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EXHIBIT 2 <br />(m) Developer shall have provided construction security, as set forth in Section <br />8.7, in favor of the City, which may include a completion guarantee from Developer and/or a letter <br />of credit and/or performance and payment bonds from the general contractor for the Project (or <br />some combination of these), in an amount sufficient to ensure the Project will be completed and <br />placed in service within the time set forth in the Project schedule approved by the City. <br />(n) Developer shall have established a separate account for deposit of all <br />proceeds from the Inclusionary Grant (the "Project Account"). <br />4.2 Final Disbursement Conditions Precedent. City's obligation to make the Final <br />Disbursement to Developer is subject to the satisfaction of the following additional conditions <br />precedent: <br />(a) Construction complete. The construction of the Project shall be complete. <br />(b) Certificate of Occupancy Issued. Any portion of the construction work <br />requiring inspection or certification by any Governmental Authority shall have been inspected and <br />certified as complete. Developer shall request that the City of Santa Ana Planning and Building <br />Agency issue a Certificate of Occupancy, or similar document as applicable, a copy of which shall <br />be delivered to the City Project Manager, in order for the Final Disbursement to occur. <br />(c) The conditions set forth in the Regulatory Agreement regarding homebuyers <br />shall have been satisfied, including but not limited to homebuyers must have executed Loan <br />Documents, as defined in the Regulatory Agreement, with the City and have closed escrow on an <br />Affordable Unit. The Loan Documents must be recorded on each Affordable Unit in second lien <br />position to a first deed of trust from a private institutional lender. <br />(d) Lien Free. At least one of the following shall have occurred: <br />(i) Thirty-five (35) days shall have passed since the recording of a valid <br />Notice of Completion as required by Section 8.5 for the construction, and no mechanic's or <br />materialman's lien shall be outstanding; or <br />(ii) Ninety-five (95) days shall have passed since actual completion of <br />the construction, and no mechanic's or materialman's lien shall be outstanding, or Developer shall <br />have bonded over any such lien to City's reasonable satisfaction. <br />4.3 Disbursement Procedures for Grant. The Inclusionary Grant proceeds shall be <br />disbursed to Developer to finance the development and construction of the Project (as evidenced <br />in the Project Budget, attached as Exhibit Q. Upon satisfaction of the required conditions for the <br />Initial Disbursement or the Final Disbursement, as applicable, the City shall disburse the <br />Inclusionary Grant within twenty one (21) days. The Inclusionary Grant proceeds shall not be <br />used for any purpose other than for development and construction costs set forth in the Project <br />Budget, including Developer fee and soft costs related to the development of the Project. City <br />may make any disbursement by check or wire transfer payable to Developer. <br />5 53 94.0010 1 \42414134.1 <br />