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On the Closing Date, proceeds of the sale of the Bonds (including without limitation, premium, if
any, and interest accrued thereon) in the amount of $24,000,000* shall be deposited by the Trustee to the
Project Fund. In addition, the Trustee shall cause, from proceeds of the Underwriter’s Advance, the Initial
Deposit to be deposited to the Interest Account of the Bond Fund.
Application of Loan Payments
So long as there are any Outstanding Bonds, any payments made by the Borrower pursuant to the
Promissory Note and the Loan Agreement shall be paid on each Loan Payment Date directly to the Trustee
and deposited into the Bond Fund, to be used to pay the interest and principal (if any) on the Bonds on the
next succeeding Interest Payment Date; provided that so long as there are amounts available therefor, for
purposes of paying interest on the Loan when due the Trustee shall debit the Interest Account in the amount
of interest due on the Bonds on each Interest Payment Date and transfer the same to the Bond Fund to pay
interest due on the Bonds on each Interest Payment Date; and provided further that so long as there are
amounts available therefor, for purposes of making principal payments on the Loan when due the Trustee
shall debit the Collateral Fund and transfer the same to the Bond Fund to pay the principal of the Bonds on
the date set for redemption of the Bonds or payment of the Bonds on the Maturity Date.
Disbursements from the Project Fund
(a) Requisitions. Subject to the provisions described in this paragraph (a) and paragraph (b)
below, the Trustee shall make disbursements from the Project Fund to pay Project Costs only upon the
receipt of a written request of the Borrower in accordance with the Disbursing Agreement, the Loan
Agreement, and the Indenture substantially in the form attached as an exhibit to the Loan Agreement (a
“Disbursement Request”).
(b) Project Fund. When the Trustee receives a Disbursement Request for a disbursement from
the Project Fund in accordance with the provisions described in paragraph (a) above, “APPENDIX D –
SUMMARY OF CERTAIN PROVISIONS OF THE LOAN AGREEMENT – Disbursements from the
Project Fund,” “—FHA Lender Funds” attached hereto, and the Disbursing Agreement, subject to the
following paragraph, the Trustee shall confirm that Available Money equal to or greater than the sum of
(1) the amount set forth in the Disbursement Request and (2) all prior disbursements made, is on deposit in
the Collateral Fund and is at least equal to the then Outstanding principal amount of the Bonds. Upon
confirmation of the items above, the Trustee shall thereafter disburse the funds from the Project Fund to
pay Project Costs in the requested amount pursuant to the Disbursement Request directly to (i) the FHA
Lender, or at the direction of the FHA Lender as provided in “APPENDIX D – SUMMARY OF CERTAIN
PROVISIONS OF THE LOAN AGREEMENT – FHA Lender Funds” attached hereto, to the extent the
corresponding deposit of Available Money to the Collateral Fund was made by or at the direction of the
FHA Lender (as confirmed in the Disbursement Request) or (ii) the Borrower (or any other party designated
in the Disbursement Request) to the extent the corresponding deposit of Available Money to the Collateral
Fund was made by or at the direction of the Borrower or such other party. Any interest earnings on the
Project Fund shall be credited to the Interest Account of the Bond Fund.
Pursuant to the provisions described under the caption “Collateral Fund” below, there shall be
deposited in the Collateral Fund Available Money in such amounts as may be necessary to allow the Trustee
to disburse funds from the Project Fund upon the Trustee’s receipt of a Disbursement Request from the
Borrower to pay Project Costs.
* Preliminary; subject to change.
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