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(k)Representations and Warranties. The representations and warranties of <br />Grantee contained in this Agreement shall be correct in all material respects as of the date of the <br />disbursement as though made on and as of that date. <br />(l)The City's obligation to provide the HHAP Grant is and shall remain <br />subject to all covenants, conditions, and restrictions set forth in this Agreement, including the <br />State HHAP Agreement, and the City's analysis of the available funding sources, rehabilitation <br />and operating costs of the Project, and the overall economic feasibility of the Project. <br />4.2 Disbursement Procedures for Grant; Conditions for Initial and Final <br />Disbursement. The HHAP Grant proceeds shall be disbursed to Grantee to finance the the <br />Project (as evidenced in the Project Budget, attached as Exhibit C) in accordance with the State <br />HHAP Agreement.The HHAP Grant proceeds shall not be used for any purpose other than for <br />costs set forth in the Project Budget, including Grantee fee and soft costs related to the the <br />Project. <br />(a)Initial Disbursement. City's obligation to make the Initial Disbursement <br />is subject to satisfaction of the following conditions precedent: <br />(i)The Project has received all required entitlements and <br />discretionary actions to commence construction. <br />(ii)All grading permits shall have been issued or the City shall have <br />issued a letter stating that Building Permits are ready to issue, subject only to payment of fees <br />and the completion of grading of the Project site. <br />(iii)Grantee shall have secured all necessary financing and funding for <br />the construction and operation of the Project. Such financing and funding shall be sufficient to <br />pay all Project costs, as set forth in the Project Budget consistent with the approved Proforma (or <br />as otherwise approved by the City), and must comply with the City’s Affordable Housing Funds <br />Policies and Procedures. <br />(iv)Grantee shall have provided evidence to the City that the Grantee <br />has obtained insurance policies and certificates or endorsements acceptable to the City, as <br />described in this Agreement. <br />(v)Grantee shall have provided construction security in favor of the City, <br />which may include a completion guarantee from Grantee and/or a letter of credit and/or performance <br />and payment bonds from the general contractor for the Project (or some combination of these), in an <br />amount sufficient to ensure the Project will be completed and placed in service within the time set <br />forth in the Project schedule approved by the City. <br />(b)Final Disbursement. City's obligation to make the Final Disbursement to <br />Grantee is subject to the satisfaction of the following additional conditions precedent: <br />(i)Construction complete. The construction of the Project shall be <br />complete. <br />EXHIBIT 2