ORANGE HOUSING DEVELOPMENT CORPORATION AND C & C DEVELOPMENT (2)

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or may be insufficient to pay all Rehabilitation Costs that may be payable under this Agreement or otherwise in connection with the Rehabilitation, Developer shall, within ten (10) days after it receives written notice thereof from City of any of the foregoing matters, do one or more of the following: (a) provide satisfactory evidence to City that Developer has previously paid such excess or otherwise provided for such insufficiency (collectively, the "Excess Cost") with funds from a source other than the NSP Funds; (b) reallocate sufficient funds to pay the Excess Cost from funds allocated to "Contingency" in the Rehabilitation Budget; provided, however, that the City Manager's consent to any such reallocation shall be required; or (c) deposit an amount equal to the Excess Cost in anon-interest bearing account (the "Overrun Account") with City from which withdrawals may be made only with the consent of the City Manager but which will be exhausted prior to any further disbursement for any line item, so that any resulting surplus in any line item of the Rehabilitation Budget will then be reallocated to the line item(s) in which the Excess Costs are expected to be incurred. City shall have no obligation to make further disbursements until Developer has paid or otherwise provided for the overrun as required above. Amounts deposited by Developer in the Overrun Account for any Excess Costs shall be disbursed by City prior to the disbursement of any remaining Rehabilitation Portion proceeds. 405. Cost Savings. Upon completion of and disbursement for all matters covered by any line items in the Rehabilitation Budget, any remaining undisbursed amounts allocated to that line item shall be reallocated to "Contingency" and thereafter be available for disbursement in accordance with the terms of this Agreement. 406. Retainage. City will withhold a Retainage of 10% from each Disbursement for each of the Hard Cost line items of the Project Cost Breakdown (and other line items thereof designated for withholding of retainage) until all conditions to the final Disbursement of Hard Costs have been satisfied. In lieu of City's withholding Retainage, Developer can by written notice to City elect not to draw any overhead or profit as would otherwise be permitted under the Construction Contract until such time as Retainage would otherwise have been released. City shall not retain funds for building materials purchased by Developer for which Developer supplies documentation to City proving payment in full or for soft costs. 407. Holdback. The retainage otherwise available for disbursement shall be subject to a holdback of one hundred twenty-five percent (125%) of the estimated cost (as determined by the City Manager) for "punch-list" items. Such holdback will be released when all punch-list items have been completed to the satisfaction of City. 408. Waiver of Disbursement Conditions. Unless City otherwise agrees in writing, the making by City of any disbursement with knowledge that any condition to such disbursement is not fulfilled shall constitute a waiver of such condition only with respect to the particular