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EXHIBIT 2 <br />and agrees that the Regulatory Agreement shall have priority over, and shall not be subordinated <br />to, any Senior Loan. <br />7.17 Use of Project Account. The Project Account shall be used exclusively for the <br />deposit of proceeds from the Inclusionary Grant and to pay expenses for the Project in accordance <br />with the Project Budget. No other funds shall be deposited into the Project Account. <br />8. CONDITIONS FOR CONSTRUCTION <br />8.1 Permits and Approvals. Developer shall diligently obtain all permits, including <br />all Building Permits, licenses, approvals, exemptions and other authorizations of Governmental <br />Agencies required in connection with the construction and conversion of the Property. Developer <br />shall follow industry -standard, best management practices, as applicable, during construction. <br />8.2 Commencement and Completion of Construction. The construction of the <br />Project shall be considered complete for purposes of this Agreement only when (a) all work <br />described has been completed and fully paid for, and (b) all work requiring inspection or <br />certification by Governmental Authority has been completed and all requisite certificates, <br />approvals and other necessary authorizations (including required final certificates of occupancy) <br />have been obtained. <br />8.3 Entry and Inspection. At all times prior to completion of the construction, upon <br />reasonable prior written notice and subject to reasonable job site safety rules, City and its agents <br />shall have (a) the right of free access to the Property and all sites away from the Property where <br />materials for the construction are stored, (b) the right to inspect all labor performed and materials <br />furnished for the construction, and (c) the right to inspect and copy all documents pertaining to <br />the construction. <br />8.4 Construction Information. From time to time, as needed, during the course of the <br />construction, within ten (10) Business Days following City's written demand therefore, Developer <br />shall furnish requested reports of Project Costs, progress schedules and contractors' costs <br />breakdowns for the construction, itemized as to trade description and item, showing the name of <br />the contractor(s) and/or subcontractor(s), and including such indirect costs as real estate taxes, <br />legal and accounting fees, insurance, architects' and engineers' fees, loan fees, interest during <br />construction and contractors' overhead. <br />8.5 Protection Against Liens: Developer shall diligently file a valid Notice of <br />Completion upon completion of the construction, diligently file a notice of cessation in the event of <br />a cessation of labor on the construction for a period of thirty (30) days or more, and take all actions <br />reasonably required to prevent the assertion of claims of lien against the Property. In the event that <br />any claim of lien is asserted against the property or any stop notice or claim is asserted against the <br />City by any person furnishing labor or materials to the Property, Developer shall immediately give <br />written notice of the same to City and shall, promptly and in any event within ten (10) Business <br />Days after written demand therefor, (a) pay and discharge the same, (b) effect the release thereof <br />by delivering to City a surety bond complying with the requirement of applicable laws for such <br />13 <br />5 53 94.0010 1 \42414134.1 <br />