Common use of Supervised Bank Account Clause in Contracts

Supervised Bank Account. The proceeds of the note and the amount of $ to be contributed by the borrower from its own funds and used for eligible loan purposes shall be deposited in a supervised bank account'' as required by the Government. Amounts in the supervised bank account exceeding $100,000 shall be secured by the financial institution in advance in accordance with U.S. Treasury Department regulations, 31 CFR part 202. As provided therein the funds shall, until duly expended, collaterally secure the loan obligations. Withdrawals from the supervised bank account by the Borrower shall be made only on checks signed by the of the Borrower and countersigned by a representative of Rural Development, and only for the specific loan purposes approved in writing by the Government. The Borrower's share of any liquidated damages or other monies paid by defaulting contractors or their sureties shall be deposited in the supervised bank account to assure completion of the project. When all approved items eligible for payment with loan funds are paid in full, any balance remaining in the supervised bank account shall be applied on the note as an extra payment'' as defined in the regulations of Rural Development, and the supervised bank account shall be closed.