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of the lease. Any funds collected as security deposits shall be <br />kept separate and apart from all other funds of the Development in <br />a trust account with a depository insured by the Federal Deposit <br />Insurance Corporation or the Federal Savings and Loan Insurance <br />Corporation, and shall be held and disbursed in accordance with <br />California law. The balance of such account shall at all times <br />equal or exceed the aggregate of all outstanding obligations under <br />said account, plus accrued interest thereon. If interest is <br />earned on such trust account, such interest shall become part of <br />such security deposits comprising the account. <br />(f) Incur any liability or obligation in connection <br />with the Development, contingent or otherwise, other than for <br />current operating Expenses and for the indebtedness evidenced by <br />the Note, or incur any liability or obligation whatsoever that is <br />secured in whole or in part by any interest in or lien or <br />encumbrance on the Development. <br />(g) Invest any funds from the Development in any <br />property, whether real, personal or mixed, except as authorized by <br />this Agreement or the Agency, or deposit any such funds in a <br />depository not authorized by this Agreement or approved by the <br />Agency; or <br />(h) Loan any funds from the Development to any person <br />or entity; or <br />(i) Fail to establish or maintain the accounts required <br />by Section 6 of this Agreement. <br />13. Distribution. <br />In no event shall any Distribution be made, received or <br />retained by the Borrower or any other person or entity without the <br />prior written approval of the Agency. <br />The Agency shall make an annual review of the <br />Development Financial Report and determine whether a Distribution <br />should be approved. The Agency may also approve a Distribution at <br />any other time, if appropriate. <br />The Agency shall not unreasonably withhold its approval <br />of a Distribution request. Notwithstanding the foregoing, the <br />Agency shall not be required to approve Distributions to be made <br />from borrowed funds, or to be made while there is any violation or <br />default under the terms of this Agreement or any of the other Loan <br />Documents. <br />The proceeds of any unapproved Distribution, while <br />retained, shall be held by the recipient as trustee for the <br />Development and shall be immediately refunded to the Development. <br />the recipient of an unapproved Distribution shall be obligated to <br />CHFA 53SLP /RIDGEVIEW <br />12/2/88 <br />V01517(DNB) <br />-12- <br />