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Prior to commencement of Project construction, Developer will make an initial application for Federal Home Loan Bank Affordable Housing Program ( "AHP ") funding for the Project, and will re -apply before or alter corn mencernent of construction of the Project if Developer does not receive an award from the first application. 3.7.1 Prop. 1 C Transit Oriented Development Grant Funds. Pursuant to the Transit Oriented Development Housing Grant Program, established pursuant to Part 13 of Division 31 of the Health & Safety Code, commencing with Section 53560 (the "TOD Grant Program "), the State Department of Housing and Community Development ( "HCD") has agreed to provide a grant in the amount of up to $10,320,000 (the "TOD Grant ") jointly to BRIDGE Housing Corporation, a California nonprofit public benefit corporation ( "BRIDGE ") and City to finance the cost of certain capital improvements required for the Project. Developer pledges to comply with all requirements associated with the receipt and use of the TOD Grant and applicable to Developer or the Project, including without limitation, all terms and conditions set forth in that certain Standard Agreement executed or to be executed by and between HCD and City, the Disbursement Agreement to be executed by and among HCD, BRIDGE and City, and all other documents that HCD requires in connection therewith (collectively, the "HCD Documents "). If requested by Developer, City agrees to loan the TOD Grant funds to Developer pursuant to loan documents approved by HCD if required. Developer agrees to indemnify, defend (with counsel approved by City) and hold the Indemnitees harmless from and against any and all Claims arising in connection with any breach of any term or condition of the HCD Documents by Developer or any affiliate of Developer or any contractor, subcontractor, agent or employee of Developer or any affiliate of Developer. Developer's indemnification obligations under this Section 3.7.1 shall not extend to Claims resulting solely from the gross negligence or willful misconduct of Indemnitees. The provisions of this Section 3.7.1 shall survive the issuance of a Certificate of Completion for the Project and the expiration or earlier termination of this Agreement and /or the HCD Documents. It is further agreed that City does not and shall not waive any rights against Developer that it may have by reason of this indemnity and hold harmless agreement because of the acceptance by City, or the deposit with City by Developer, of any of the insurance policies described in this Agreement. 3.8 Development Schedule. Developer shall commence and complete construction of the Project and shall satisfy all other obligations of Developer under this Agreement within the time periods set forth herein, as such time periods may be extended upon the mutual written consent of the Parties. Subject to force majeure, the availability of financing, and the City's issuance of permits and approvals, Developer shall commence construction of the Project not later than thirty (30) months following the Effective Date. Developer shall commence construction work on the Project following issuance of building permits within the time periods allowable under such permits, and Developer shall diligently prosecute to completion the construction of the Project in order to allow City to issue a final certificate of occupancy within twenty -four (24) months following commencement of construction work and in no event later than fifty -four (54) months following the Effective Date. If Developer demonstrates a good faith effort to secure financing for the Project, but is unable to do so, the City may determine in its reasonable discretion that the time period for commencement of construction set forth in this Section 3.8 shall be extended by eighteen (18) months. Subject to force majeure, the availability 1865087.6 11