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EXHIBIT 2 <br /> (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 /> (1) 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. 1 <br /> a <br /> (a) Initial Disbursement. City's obligation to make the Initial Disbursement <br /> is subject to satisfaction of the following conditions precedent: <br /> i <br /> 1 <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 /> i <br /> complete. - <br /> I <br /> I <br /> I <br />