Common use of Determination of Advance Amounts as to Additional Timeshare Inventory Clause in Contracts

Determination of Advance Amounts as to Additional Timeshare Inventory. The provisions of this Section 2.1(a) pertain solely to Advances against Additional Timeshare Inventory and all references in this section to the defined term "Encumbered Timeshare Product" shall mean, for purposes of this section, Additional Timeshare Inventory that is from time to time subject to the lien of the mortgage. Lender hereby agrees, if Borrower has Performed all of the Obligations then due (and no Event of Default or Incipient Default exists), to make an Advance to Borrower against Additional Timeshare Inventory in accordance with the terms and conditions of this Agreement for the purposes specified in Section 2.3. The maximum amount of the Advance shall be equal to 13.5% of the Retail Value of the Encumbered Timeshare Product. At no time shall the unpaid principal balance of the Loan exceed the least of (i) the Maximum Loan Amount, (ii) 13.5% of the Retail Value of the Encumbered Timeshare Product, (iii) 80% of the prorated costs of goods sold ("Inventory Costs") of the Encumbered Timeshare Product from buildings in existence at the time of the initial Advance and at the time of the first Advance on Encumbered Timeshare Product from any buildings where construction was initiated after the Effective Date (the "Loan to Cost Ratio") or (iv) 75% of the appraised value of the Encumbered Timeshare Product, as reflected in the appraisals delivered to Lender pursuant to Sections 4.1(j) and 6.1(q) hereof. If at any time the limitation set forth in clause (i) above is exceeded, then within 5 Business Days thereafter, Borrower will make a principal payment to Lender in an amount equal to such overage. If at any time the limitations set forth in clauses (ii) through (iv) above are exceeded, then within 20 days thereafter, Borrower will at its sole option either (x) make a principal payment to Lender or (xi) pledge to Lender Additional Timeshare Inventory (under the conditions set forth in Section 2.11 hereof) (or any combination of the alternatives contained in clauses (x) or (xi) above) so that after such payment or pledge, the relevant limitation is not exceeded. Notwithstanding the foregoing, in order to avoid the complications arising from a recalculation of the Release Payments prior to the making of the End of Construction Advance, in no event shall Advances be permitted against Additional Timeshare Inventory during the period commencing on the making of the first Pre-Advance and ending on the making of the End of Construction Advance.