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Community Development Partners June 20, 2017 Page 3 4. Compliance with California Health and Safety Code and applicable regulations set forth in Section 34176. Compliance with and completion of an environmental review of the Project pursuant to the California Environmental Quality Act ("CEQA") and approval thereof. 6. The City/Agency Loan Agreements shall provide that each of the following conditions shall be met prior to the disbursement of any portion of the Loans: a. All grading permits shall have been issued and the City shall have issued a letter stating that building permits are ready to issue, subject only to payment of fees and the completion of grading of the Project site. b. Developer shall have secured all necessary financing and finding for the construction and operation of the Project. Such financing and funding shall be sufficient to pay all Project development costs, through lease -up, as set forth in a final budget consistent with the approved Proforma (or as otherwise approved by the City/Agency). C. The Developer shall have provided evidence to the City/Agency that the Developer has obtained insurance policies and certificates or endorsements acceptable to the City/Agency, as described in the Loan Agreements. d. The Developer shall have provided construction security in favor of the City/Agency, which may include a completion guarantee from Community Development Partners and/or a letter of credit and/or performance & payment bonds from the general contractor for the Project (or some combination of these), in an amount sufficient to ensure the Project will be completed and placed in service within the time set forth in the Project schedule approved by the City/Agency. e. Developer shall submit and obtain the City Manager / Executive Director of the Housing Authority's approval of the construction contract, Developer's limited partnership agreement for the limited partnership entity to be formed to own and operate the Project, and management, marketing and tenant selection plans for the Project. The City/Agency's obligation to provide the Loans is and shall remain subject to all covenants, conditions, and restrictions set forth in the Loan Agreements, and in particular City/Agency's analysis of the available funding sources and development and operating costs of the Project and the overall economic feasibility of the Project. This conditional pre -commitment letter for the Project will expire two (2) years from issuance of the letter to the Developer. The Developer, City and the Agency agree in the Loan Agreements that the provision of any funds to the Project is and shall be conditioned on the City/Agency's determination to proceed with, modify or cancel the City/Agency Assistance based on the results of a subsequent CEQA environmental review and the outcome of a Subsidy Layering Review. FOODIX46F