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4.5 The Agency will reduce the amount of the Loan commitment if the cost certification <br /> states that the cost of Eligible Improvements are lower than identified in the <br /> Application or for any other reason set forth in Paragraph 1.4 of this Commitment. <br /> Any changes in the construction measures, materials and installation techniques <br /> must have the prior written approval of the Agency. The Agency may also reduce <br /> the amount of the Loan if actual construction costs of the project are less than the <br /> costs identified in the Application or if the number of completed housing units will <br /> be fewer than identified in the Application. <br /> 4.6 All work shall be completed in compliance with legal requirements and restrictions, <br /> and the Borrower will keep its interest in the Project and improvements free from <br /> all liens for services, labor and materials throughout the term of the Deed of Trust. <br /> The Agency shall require satisfactory evidence of the payment of all debts owed to <br /> contractors, surveyors, architects, engineers, materialmen and the like for labor <br /> done or professional services rendered, or material furnished under any contract <br /> with respect to the Project. Moreover, the Agency shall have the right, but shall not <br /> be obligated, to disburse the proceeds of the Loan directly to any contractor, <br /> subcontractor, materialman, surveyor, engineer, architect or other person <br /> performing labor or services or delivering materials to the property which labor, <br /> services, or materials could form the basis for a lien against the Project. <br /> 4.7 Disbursements for payment to the general contractor for stored materials shall be <br /> permitted only if such materials have been delivered to and stored on the Project <br /> site or such materials have been stored in a local bonded warehouse; provided that <br /> the Agency shall have the right to limit aggregate amounts of disbursements for <br /> stored materials. The Agency will require a security agreement and Uniform <br /> Commercial Code financing statements specifically covering such materials. <br /> 4.8 The Agency will retain ten percent of the amount of the Loan during construction, <br /> such retainage being subtracted from each disbursement request. This retainage <br /> shall be disbursed to the Borrower upon the Conversion Date. <br /> 5. Conditions Precedent to Disbursement <br /> The Agency's obligation to disburse the Loan shall be subject to the satisfaction of the <br /> following conditions. <br /> 5.1 Each of the representations and warranties contained in the Application and in this <br /> Commitment Letter shall continue to be true and shall not have been breached. <br /> 5.2 The Agency shall preapprove all procurement and contracting procedures, and the <br /> Borrower agrees to submit proposed procurement and contracting procedures to the <br /> Agency within 60 days from the date of acceptance of this Commitment Letter. <br /> 5.3 All work performed, and materials and equipment furnished shall be in accordance <br /> with the work write-up and specifications for the work (as approved by the Agency <br /> prior to commencement of construction activities), and all work shall have been <br /> properly performed in a workmanlike manner. <br /> 5.4 No event of noncompliance, as defined in this commitment letter, shall have <br /> occurred and continue to exist. <br /> 6 <br />