05 052013 JT CC-HA DEPOT AT SANTIAGO EX 2

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(b) Title Insurance. City shall have received an LP-10 ALTA Lender loan policy of title insurance (1970 edition), or evidence of a commitment therefore satisfactory to City, issued by First American Title Insurance Company and in form and substance satisfactory to City, together with all endorsements and binders required, naming City as the insured, in a policy amount of not less than the total City Loan Amount, showing Developer as the fee owner of the Property and insuring the City Deed of Trust to be a valid priority lien on the Property. The City Promissory Note and Deed of Trust shall be subordinate to the Senior Loan Note and Senior Loan Deed of Trust. (c) Affordability Restrictions on Transfer of Property. Developer shall have delivered to the Escrow Holder, in the form attached hereto as Exhibit B, the Affordability Restrictions on Transfer of Property pursuant to which, among other things, Developer agrees that the Property shall be used only for decent, safe, sanitary and affordable rental housing pursuant to the affordability requirements of Code of Federal Regulations ("CFR") section 92.252 or 92.254 and California Health and Safety Code ("H&S") sections 50052.5 and 33334.3, as applicable. (d) Documents Recorded. This Loan Agreement, the City Deed of Trust and the Affordability Restrictions on Transfer of Property shall have been recorded in the Official Records of the County. (e) Request for Notice. For the benefit of City, Escrow Holder shall have recorded a request for notice of default of the Senior Loan (the "Request for Notice of Default") (fj Insurance. City shall have received evidence satisfactory to the City Attorney that all of the policies of insurance required by Section 19 of this Agreement are in full force and effect. (g) Representations and Warranties. The representations and warranties of Developer contained in this Agreement and the other Loan Documents shall be correct as of the Close of Escrow as though made on and as of that date, and if requested by the City Project Manager, City shall have received a certificate to that effect signed by Developer's Representative. (h) No Default. No Event of Default by Developer shall have occurred, and no event shall have occurred which, with the giving of notice or the passage of time or both, would constitute an Event of Default by Developer under this Agreement, and if requested by the City Project Manager, City shall have received a certificate to that effect signed by Developer's Representative. 6.2 Disbursement Procedures for Loan(s). The Loan proceeds shall be disbursed through Escrow to finance the construction of the Project (as evidenced in Exhibit E). The Loan proceeds shall not be used for any purpose other than for acquisition and construction related costs, including Developer fee and soft costs related to the development of the Project (costs all subject to City's prior review). 9 1076\O1\1333668.1