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rehabilitation, this section will apply. In the event that NSP Funds will be used for construction <br />related expenses, Developer must also comply with the labor and Davis -Bacon regulations as set <br />forth in Section 703 hereof. The documents referenced in this Section 400 (Payment Request, <br />Release of Retention Funds, Notice of Completion) are attached hereto and incorporated herein <br />as Exhibit D. <br />402. Disbursement Requests. The Rehabilitation Portion proceeds shall be disbursed <br />on a line -item by line -item basis in accordance with the Rehabilitation Budget and subject to the <br />conditions in this section. In no event shall City have any obligation to disburse any amount for <br />any item in excess of the amount allocated to such item in the Rehabilitation Budget. <br />Disbursements shall be made only upon Developer's written request in the form of a <br />Disbursement Request showing all costs which Developer intends to fund with such <br />disbursement, itemized in such detail as City may reasonably require, accompanied in each case <br />by (a) invoices and lien releases satisfactory to City, including in any event partial lien releases <br />executed by each contractor and subcontractor who has received any payment for work <br />performed, and (b ) all other documents and information reasonably required by City. <br />Disbursement Requests shall be submitted no less than ten (10) Business Days prior to the date <br />of the requested disbursement, and shall not be submitted more often than monthly. <br />Prior to each disbursement by City of proceeds of the NSP Funds, Developer shall deliver to City <br />and to Bank a draw request ("Draw Request"), and all required supporting information as set <br />forth in this Agreement or as otherwise reasonably required by City or Bank in order to provide <br />information for evaluating the requested disbursement pursuant to customary construction <br />lending practices of institutional lenders in Southern California. <br />City and Bank shall notify the other and Developer of approval or disapproval of each Draw <br />Request within five (5) business days after receipt of the Draw Request, using the Bank's <br />"Disbursement/Change Order Approval Notice". City and Bank shall have the right, but not the <br />obligation, to discontinue processing Draw Requests unless and until receipt of notification from <br />the other of approval or disapproval of each outstanding Draw Request. <br />403. Manner of Disbursement. City may make any disbursement by check payable to <br />Developer; or on a voucher basis; or by check payable jointly to Developer and any contractor, <br />subcontractor or other claimant; or directly to any such claimant; or by any other means <br />reasonably selected by City. <br />404. Cost Overruns. In the event that, at any time and for any reason, (a) the actual cost <br />reasonably estimated by City or Developer to be required to complete all matters included in any <br />line item in the Rehabilitation Budget exceeds the amount allocated to that line item in the <br />Rehabilitation Budget, (b) Rehabilitation Costs for any matters not covered by a specific line <br />item have been or will be incurred, or (c) the undisbursed portion of the Rehabilitation Portion is <br />or may be insufficient to pay all Rehabilitation Costs that may be payable under this Agreement <br />or otherwise in connection with the Rehabilitation, Developer shall, within ten (10) days after it <br />receives written notice thereof from City of any of the foregoing matters, do one or more of the <br />following: <br />7 <br />