Project Fund On the date of delivery of the Bonds, the Bond proceeds (excluding accrued and capitalized interest in accordance with Section 502 of the Indenture) shall be deposited in the Project Fund with the Trustee. The Authority and Trustee covenant and agree upon receipt of the Bond proceeds, that the Project Fund shall be established and maintained as trust account in the custody of the Trustee separate and apart from all other funds of the Authority, the Letter of Credit Bank and Owner. The funds on deposit in the Project Fund shall be expended by checks issued by the Trustee on the basis of requisitions to pay Project Costs. Such requisitions shall be originated, approved and executed by the Authorized Owner Representative, Authorized Authority Representative and Architect or Engineer, if appropriate, in that order. Such requisitions shall be in the form of Payment Requisition attached to this Loan Agreement (with such revisions as may be approved by Bond Counsel), shall be accompanied by invoices or orders to be paid as determined by Owner; PROVIDED, HOWEVER, until the general contractor has been selected for project construction and its performance bond approved by Underwriter, evidence of which shall be delivered to Trustee, not in excess of $400,000 of the monies available in the Project Fund shall be disbursed. Should the general contractor not be selected and its performance bond tendered to Underwriter for approval prior to January 12, 1987, the Bonds will be subject to extraordinary mandatory redemption as provided in the Bonds. As required by Section 178(D) of the Public Trust Act, the Authority shall report to the Board all expenditures made from the Project Fund, by means of a copy, forwarded by the Trustee to the Board, of all requisitions paid from the Project Fund or such other means to convey the information as determined by Trustee. The Owner will cause the Facilities to be acquired, constructed and equipped with all reasonable dispatch. The Owner represents that all such Facilities were ordered from the vendor, supplier or manufacturer thereof, or acquisition, construction, or development thereof was initiated subsequent to the date of the Inducement Resolution. If at any time prior to Completion Date, the Trustee shall, in its option, determine that the undisbursed funds in the Project Fund are insufficient to pay the then remaining Project Costs, the Trustee may, but shall be under no obligation to do so, require the Owner to deposit in the Project Fund, such sum or sums which when added to the funds on deposit therein, shall be adequate in the Trustee’s opinion, to pay the then remaining Project Costs. Failure of the Owner to make such a deposit within ten (10) days (or in all events by August 31, 1989) after written demand therefor by the Trustee shall constitute a Default. The Owner recognizes that the Trustee shall have the right under this Section to require deposit of funds by the Owner in the Project Fund any time after the issuance of the Bonds and prior to the Completion Date. Provided the Authority and Owner are otherwise in compliance with the terms and conditions of this Loan Agreement, the Trustee shall not be obligated to make any or further disbursements from the Project Fund, or to allow Payment Requisitions to be paid, if a Default exists and remains uncured or unwaived. The Project Fund shall be kept in the Trustee, shall be held in a separate and special trust account for the benefit of the Bondholders and shall not be subject to lien or attachment by any creditor of the Trustee, Letter of Credit Bank, Authority or Owner. Such funds shall constitute part of the Trust Estate and be subject to the lien thereon of the Indenture.
