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that line item in the Project Budget, (b) rehabilitation costs for any matters not covered by <br />a specific line item have been or will be incurred, or (c) the undisbursed portion of the <br />rehabilitation portion is or may be insufficient to pay all rehabilitation costs that may be <br />payable under the City/HOME Loan Documents or otherwise in connection with the <br />rehabilitation, Developer shall, within ten (10) days after it receives written notice thereof <br />from City of any of the foregoing matters, do one or more of the following: <br />(a) provide satisfactory evidence to City that Developer has <br />previously paid such excess or otherwise provided for such insufficiency (collectively, <br />the "Excess Cost") with funds from a source other than the City/HOME Loan; <br />(b) reallocate sufficient funds to pay the Excess Cost from funds <br />allocated to "Contingency" in the Project Budget; provided, however, that the <br />Executive Director's consent to any such reallocation shall be required; or <br />(c) deposit an amount equal to the Excess Cost in a non-interest <br />bearing account (the "Overrun Account") with City from which withdrawals may be <br />made only with the consent of the Executive Director but which will be exhausted prior <br />to any further disbursement for any line item, so that any resulting surplus in any line <br />item of the Project Budget will then be reallocated to the line item(s) in which the Excess <br />Costs are expected to be incurred. <br />City shall have no obligation to make further disbursements until Developer has paid or <br />otherwise provided for the overrun as required above. Amounts deposited by Developer <br />in the Overrun Account for any Excess Costs shall be disbursed by City prior to the <br />disbursement of any remaining rehabilitation portion proceeds in the manner described in <br />subsection 9.3(c). <br />6.11 Cost Savings. Upon completion of and disbursement for all matters covered by <br />any line items in the Project Budget, any remaining undisbursed amounts allocated to that <br />line item shall be reallocated to "Contingency" and thereafter be available for <br />disbursement in accordance with the terms of this Agreement. <br />6.12 Retainage. City will withhold a Retainage of 10% from each Disbursement <br />for each of the hard cost line items of the project cost breakdown (and other line items <br />thereof designated for withholding of retainage) until all conditions to the final <br />disbursement of hard costs have been satisfied. In lieu of City's withholding Retainage, <br />Developer can by written notice to City elect not to draw any overhead or profit as would <br />otherwise be permitted under the Construction Contract until such time as Retainage <br />would otherwise have been released. <br />City shall not retain funds for building materials purchased by Developer for which <br />Developer supplies documentation to City proving payment in full or for soft costs. <br />6.12.1 Holdback. The retainage otherwise available for disbursement <br />shall be subject to a holdback of one hundred twenty-five percent (125%) of the <br />estimated cost (as determined by the Executive Director) for "punch -list" items. Such <br />12 <br />