25F - AGMT - 605-611 EAST WASHINGTON ST LOAN

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correct copy thereof, and Executive Director shall have reasonably approved such General Contractor) as having the experience and financial resources (based on audited or unaudited financial statements submitted to Executive Director) necessary to construct and complete the Project. Developer shall submit to Agency and City evidence regarding each entity serving as a subcontractor for the construction of each portion of the Improvements, along with satisfactory evidence of necessary license(s), certification(s), bonding (with respect to the General Contractor's license bond required by the State of California) and insurance, all as required by this Agreement and as reasonably requested by Executive Director. Each Construction Contract (and all subcontracts) shall include the Section 3 Clause set forth in Section 309.2 hereof. The Construction Contract with the General Contractor shall be for a fixed, all-inclusive fee to complete all work to be performed by the General Contractor to construct the Improvements, subject to approved change orders. 601.5 Construction Security. Developer shall have obtained and shall have delivered to Agency and City an unconditional and irrevocable standby letter of credit in an amount equal to fifteen percent (15%) of the total the construction costs for the Project, as set forth in the Project Budget which is approved by Agency and City for the Project (collectively, "Performance Letter of Credit"), along with reasonably satisfactory evidence demonstrating the General Contractor's financial strength (such as the two most recent audited or unaudited financial statements of General Contractor) and reputation for quality and timely work and performance necessary to complete the Project in accordance with this Agreement. The Performance Letter of Credit shall be deposited with the Executive Director and shall be in full force and effect with Agency and City's unconditional and irrevocable right to draw on such instrument until thirty-five (35) days after the date of recordation of the notice of completion in the event Developer (or its General Contractor) ceases construction in violation of this Agreement or fails to complete construction of the Project in violation of this Agreement. In such event, Agency and City shall have the right to draw on the Performance Letter of Credit in its sole discretion, and have the sole and absolute right to determine whether the proceeds of the Performance Letter of Credit shall be used to pay for the completion of the Project. Agency and City will provide Developer with a copy of Agency's and City's (as Beneficiaries) signed and dated statement provided to the Lender pursuant to the Performance Letter of Credit effecting Agency's and City's draw on the Performance Letter of Credit, which copy will be transmitted to Developer on the same date that the statement is transmitted to the Lender. In lieu of the Performance Letter of Credit, Developer may propose providing Agency and City other forms of other and/or additional security addressing the completion of construction (such as payment and performance bonds covering one hundred percent (100%) of the Project), other bonds and sureties, guarantees and/or combinations of any of those, collectively referred to herein as "Alternate Security"), which Agency and City will approve and accept if the Executive Director determines in her sole, reasonable discretion that such Alternate Security will provide Agency and City a level of security that is substantially similar and equivalent to the Performance Letter of Credit. 601.6 Financing. The Agency shall have approved Developer's evidence of financing of the Improvements on the Property as provided in Section 311.1 and such financing shall be available for development of the Improvements or, to the extent said financing consists of a third party loan or loans, said loan or loans shall have closed and funded or be ready to close and fund concurrently with the Loans. 601.7 Final Project Budget and Construction Schedule. Developer shall have submitted to Agency/City and Agency/City shall have approved the final/updated Project Budget and updated construction schedule for the construction of Improvements. 25'127