Common use of Cost Overruns Clause in Contracts

Cost Overruns. In the event there are cost overruns in relation to the development of the Property, the Senior Lender shall require that the amount of any such overruns be paid by the Covenantors. In the event the Covenantors are not able or fail to pay such cost overruns, then, prior to the Senior Lender making any advances under the Senior Loan with regard to such overruns, the Senior Lender may give written notice to the Subordinate Lender of the requirement for the amount of such cost overruns to be advanced, and the Subordinate Lender shall have ten (10) business days from the date of receipt of such written notice to advise the Senior Lender that the Subordinate Lender wishes to increase the Subordinate Loan by the amount of such overruns, and advance such amount to the Borrower, failing which the Senior Lender shall be entitled, in its sole discretion, to advance the amount of such cost overruns. In the event the Subordinate Lender advances the amount of such cost overruns to the Borrower, such amounts shall be secured under the Subordinate Security and form part of the Subordinate Indebtedness, and shall be subordinated and postponed to the Senior Security and the Senior Indebtedness to the full extent provided for in Section 1. In the event the Senior Lender advances the amount of such cost overruns to the Borrower (a “Cost Overrun Advance”), each such Cost Overrun Advance shall be secured under the Senior Security and form part of the Senior Indebtedness, and the Subordinate Lender agrees: (a) that the maximum principal amount of the Senior Indebtedness shall be automatically increased by the amount of each such Cost Overrun Advance; and (b) to execute such amendments to this Agreement and such registrable postponements of the Subordinate Security and other documents as the Senior Lender may require in connection with such Cost Overrun Advance.

Cost Overruns. In the event there are Borrower shall use its good faith efforts to prevent cost overruns in relation connection with the Project. Lender agrees to advance additional principal amounts equal to, and for payment of, cost overruns that Borrower is required to pay (and which cannot be funded from Tokai Loan proceeds or the then existing Loan proceeds) pursuant to the development terms of the PropertyTokai Loan Documents, the Senior Lender shall require that the amount of any such overruns be paid by the Covenantors. In the event the Covenantors are not able or fail to pay such cost overruns, then, prior to the Senior Lender making any advances under the Senior Loan with regard to such overruns, the Senior Lender may give written notice to the Subordinate Lender of the requirement for the amount of unless such cost overruns to be advanced, and the Subordinate Lender shall have ten (10) business days result from the date negligence or willful misconduct of receipt Borrower or its employees, contractors, subcontractors, agents or representatives. Lender may also advance additional principal amounts for cost overruns which are not required pursuant to the Tokai Loan Documents, but Lender elects to pay in its discretion. In no event, however, shall Lender be required to fund any shortfall under the Tokai Loan in the event Tokai Bank does not disburse the entirety of the Tokai Loan because of a default by any party other than Lender. For purposes of this Agreement, "cost overruns" shall mean actual costs of the Project allocated to any line item in the Project Budget to the extent they exceed such line item amount in the Project Budget. All additional principal so advanced shall constitute additional principal under the Note, shall bear interest as provided under the Note and shall be repaid pursuant to the terms of the Note. The repayment of such written notice to advise the Senior Lender that the Subordinate Lender wishes to increase the Subordinate Loan by the amount of such overruns, additional principal and advance such amount to the Borrower, failing which the Senior Lender shall be entitled, in its sole discretion, to advance the amount of such cost overruns. In the event the Subordinate Lender advances the amount of such cost overruns to the Borrower, such amounts interest thereon shall be secured under by the Subordinate Security Lender Deed of Trust, the Lender Assignment of Contracts and form part of the Subordinate Indebtedness, and shall be subordinated and postponed such other security interest as Lender may obtain pursuant to the Senior Security and the Senior Indebtedness to the full extent provided for in Section 1terms of this Agreement. In the event the Senior Lender advances the amount of such cost overruns to the Borrower (a “Cost Overrun Advance”), each such Cost Overrun Advance shall be secured under the Senior Security and form part of the Senior Indebtedness, and the Subordinate Lender agrees: (a) that the maximum principal amount of the Senior Indebtedness shall be automatically increased by the amount of each such Cost Overrun Advance; and (b) agrees to execute such amendments to this Agreement further documents and instruments and take such registrable postponements of the Subordinate Security and other documents further actions as the Senior Lender may require reasonably request to amend, supplement, restate or modify the Loan Documents and any title policies in connection order to evidence such additional indebtedness and to obtain, perfect and assure proper priority of Lender's security interests with respect to Borrower's obligation to repay such Cost Overrun Advanceadditional indebtedness.