Common use of Project Cost Overruns Clause in Contracts

Project Cost Overruns. If, at any time, the remaining costs of completing any Project exceeds the remaining undisbursed portion of the Loan allocated for that Project, as determined by Lender, whether such increase is a consequence of modifications or amendments to the Construction Contracts or cost overruns, then, Lender shall not be obligated to approve any Advances or further disbursements from the Collateral Account until such time as Borrower has either provided evidence that it has advanced from its own funds all expenses of such cost overruns or has paid additional sums into the Collateral Account as hereinafter provided. Lender shall have the right to demand that Borrower pay into the Collateral Account additional sums as calculated by Lender in its reasonable discretion sufficient to complete the Project in accordance with the Construction Contracts such that the amounts so deposited into the Collateral Account and the remaining undisbursed balance of the Loan allocated to the Project is in an amount that equals or exceeds the revised Project Budget; and Borrower’s failure to do so within ten (10) days of demand by Lender shall constitute an Event of Default. Lender shall have no obligation to make disbursements from the Collateral Account or make any Advances under the Loan until such funds have been deposited with Lender, as Lender may request from time to time in accordance with the provisions of this Agreement. Such funds shall constitute a portion of Borrower’s Deposits. The Collateral Account shall be an account maintained with Lender into which all of Borrower’s Deposits shall be deposited and into which Advances on the Loan may be deposited and against which checks may be drawn for the purpose of disbursing the proceeds for the purposes described herein and for the other purposes described in this Agreement. Borrower shall not have the right to withdraw the funds for any purpose. No interest shall accrue on the funds deposited into the Collateral Account. All funds in the Collateral Account are pledged as additional Collateral for the Loan.

Project Cost Overruns. If, at any time, the remaining costs of completing any Project exceeds the remaining undisbursed portion of the Loan allocated for that Project, as determined by Lender, whether such increase is a consequence of modifications or amendments to the Construction Contracts or cost overruns, then, Lender shall not be obligated to approve any Advances or further disbursements from the Collateral Account until such time as Borrower has either provided evidence that it has advanced from its own funds all expenses of such cost overruns or has paid additional sums into the Collateral Account as hereinafter provided. Lender shall have the right to demand that Borrower pay into the Collateral Account additional sums as calculated by Lender in its reasonable discretion sufficient to complete the Project in accordance with the Construction Contracts such that the amounts so deposited into the Collateral Account and the remaining undisbursed balance of the Loan allocated to the Project is in an amount that equals or exceeds the revised Project Budget; and Borrower’s failure to do so within ten (10) days of demand by Lender shall constitute an Event of Default. Lender shall have no obligation to make disbursements from the Collateral Account or make any Advances under the Loan until such funds have been deposited with Lender, as Lender may request from time to time in accordance with the provisions of this Agreement. Such funds shall constitute a portion of Borrower’s 's Deposits. The Collateral Account shall be an account maintained with Lender into which all of Borrower’s 's Deposits shall be deposited and into which Advances on the Loan may be deposited and against which checks may be drawn for the purpose of disbursing the proceeds for the purposes described herein and for the other purposes described in this Agreement. Borrower shall not have the right to withdraw the funds for any purpose. No interest shall accrue on the funds deposited into the Collateral Account. All funds in the Collateral Account are pledged as additional Collateral for the Loan.