UNDER THE BUILDING LOAN
AGREEMENT).
ANY COMPLETION DEPOSIT SHALL (A) BE HELD BY AGENT IN AN
INTEREST-BEARING ACCOUNT PURSUANT TO A PLEDGE AND ASSIGNMENT AGREEMENT IN FORM
AND SUBSTANCE REASONABLY SATISFACTORY TO AGENT, WHICH AGREEMENT BORROWER SHALL
EXECUTE AND DELIVER TO AGENT SIMULTANEOUSLY WITH THE DELIVERY OF THE FIRST
MONIES CONSTITUTING A PART OF SUCH DEPOSIT AND (B) CONSTITUTE (TOGETHER WITH THE
INTEREST EARNED THEREON) ADDITIONAL COLLATERAL FOR THE PROJECT LOAN AND BUILDING
LOAN.
NOTWITHSTANDING ANY OF THE FOREGOING, DURING THE CONTINUANCE OF AN EVENT
OF DEFAULT, AGENT MAY APPLY COMPLETION DEPOSITS IN SUCH MANNER AS AGENT SHALL
DETERMINE.
SECTION 3.07
QUALITY OF WORK.
(A)
NO ADVANCE OR ANY PORTION THEREOF SHALL BE MADE WITH RESPECT TO DEFECTIVE WORK,
WORK THAT IS NOT IN SUBSTANTIAL COMPLIANCE WITH THE PLANS AND SPECIFICATIONS OR
IN COMPLIANCE WITH THE PUBLIC PROJECT AGREEMENTS OR WORK WHICH DOES NOT COMPLY
WITH ALL LEGAL REQUIREMENTS APPLICABLE TO THE CONSTRUCTION OF THE PROJECT, EACH
AS REASONABLY DETERMINED BY THE CONSTRUCTION CONSULTANT AND AGENT.
LENDERS
SHALL, SUBJECT TO COMPLIANCE BY BORROWER WITH ALL OTHER APPLICABLE REQUIREMENTS
OF THIS AGREEMENT, ADVANCE ON THE DATE OF THE NEXT ADVANCE THE REMAINDER OF ANY
SUCH ADVANCE OR PORTION THEREOF PREVIOUSLY NOT DISBURSED UNDER THIS
SECTION AFTER CONSTRUCTION CONSULTANT NOTIFIES AGENT THAT THE UNSATISFACTORY
WORK HAS BEEN CORRECTED.
(B)
THE MAKING OF AN ADVANCE BY LENDERS SHALL
NOT CONSTITUTE ANY LENDER'S OR AGENT'S APPROVAL OR ACCEPTANCE OF THE
CONSTRUCTION THERETOFORE COMPLETED OR A WAIVER OF ANY OF THE CONDITIONS TO
LENDERS' OBLIGATION TO MAKE FUTURE ADVANCES, NOR IN THE EVENT THAT BORROWER IS
UNABLE TO SATISFY ANY SUCH CONDITION, SHALL ANY SUCH FAILURE TO REQUIRE THAT
SUCH CONDITION BE SATISFIED HAVE THE EFFECT OF PRECLUDING AGENT FROM THEREAFTER
REQUIRING THAT SUCH CONDITION BE SATISFIED AND REFUSING TO MAKE AN ADVANCE.
AGENT'S OR CONSTRUCTION CONSULTANT'S INSPECTION AND APPROVAL OF THE PLANS AND
SPECIFICATIONS, THE CONSTRUCTION OF THE PROJECT, OR THE WORKMANSHIP AND
MATERIALS USED THEREIN, SHALL IMPOSE NO LIABILITY OF ANY KIND ON LENDERS, AGENT
OR CONSTRUCTION CONSULTANT, THE SOLE OBLIGATION OF LENDERS AS THE RESULT OF SUCH
INSPECTION AND APPROVAL BEING TO MAKE THE ADVANCES IF, AND TO THE EXTENT,
REQUIRED BY THIS AGREEMENT.
39
SECTION 3.08
INITIAL REQUIRED EQUITY
FUNDS; NET PROCEEDS; NET AWARD OR PROCEEDS.
(A) ALL INITIAL REQUIRED EQUITY
FUNDS SHALL HAVE BEEN EXPENDED BEFORE ANY ADVANCES OF THE PROJECT LOAN SHALL BE
MADE.
ALL NET PROCEEDS AND NET AWARD OR PROCEEDS, IF ANY, THAT ARE HELD BY
AGENT AND MADE AVAILABLE TO BORROWER PURSUANT TO SECTION 2.05(M) OR
SECTION 2.06, AS APPLICABLE, OF THE PROJECT LOAN MORTGAGE, SHALL HAVE BEEN
EXPENDED BEFORE ANY ADDITIONAL ADVANCES OF THE PROJECT LOAN SHALL BE MADE.
(B)
NOTWITHSTANDING ANYTHING TO THE CONTRARY IN
SECTION 3.08(A), IF THERE IS AN "OVERBUDGETED" LINE ITEM IN THE NYTC UNITS
BUDGET PURSUANT TO CLAUSE (A), (B) OR (C) OF THE FIRST SENTENCE OF
SECTION 7.11(D) PRIOR TO THE CONTRIBUTION OF ALL OF THE INITIAL REQUIRED EQUITY
FUNDS, THE INITIAL REQUIRED EQUITY FUNDS AND THE MAXIMUM