Common use of Discretion to Encumber Clause in Contracts

Discretion to Encumber. This Agreement shall not prevent or limit Developer in any manner, at its sole discretion, from encumbering the Property or any portion of the Property or any improvement on the Property by any mortgage, deed of trust or other security device securing financing for the Property or its improvements. This Agreement shall be superior and senior to the lien of any mortgage. Nevertheless, no breach of this Agreement shall defeat, render invalid, diminish, or impair the lien of any mortgage made in good faith and for value. Any acquisition or acceptance of title or any right or interest in the Property or part of the Property by a mortgagee (whether due to foreclosure, trustee’s sale, deed in lieu of foreclosure, lease termination, or otherwise) shall be subject to all of the terms and conditions of this Agreement. Any mortgagee who takes title to the Property or any part of the Property shall be entitled to the benefits arising under this Agreement. Notwithstanding the provisions of this Section, a mortgagee will not have any obligation or duty under the terms of this Agreement to perform the obligations of Developer or other affirmative covenants of Developer, or to guarantee this performance except that: (i) the mortgagee shall have no right to develop the Project under the Applicable Rules without fully complying with the terms of this Agreement; and (ii) to the extent that any covenant to be performed by Developer is a condition to the performance of a covenant by City, that performance shall continue to be a condition precedent to City’s performance. Each mortgagee shall, upon written request to City, be entitled to receive written notice from City of: (i) the results of the periodic review of compliance specified in Section 5 of this Agreement, and (ii) any default by Developer of its obligations set forth in this Agreement. Each mortgagee shall have a further right, but not an obligation, to cure the default within forty-five (45) days after receiving a Notice of Default. If the mortgagee can only remedy or cure a non-monetary default by obtaining possession of the Property, then the mortgagee shall have the right to seek to obtain possession with diligence and continuity through a receiver or otherwise, and to remedy or cure the non-monetary default within sixty (60) days after obtaining possession and, except in case of emergency or to protect the public health or safety, City may not exercise any of its judicial remedies set forth in this Agreement to terminate or substantially alter the rights of the mortgagee until expiration of the sixty (60)-day period. In the case of a non-monetary default that cannot with diligence be remedied or cured within sixty (60) days, the mortgagee shall have additional time as is reasonably necessary to remedy or cure the default, provided the mortgagee promptly commences to cure the non-monetary default within sixty (60) days and diligently prosecutes the cure to completion.

Discretion to Encumber. This Agreement shall not prevent or limit Developer in any manner, at its sole discretion, from encumbering the Property or any portion of the Property or any improvement on the Property by any mortgage, deed of trust or other security device securing financing for the Property or its improvements. This Agreement shall be superior and senior to the lien of any mortgage. Nevertheless, no breach of this Agreement shall defeat, render invalid, diminish, or impair the lien of any mortgage made in good faith and for value. Any acquisition or acceptance of title or any right or interest in the Property or part of the Property by a mortgagee (whether due to foreclosure, trustee’s sale, deed in lieu of foreclosure, lease termination, or otherwise) shall be subject to all of the terms and conditions of this Agreement. Any mortgagee who takes title to the Property or any part of the Property shall be entitled to the benefits arising under this Agreement. Notwithstanding the provisions of this Section, a mortgagee will not have any obligation or duty under the terms of this Agreement to perform the obligations of Developer or other affirmative covenants of Developer, or to guarantee this performance except that: (i) the mortgagee shall have no right to develop the Project under the Applicable Rules without fully complying with the terms of this Agreement; and (ii) to the extent that any covenant to be performed by Developer is a condition to the performance of a covenant by City, that performance shall continue to be a condition precedent to City’s performance. Each mortgagee shall, upon written request to City, be entitled to receive written notice from City of: : (i) the results of the periodic review of compliance specified in Section 5 of this Agreement, and (ii) any default by Developer of its obligations set forth in this Agreement. Each mortgagee shall have a further right, but not an obligation, to cure the default within forty-five (45) days after receiving a Notice of Default. If the mortgagee can only remedy or cure a non-monetary default by obtaining possession of the Property, then the mortgagee shall have the right to seek to obtain possession with diligence and continuity through a receiver or otherwise, and to remedy or cure the non-monetary default within sixty (60) days after obtaining possession and, except in case of emergency or to protect the public health or safety, City may not exercise any of its judicial remedies set forth in this Agreement to terminate or substantially alter the rights of the mortgagee until expiration of the sixty (60)-day period. In the case of a non-monetary default that cannot with diligence be remedied or cured within sixty (60) days, the mortgagee shall have additional time as is reasonably necessary to remedy or cure the default, provided the mortgagee promptly commences to cure the non-monetary default within sixty (60) days and diligently prosecutes the cure to completion.