Common use of Retainages Clause in Contracts

Retainages. Disbursement of the available proceeds of the Loan shall be limited to an amount equal to the percentage thereof required by the terms of the Construction Contracts, but in no event shall Lender be obligated in respect of any Construction Contract, until the Architect and the Lender Consultant confirm that the Project is ninety-five percent (95%) completed, to disburse in excess of ninety percent (90%) of the value (as certified by the Lender Consultant), of the materials and labor incorporated in the Project from time to time pursuant to such Construction Contract. Upon achievement of ninety-five percent (95%) completion of the Project, assuming no Default or Event of Default has occurred and is then continuing, (a) one-half of the total amount of retainage withheld shall be released, or approved for release and deposited with the Title Company in its capacity as the escrow agent under the Construction Escrow, subject to Borrower’s compliance with the disbursement requirements set forth herein, and (b) for each subsequent monthly periodic advance, retainage shall be reduced to five percent (5%) of approved “hard costs” of construction]Lender agrees that retainage shall not apply to Project land cost or Project “soft costs”. Upon certification by the Architect and Lender Consultant that the work of any Subcontractor has been satisfactorily completed, the remaining retainage applicable to such Subcontract may be paid to the Subcontractor.