Common use of Failure of Holder to Complete a Component Clause in Contracts

Failure of Holder to Complete a Component. In any case where, thirty (30) days after the holder of any mortgage or deed of trust creating a lien or encumbrance upon the Site or any part thereof receives a notice from City of a Default by the Developer in completion of construction of the Applicable Component under this Agreement, and such holder is not vested with ownership of the applicable portion of the Site and has not exercised the option to construct as set forth in Section 311, or if it has exercised the option but has defaulted hereunder and failed to timely cure such default, the City may (but shall not be obligated to) purchase the mortgage or deed of trust by payment to the holder of the amount of the unpaid mortgage or deed of trust debt, including principal and interest and all other sums secured by the mortgage or deed of trust. If the ownership of the Site or any part thereof has vested in the holder, the City, if it so desires, shall be entitled to a conveyance from the holder to the City of so much of the Site as has vested in such holder upon payment to the holder of an amount equal to the sum of the following: (a) The unpaid mortgage or deed of trust debt at the time title became vested in the holder (less all appropriate credits, including those resulting from collection and application of rentals and other income received during foreclosure proceedings); (b) All expenses with respect to foreclosure including reasonable attorneys’ fees; (c) The net expense, if any, incurred by the holder as a direct result of the subsequent management of the Applicable Component or part thereof; (d) The costs of any improvements made by such holder; (e) An amount equivalent to the interest that would have accrued at the rate(s) specified in the holder’s loan documents on the aggregate of such amounts had all such amounts become part of the mortgage or deed of trust debt and such debt had continued in existence to the date of payment by the City; (f) Any prepayment charges imposed by the lender pursuant to its loan documents and agreed to by the Developer; and (g) Any or all other amounts, costs and/or expenses payable to the holder under the holder’s loan documents approved pursuant to Section 311.1 above. The City’s right to such conveyance shall expire if: (i) City fails to notify the holder in writing within thirty (30) days after City receives written notice from the holder that such holder has obtained ownership of the Applicable Component, or (ii) within sixty (60) days after the City receives written notice from the holder that such holder has obtained ownership of the Applicable Component (or portion thereof), the City nevertheless fails to tender full payment for the Applicable Component. All of the foregoing rights and protections of the holder as set forth in this Section 311.5 shall also apply and be available to any Developer (other than an entity in which any interest is held by the Developer, or a Related Entity) pursuant to foreclosure or deed in lieu of foreclosure of the mortgage or deed of trust.