NORTH BROADWAY HOUSING PARTNERS LP

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12.10. HOME -ARP Subsidy Reserve. (a) A special "HOME -ARP Subsidy Reserve" shall be created and maintained as a segregated interest -bearing account held by the Developer for a minimum 15-year HOME -ARP Subsidy Reserve Compliance Period, subject to subsections (c) and (d) below. The HOME -ARP Subsidy Reserve shall be capitalized in the amount established at closing and approved by the City in accordance with Sections 5.1 and 6.1 of this Agreement, subject to the requirements of Section 6 above. Any interest earned on funds in the HOME -ARP Subsidy Reserve shall be added to and become part of the HOME -ARP Subsidy Reserve. (b) The HOME -ARP Subsidy Reserve shall be used in accordance with, and subject to, all requirements of the HOME -ARP Program, to pay any HOME - ARP Operating Expense Deficit which occurs during the HOME -ARP Compliance Period; provided, however, the Developer shall have no right to expend funds from the HOME -ARP Subsidy Reserve while a Developer Event of Default is continuing. (c) If at any time during the HOME -ARP Subsidy Reserve Compliance Period, the Developer experiences a cash flow shortfall resulting in a HOME -ARP Operating Expense Deficit which the Developer believes qualifies for payment out of the HOME -ARP Subsidy Reserve, Developer shall submit a written request to the City for consent to a disbursement from the HOME -ARP Subsidy Reserve including the specific expenses for which the disbursement is requested. The City shall approve or disapprove such request within ten (10) business days of receipt of the written request; such approval shall not be unreasonably withheld. (d) In no event shall any of the HOME -ARP Subsidy Reserve funds be used to pay for any partnership fees or asset management fees of the Partnership. (e) The HOME -ARP Subsidy Reserve is intended to assure affordability of the HOME -ARP Units during the HOME -ARP Subsidy Reserve Compliance Period. If the HOME -ARP Units continue to operate in accordance with the HOME -ARP requirements, per enforceable restrictions imposed by the City, after the HOME -ARP Subsidy Reserve Compliance Period, unexpended funds in the HOME -ARP Subsidy Reserve at the end of the HOME -ARP Subsidy Reserve Compliance Period may be retained in the HOME -ARP Subsidy Reserve and utilized to cover HOME -ARP Unit Operating Expense Deficits associated with HOME -ARP Units during the extended HOME -ARP Subsidy Reserve Compliance Period. (f) Unexpended funds in the HOME -ARP Subsidy Reserve at the time the HOME -ARP Restrictions are no longer enforced must be returned to the City and deposited in the City's HOME account and recorded as HOME Program income. (g) Per the HOME -ARP Regulations, no less than annually, the City will review the HOME -ARP Subsidy Reserve account to determine that the account is appropriately sized based on the projected operating deficits of the HOME -ARP Units restricted to occupancy for HOME -ARP Qualifying Populations. 37 WISEPIace Permanent Supportive Housing City HOME -ARP Loan Agreement