Section 10,2 of the DDA. Any transfer, assigmment, encumbrance or sublease not made in accordance with Section 10.2 of the DDA will be voidable and, at the City's election, constitute an Event of Default under this Agreement. The City's consent to any specific assignment, encumbrance, sublease or other transfer will not constitute its consent to any subsequent transfer or a waiver of any of the City's rights under this Agreement. However, Borrower shall be prohibited from encumbering the Property or Project until the demolition of the Property has been completed, Demolition shall mean the completion of all the following: Items 1 through 4 of the scope of work described in Exhibit C as well as; (1) grade site to drain, including installation of all erosion control devices; (2) grade and shore site after demolition to sufficiently support all adjacent existing right of way (such as alley, sidewalks, and streets) and nearby adjacent structures; and (3) Removal of temporary traffic control devices utilized for demolition and rough grading of the site from Broadway, Third Street and Sycamore Street, and open streets to safe travel. After completion of demolition, the Borrower may request the City subordinate the Loan Documents, including the Deed of Trust, to any Permitted Eneumbrance(s) authorized by the DDA. Upon request of Borrower, the City shall consider the subordination request and may in its sole and absolute discretion decide whether to subordinate the Loan. If City agrees to subordinate the Loan the Parties shall cooperate to execute the subordination agreement and/or other instruments necessary to affect such subordination, (a) Parties acknowledge that City has the duty, pursuant to the DDA, to fund the reasonable actual costs to a maximum of $13 million dollars ($13,000,000.00) for the City Funded Improvements as that term is defined in the DDA. Nothing in this Section 4.6 or this Agreement shall prevent Borrower from notifying the City in writing that Borrower is waiving the right to the funding by the City of the reasonable actual costs to a maximum of $13 million dollars ($13,000,000.00) for the City Funded Improvement pursuant to the terms of'the DDA. Such waiver by Borrower shall have no effect on the duty of Borrower to construct the City Funded Improvements in accordance with the terms of the DDA, Borrower may issue the waiver at any time and shall have the option to (i) refinance and/or prepay the Public Improvement Loan at any time, as permitted by the Promissory Note, or (ii) obtain alternative financing prior to the funding of the Public Improvement Loan. Upon the occurrence of (i) or (ii) above, the Parties shall execute necessary documents to terminate this Agreement.. Section 4.7 Subdivision of the Property. The Property shall not be subdivided until such time as the City Funded Improvements have been paid in their entirety. ARTICLE 5 DEFAULT AND REMEDIES Section 5.1 Event of Default, Any material breach by Borrower of any covenant, agreement, provision or warranty contained in this Agreement or in any of the Loan Documents that remains. uncured upon the expiration of any applicable notice and 55394,00049\40984170.6 13