Reso 2022-063 Loan to Abode Communites for 72 Unit affordable housing dev

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expense and without further notice to Developer. In such event Developer shall be liable for and shall immediately reimburse City for such paid lien or stop notice. Alternatively, the City may require Developer to immediately deposit with City the amount necessary to satisfy such lien or claim pending resolution thereof. The City may use such deposit to satisfy any claim or lien that is adversely determined against Developer. Developer shall file a valid notice of cessation or notice of completion upon cessation of construction of the Improvements for a continuous period of thirty (30) days or more, and shall take all other reasonable steps to forestall the assertion of claims or liens against the Property or the Improvements. The City may (but has no obligation to) record any notices of completion or cessation of labor, or any other notice that the City deems necessary or desirable to protect its interest in the Property and the Improvements. 3.22 Performance and Payment Bond(s). (a) Prior to commencement of construction of the Project, Developer shall deliver to the City copies of payment bond(s) and performance bond(s) issued by a reputable insurance company licensed to do business in California, each in a penal sum of not less than one hundred percent (100%) of the scheduled cost of construction of the Project. (b) In lieu of such performance and payment bonds, Developer may submit evidence satisfactory to the City of the Developer's ability to commence and complete construction of the Project in the form of an irrevocable letter of credit, pledge of cash deposit, certificate of deposit, or other marketable securities held by a broker or other financial institution, with signature authority of the City required for any withdrawal, or a completion guaranty in a form and from a guarantor acceptable to City. Such evidence must be submitted in approvable form in sufficient time to allow the City to review and approve the information within prior to the scheduled construction start date. ARTICLE IV CITY FINANCIAL ASSISTANCE 4.1 Loan. Using funds from the City's Housing Asset Fund, the City shall provide a loan in the amount of One Million Six Hundred Thirty Five Thousand Forty Dollars ($1,635,040) (the "Loan") to Developer upon the terms and conditions and for the purposes set forth in this Agreement. The Loan shall be evidenced by a promissory note (the "Note") substantially in the form attached hereto as Exhibit D, and shall be secured by a deed of trust (the "Deed of Trust") executed by Developer as Trustor substantially in the form attached hereto as Exhibit E and recorded against the Property subordinate only to such liens as City shall approve in writing. The outstanding principal balance of the Note will accrue three percent (3%) simple annual interest commencing upon the date of disbursement. Provided that Developer has complied with all conditions precedent to disbursement of the Loan set forth in Section 4.5, the proceeds of the Loan ("Loan Proceeds") shall be disbursed 5055770.1 11