FOREGOING EVENTS, PRIOR TO THE SECOND ANNIVERSARY, THE
CONSTRUCTION LOAN, SUBJECT TO SECTION 3.1(B) ABOVE, SHALL NOT BE TERMINATED AND
ALL OF THE PROVISIONS REGARDING THE CONSTRUCTION LOAN IN THIS AGREEMENT AND THE
OTHER LOAN DOCUMENTS SHALL REMAIN IN FULL FORCE AND EFFECT, TO THE EXTENT
APPLICABLE, THROUGHOUT THE REMAINING TERM OF THE LOAN.
(D)
NOTWITHSTANDING ANYTHING TO THE CONTRARY SET
FORTH IN THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS, IN THE EVENT THAT THE
RELINQUISHMENT EFFECTIVE DATE
104
SHALL NOT HAVE OCCURRED FOR ANY REASON PRIOR TO THE SECOND ANNIVERSARY, THEN AT
ANY TIME ON OR AFTER THE SECOND ANNIVERSARY, LENDER SHALL HAVE THE RIGHT TO
ADVANCE THE ENTIRE UNFUNDED PORTION OF THE CONSTRUCTION LOAN (INCLUDING THE
ENTIRE CONSTRUCTION LOAN IF NO PORTION THEREOF HAS YET BEEN ADVANCED) INTO THE
CONSTRUCTION LOAN RESERVE ACCOUNT (THE "SECOND ANNIVERSARY UNFUNDED CONSTRUCTION
LOAN ADVANCE"), FOLLOWING WHICH (I) THE UNFUNDED PORTION OF THE CONSTRUCTION
LOAN SHALL BE HELD IN ACCORDANCE WITH THE PROVISIONS OF SECTIONS 7.7 AND 7.8
HEREOF AND SHALL CONSTITUTE A RESERVE FUND FOR ALL PURPOSES UNDER THIS AGREEMENT
AND THE OTHER LOAN DOCUMENTS, AND (II) ALL SUBSEQUENT CONSTRUCTION LOAN ADVANCES
SHALL BE ADVANCED FROM THE CONSTRUCTION LOAN RESERVE ACCOUNT, SUBJECT TO THE
SATISFACTION OF ALL CONDITIONS TO FUNDING WITH RESPECT THERETO SET FORTH IN THIS
AGREEMENT (AND SHALL CONTINUE TO CONSTITUTE CONSTRUCTION LOAN ADVANCES FOR ALL
PURPOSES UNDER THIS AGREEMENT NOTWITHSTANDING THAT THEY ARE BEING ADVANCED OUT
OF A RESERVE FUND).
(E)
ALL CONSTRUCTION LOAN ADVANCES (INCLUDING
THE SECOND ANNIVERSARY UNFUNDED CONSTRUCTION LOAN ADVANCE) SHALL FOR ALL
PURPOSES BE DEEMED PART OF THE OUTSTANDING PRINCIPAL BALANCE UPON THE MAKING OF
SUCH CONSTRUCTION LOAN ADVANCE BY LENDER.
(F)
IN NO EVENT SHALL ANY CONSTRUCTION LOAN
ADVANCE EXCEED THE FULL AMOUNT OF PROJECT COSTS THERETOFORE PAID OR TO BE PAID
WITH THE PROCEEDS OF SUCH CONSTRUCTION LOAN ADVANCE, PLUS ANY PROJECT COSTS
INCURRED BY BORROWERS THROUGH THE DATE OF THE DRAW REQUEST FOR SUCH CONSTRUCTION
LOAN ADVANCE, MINUS (I) WITH RESPECT TO ANY HARD COSTS, THE APPLICABLE RETAINAGE
FOR EACH CONTRACT AND SUBCONTRACT, (II) THE AGGREGATE AMOUNT OF ANY CONSTRUCTION
LOAN ADVANCES PREVIOUSLY MADE BY LENDER, AND (III) ANY SHORTFALL PAYMENTS
REQUIRED TO BE MADE BY BORROWERS PURSUANT TO SECTION 3.12 HEREOF.
IT IS FURTHER
UNDERSTOOD THAT, AS BETWEEN LENDER AND BORROWERS, THE RETAINAGE DESCRIBED ABOVE
IS INTENDED TO PROVIDE A CONTINGENCY FUND PROTECTING LENDER AGAINST FAILURE OF
BORROWERS OR GUARANTORS TO FULFILL ANY OBLIGATIONS UNDER THE LOAN DOCUMENTS, AND
THAT LENDER MAY CHARGE AMOUNTS AGAINST SUCH RETAINAGE IN THE EVENT LENDER IS
REQUIRED OR ELECTS TO EXPEND FUNDS TO CURE ANY CONTINUING EVENT OF DEFAULT.
(G)
THE RETAINAGE, AS APPLICABLE, SHALL BE
ADVANCED ON A CONTRACT BY CONTRACT BASIS AS FOLLOWS: (I) WITH RESPECT TO MAJOR
CONTRACTS WHICH HAVE BEEN PREVIOUSLY APPROVED BY LENDER IN ACCORDANCE WITH THE
TERMS HEREOF, THE RETAINAGE SHALL BE RELEASED IN ACCORDANCE WITH THE RETAINAGE
RELEASE PROVISIONS CONTAINED THEREIN, IT BEING ACKNOWLEDGED AND AGREED BY
BORROWERS, HOWEVER, THAT LENDER'S CONSENT OF ANY SUCH MAJOR CONTRACT