BE DEEMED "COST SAVINGS"
HEREUNDER, BUT SHALL BE DEEMED TO BE PART OF THE LINE ITEM TO WHICH SUCH AMOUNT
WAS REALLOCATED AND THE LOAN BUDGET SHALL BE DEEMED AUTOMATICALLY AMENDED
WITHOUT FURTHER ACTION.
AS USED IN THIS AGREEMENT, "COST SAVINGS" SHALL MEAN
AND BE DETERMINED AS FOLLOWS:
(A)
IF LENDER REASONABLY DETERMINES THAT ANY
COMPONENT OF THE CONSTRUCTION OF THE PROJECT WHICH IS THE SUBJECT OF A LINE ITEM
(A "LINE ITEM COMPONENT") HAS BEEN COMPLETED WITHOUT THE EXPENDITURE BY
BORROWERS OF THE ENTIRE AMOUNT ALLOCATED IN THE LOAN BUDGET TO SUCH LINE ITEM
COMPONENT, AND ALL MAJOR CONTRACTORS HAVE BEEN PAID IN FULL FOR WORK PERFORMED
AND MATERIALS PROVIDED WITH RESPECT TO SUCH LINE ITEM COMPONENT, THE DIFFERENCE
BETWEEN THE AMOUNT OF SUCH LINE ITEM COMPONENT IN THE LOAN BUDGET AND THE AMOUNT
SO EXPENDED FOR SUCH LINE ITEM COMPONENT SHALL BE DEEMED TO BE A "COST SAVINGS";
OR
(B)
IF PRIOR TO THE COMPLETION OF THE LINE ITEM
COMPONENT (OTHER THAN THE LINE ITEM FOR INTEREST OR ANY CONTINGENCY LINE ITEM),
BORROWERS SHALL DEMONSTRATE TO LENDER'S REASONABLE SATISFACTION THAT UPON
COMPLETION OF SUCH LINE ITEM COMPONENT A COST SAVINGS WILL BE REALIZED PURSUANT
TO THE FOREGOING CLAUSE (I) WITH RESPECT TO SUCH LINE ITEM COMPONENT, THE AMOUNT
OF SUCH COST SAVINGS WHICH IS DEMONSTRATED TO LENDER'S REASONABLE SATISFACTION
SHALL ALSO BE DEEMED TO BE A "COST SAVINGS".
LENDER SHALL NOT BE REQUIRED TO
ALLOW SUCH A REALLOCATION WITH RESPECT TO A LINE ITEM CONSTITUTING HARD COSTS
UNLESS (1) SUCH LINE ITEM HAS A FIRM OR GUARANTEED MAXIMUM PRICE OR FIXED PRICE
CONTRACT OR SUB-CONTRACT IN PLACE, (2) THE WORK HAS COMMENCED AND IS PROCEEDING
SUBSTANTIALLY IN ACCORDANCE WITH THE CONSTRUCTION SCHEDULE, AND (3) THE
CONSTRUCTION CONSULTANT IS SATISFIED WITH SAID CONTRACT OR SUB-CONTRACT,
INCLUDING, WITHOUT LIMITATION, WITH REGARD TO THE SCOPE OF SAID CONTRACT OR
SUB-CONTRACT.
(C)
NEW LINE ITEMS MAY NOT BE CREATED WITHOUT
LENDER'S PRIOR WRITTEN CONSENT IN ITS REASONABLE DISCRETION AND, IF CREATED WITH
LENDER'S CONSENT, NO PORTION OF ANY CONTINGENCY LINE ITEM SHALL BE REALLOCATED
TO ANY SUCH NEW LINE ITEM, EXCEPT AS PROVIDED IN SECTION 3.10 HEREOF.
TO THE
EXTENT NOT PAID FOR BY REALLOCATING COST SAVINGS AMONG LINE ITEMS
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OR BY REALLOCATING ANY CONTINGENCY LINE ITEM IN ACCORDANCE WITH SECTION 3.10
HEREOF, NEW LINE ITEMS MUST BE PAID FOR BY BORROWERS FROM SOURCES OTHER THAN THE
LOAN.
Section 3.10
Contingency Reallocations.
(A)
THE AMOUNTS ALLOCATED AS CONTINGENCY (HARD
COSTS) OR CONTINGENCY (SOFT COSTS) IN THE LOAN BUDGET AND THAT ARE INTENDED TO
COVER THE EVENTUALITY OF UNFORESEEN COSTS OR COST OVERRUNS (THE "CONTINGENCY
LINE ITEMS") SHALL BE DISBURSED FROM TIME TO TIME UPON REQUEST BY BORROWERS AND,
SUBJECT TO SECTION 3.10(B) BELOW, UPON APPROVAL BY LENDER, NOT TO BE
UNREASONABLY WITHHELD, AND MAY BE USED ONLY FOR APPROPRIATE, AS APPLICABLE, HARD
COSTS OF, OR SOFT COSTS ASSOCIATED WITH, THE PROJECT.
ANY EXPENDITURE OF
CONTINGENCY (HARD COSTS) FOR SOFT COSTS OR CONTINGENCY (SOFT COSTS) FOR HARD
COSTS SHALL BE PROHIBITED