EVER
OCCUR) UPON WHICH THE INTEREST RESERVE FUND IS IN AN INSUFFICIENT AMOUNT TO PAY
THE MONTHLY INTEREST PAYMENT DUE ON SUCH PAYMENT DATE AND TO ALSO MAINTAIN THE
MINIMUM BALANCE, IF (A) BORROWERS FAIL TO SUBMIT ANY DRAW REQUEST FOR A
CONSTRUCTION LOAN ADVANCE OR FAIL TO SUBMIT A DRAW REQUEST FOR A CONSTRUCTION
LOAN ADVANCE THAT INCLUDES A MONTHLY INTEREST ADVANCE, (B) THE APPLICABLE
REQUESTED CONSTRUCTION LOAN ADVANCE HAS NOT BEEN APPROVED AS A RESULT OF THE
FAILURE OF ANY APPLICABLE CONDITION SET FORTH IN THIS AGREEMENT, AND/OR (C) AN
EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING, IN ANY OF THE FOREGOING
INSTANCES LENDER SHALL HAVE THE RIGHT (BUT NOT THE OBLIGATION), IN ITS SOLE AND
ABSOLUTE DISCRETION, WITHOUT THE NECESSITY OF NOTIFYING, OR OBTAINING THE
APPROVAL OF, ANY BORROWER OR ANY OTHER PERSON, AND WITHOUT ANY BORROWER'S
SPECIFIC REQUEST, TO ADVANCE A PORTION OF THE CONSTRUCTION LOAN NECESSARY TO PAY
THE MONTHLY INTEREST PAYMENT THEN DUE DIRECTLY TO THE SERVICER (A "LENDER
MONTHLY INTEREST ADVANCE").
WITH RESPECT TO THE FOREGOING, BORROWERS AND LENDER
EXPRESSLY ACKNOWLEDGE AND AGREE THAT (I) THE FACT THAT LENDER MAKES A LENDER
MONTHLY INTEREST ADVANCE SHALL NOT RELIEVE BORROWERS FROM THE OBLIGATION TO MAKE
ALL FUTURE MONTHLY INTEREST PAYMENTS, SUBJECT TO SECTION 3.20.1 HEREOF, (II) THE
FACT THAT LENDER MAKES A LENDER MONTHLY INTEREST ADVANCE IN ANY INSTANCE SHALL
NOT OBLIGATE LENDER TO MAKE ANY SUBSEQUENT LENDER MONTHLY INTEREST ADVANCE IN
THE SAME OR IN ANY OTHER INSTANCE, (III) A LENDER MONTHLY INTEREST ADVANCE, WHEN
MADE, SHALL CONSTITUTE A CONSTRUCTION LOAN ADVANCE FOR ALL PURPOSES UNDER THIS
AGREEMENT AND SHALL CONSTITUTE THE ONLY CONSTRUCTION LOAN ADVANCE AVAILABLE TO
BORROWERS FOR THE SUBSEQUENT THIRTY (30) DAYS, (IV) THE AMOUNT OF ANY LENDER
MONTHLY INTEREST ADVANCE MAY EXCEED THE UNFUNDED BALANCE OF THE INTEREST LINE
ITEM IN THE LOAN BUDGET AND LENDER SHALL DETERMINE, IN ITS REASONABLE
DISCRETION, WHERE TO REALLOCATE FUNDS IN THE LOAN BUDGET TO COVER ANY SUCH
EXCESS, AND (V) IF LENDER MAKES A LENDER MONTHLY INTEREST ADVANCE FOR PAYMENT OF
ALL OR ANY PART OF ANY MONTHLY INTEREST PAYMENT PURSUANT TO THIS SECTION 3.20.2,
THEN THE FAILURE OF BORROWERS TO PAY SUCH MONTHLY INTEREST PAYMENT OR THE
APPLICABLE PORTION THEREOF SHALL NOT BE DEEMED AN EVENT OF DEFAULT (BUT IT SHALL
NOT BE DEEMED TO CURE ANY OTHER EXISTING EVENT OF DEFAULT).
Section 3.21
Construction Loan Advances Once
Construction Loan is Fully Advanced.
Lender and Borrowers acknowledge and agree
that because Lender is permitting Borrowers to delay Borrowers' equity
contribution in the Project in return for Borrowers posting the Required Equity
Letter(s) of Credit, it is anticipated that at some point in time prior to
Substantial Completion, the Construction Loan Amount, other than the interest
Line Item, will be fully advanced (such time being referred to herein as the
"Borrower Advance Date").
Accordingly, from and after the Borrower Advance Date
and until Final Completion, the following shall apply to each subsequent
Construction Loan Advance:
138
(A)
CONDITIONS TO ADVANCES.