addition, during the Earnout Period, no more
frequently than quarterly, Borrower may request partial disbursements of the
Earnout Reserve Deposit upon delivery to Lender of evidence indicating in
Lender's discretion that the Earnout Criteria are satisfied, and that the cash
flow from the Property is sufficient to support a Loan amount in excess of the
Qualified Loan Amount.
The amount of each partial disbursement shall be the
difference between the largest Loan amount that Lender determines in its
discretion can satisfy the Earnout Criteria at the time of calculation, and the
Qualified Loan Amount.
For purposes of example only, if Lender calculates the
Debt Service Coverage Ratio and Loan to Value Ratio and determines that the Loan
amount that supports such calculations is $17,200,000.00, and all other Earnout
Criteria are satisfied,
then the partial disbursement to Borrower from the
Earnout Reserve Account shall be $200,000.00.
(C)
FAILURE TO ACHIEVE EARNOUT CRITERIA PRIOR TO EXPIRATION OF EARNOUT
PERIOD.
IF LENDER DETERMINES IN ITS DISCRETION THAT THE EARNOUT CRITERIA HAVE
NOT BEEN SATISFIED TO SUPPORT THE MAXIMUM LOAN AMOUNT PRIOR TO THE EXPIRATION OF
THE EARNOUT PERIOD, (I) LENDER SHALL HAVE NO OBLIGATION TO EXTEND THE EARNOUT
PERIOD OR PAY BORROWER THE UNDISBURSED PORTION OF THE EARNOUT RESERVE DEPOSIT,
(II)
LENDER SHALL, AT BORROWER'S REQUEST, EITHER (A) MAINTAIN THE EARNOUT
RESERVE ACCOUNT AS AN ADDITIONAL CASH COLLATERAL ACCOUNT WITH RESPECT TO THE
LOAN FOR THE TERM OF THE LOAN, OR (B) APPLY THE EARNOUT RESERVE DEPOSIT TOWARD
REDUCING THE OUTSTANDING PRINCIPAL BALANCE OF THE NOTE (IN WHICH EVENT LENDER
SHALL RESET THE SCHEDULE OF PAYMENTS OF PRINCIPAL AND INTEREST DUE UNDER THE
LOAN TO ACCOUNT FOR THE THEN OUTSTANDING PRINCIPAL BALANCE AND REMAINING TERM OF
THE LOAN).
IF LENDER APPLIES THE
EARNOUT RESERVE DEPOSIT AGAINST THE
OUTSTANDING PRINCIPAL BALANCE OF THE NOTE, ANY SUCH PREPAYMENT OF PRINCIPAL
SHALL BE DEEMED A
29
PROHIBITED PREPAYMENT AND SHALL BE SUBJECT TO THE PROHIBITED PREPAYMENT FEE
HEREUNDER, WHICH SHALL BE PAYABLE BY BORROWER FROM FUNDS OTHER THAN THE EARNOUT
RESERVE DEPOSIT.
(D)
EVENT OF DEFAULT; NO WAIVER.
LENDER SHALL HAVE NO OBLIGATION TO
DISBURSE ANY PORTION OF THE EARNOUT RESERVE DEPOSIT AT ANY TIME DURING WHICH AN
EVENT OF DEFAULT EXISTS OR IF ANY EVENT OR CONDITION HAS OCCURRED AND IS
CONTINUING THAT WOULD BE AN EVENT OF DEFAULT IF NOTICE HAD BEEN GIVEN OR
APPLICABLE GRACE/CURE PERIODS HAD EXPIRED (OR BOTH).
NO DISBURSEMENT OF ANY
PORTION OF THE EARNOUT RESERVE DEPOSIT MADE BY LENDER AT THE TIME WHEN A DEFAULT
OR EVENT OF DEFAULT HAS OCCURRED AND IS THEN CONTINUING SHALL BE DEEMED A WAIVER
OR CURE BY LENDER OF THAT DEFAULT OR EVENT OF DEFAULT, NOR SHALL LENDER'S RIGHTS
AND REMEDIES BE PREJUDICED IN ANY MANNER THEREBY.
LENDER SHALL HAVE NO
OBLIGATION TO DISBURSE ANY PORTION OF THE EARNOUT RESERVE DEPOSIT AFTER THE
EARNOUT PERIOD.
(E)
ESCROW ACCOUNT REQUIREMENTS.
THE EARNOUT RESERVE ACCOUNT SHALL BE
A CUSTODIAL ACCOUNT ESTABLISHED BY LENDER, AND, AT LENDER'S OPTION, MAY BE
COMMINGLED WITH OTHER MONEY HELD