CHFA LOAN CLOSING - Laserfiche WebLink

1. The sum of Two million and no /100th Dollars ($2,000,000.00), in the form of cash, has been deposited with the Depository, and the Depository acknowledges receipt of the same. 2. Depository shall hold these funds and any partial or full disbursement of the funds shall be made only at the express written direction of CHFA. The Depository shall act solely at all times on written instructions from CHFA with respect to the sum deposited hereunder. During the term of this Agreement, CHFA will have the exclusive right to make, from time to time, partial withdraws or a full withdraw of the funds deposited hereunder for the purposes set forth in paragraph 4 below. 3. Interest on the funds deposited hereunder shall be paid by the Depository in accordance with the terms of the account. Any interest paid on the account shall not be added to the principal amount originally deposited but shall be paid directly to the Depositor. 4. (a) The funds deposited hereunder shall be held until such time as two (2) full consecutive Development fiscal years have passed in which the audited annual financial statement accepted by the CHFA shows that Gross Income is sufficient to meet all Operating Expenses. The Owner or the City may, from time to time, request CHFA to reduce the amount required to be held hereunder and release to the Depositor a portion of the amount held by the Depository notwithstanding the term of the deposit initially contemplated by the parties as set forth the preceeding sentence. (b) CHFA may withdraw on all or part of the $2,000,000.00 for the following purposes: (i) to pay for nonconstruction expenses necessary to make the Project operational, including, without limitation, advertising expenses, office expenses, marketing staff payroll, model apartment and common area furniture, maintenance tools and equipment, first -year hazard insurance premiums and estimated property tax impounds; (ii) to pay any Operating Expenses which exceed the amounts available from Gross Income and other available funds; and (iii) as security for construction defects but only in an amount equal to $283,500.00, which is two and one -half percent (2-1/2%) of the construction contract. The term "construction defect ", as used herein, shall mean all construction related problems including, but not limited to, deviations from the approved final plans and specifications for the Project. This security shall be kept available for construction defects which are discovered within twelve (12) months following the final completion of the Project and may be used for the correction of such construction defects or related damages which are not corrected by the contractor or the Owner within a reasonable time following the demand by the Agency for such correction. (c) Upon the withdrawal or release of the $2,000,000.00 deposit pursuant to subparagraph 4(a) or (b) above, this Agreement shall terminate and have no further force and effect. (d) All capitalized terms in this paragraph 4 shall have the meanings set forth in the Regulatory Agreement. 20c:CHFASRA.RVC 2 (1/8/90)