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Revised July 7, 1997 amount of the Developer Improvements completed to the date of such certification, and the dollar amount of the disbursement necessary to pay for the certified Developer Improvements. 3. APPROVED BY CITY. After receipt of the certification by the City Engineer, the City shall give written notice to the Developer and the Lender whether the City approves or rejects the Developer Improvements relating to such certification. The City will use its best efforts to notify the Developer and Lender within ten (10) business days after receipt of such certification by the City Engineer. 4. DISBURSEMENT AND RETAINAGE. If the City approves a certification of the Developer Improvements in writing, the Lender may rely upon such approval and, if so instructed by the City, advance no more than Ninety -Five percent (95 %) of the sum certified by the City Engineer for the Developer Improvements. Five percent (5 %) of all certified sums of the Developer Improvements ( "Retainage ") may be retained until the fmal inspection by the City. The RETAINAGE shall be disbursed after the City completes its final inspection, accepts all Developer Improvements and the Developer provides the necessary maintenance bond to the City. If the City rejects any item of Developer Improvements in the certification, the Lender shall not advance any funds relating to that item of the Developer Improvements until the City has given its written consent. Certifications not relating to Developer Improvements as referenced in the Development Agreement shall not require the 5% RETAINAGE referenced in this paragraph. 5. FINAL INSPECTION BY THE CITY. Pursuant to the Development Agreement, the City Engineer shall make a fmal inspection of the Developer Improvements and may object to any construction defects discovered during this inspection regardless of when such defects occurred. The failure of the City to object to a prior certification shall not be deemed as a waiver of the City's right to demand correction of any construction defects discovered during the final inspection. 6. DEFAULT BY DEVELOPER, RIGHT TO CURE. If the Developer commits an event of default upon its obligations as imposed by this Agreement, or pursuant to the Note and Mortgage executed by the Developer, or as defined with the Development Agreement with the City and does not cure the default within the time therein described, the City may give the Developer notice of the City's intention to terminate the private installation of the Developer Improvements and the City may proceed to let contracts to complete the Developer Improvements. The costs of said contracts, plus other obligations of the Developer under the Development Agreement, may be drawn from the remaining unadvanced amount of the Lender under this Disbursement Agreement. In the alternative, upon default by the Developer of its obligations under the Development Agreement following the above described notice, the City may request the Lender to advance the remaining unadvanced funds under this Disbursement Agreement directly to the City, which funds the City shall hold in escrow for the exclusive purpose of completing the Developer Improvements and satisfying the other obligations of the Developer under the Developer Agreement. Upon final completion of the Developer Improvements, the City shall pay any remaining funds to the Lender to be applied as a payment on the Developer's behalf. The notice of unsecured 260/083- 2010.feb Page 2