Common use of Borrower’s Deposit Clause in Contracts

Borrower’s Deposit. (a) With respect to any Approved Subdivision, if in Lender’s reasonable judgment, there are insufficient funds remaining in the Loan, or insufficient availability under the Borrowing Base, as applicable, for the completion of the Properties in such Approved Subdivision in accordance with the then-effective Construction Cost Breakdown for such Approved Subdivision and Borrower fails, within ten (10) business days of Lender’s delivery of notice to Borrower of Lender’s determination of the existence of such insufficiency as to such Approved Subdivision, to submit a revised Construction Cost Breakdown for such Approved Subdivision addressing such apparent or actual insufficiency of funds, which Construction Cost Breakdown shall be acceptable in form and content to Lender’s satisfaction, and which takes into account Borrower’s compliance with all other Construction Cost Breakdowns then in effect as to all other Approved Subdivisions then included in the Borrowing Base, it shall constitute a Default hereunder. If Lender determines, based on its review of the revised Construction Cost Breakdown, together with such other information required in connection therewith by Lender, that the Loan will not be In-Balance (as defined below) after giving effect to such revised Construction Cost Breakdown, then in such case, Borrower shall deposit with Lender, within fifteen (15) days after demand by Lender, such sums, either in the form of cash or letter(s) of credit acceptable to Lender (“Borrower’s Deposit”), as Lender may deem necessary, in addition to the Loan, for the completion of the Properties in such Approved Subdivision, the payment of all costs in connection with the construction of such Properties, and the performance of any obligation of Borrower to Lender owed with respect thereto. Borrower hereby agrees that Lender (i) shall have a security interest in any Borrower’s Deposit in any form to secure all of Borrower’s obligations under the Loan Instruments, and (ii) may apply any proceeds of any Borrower’s Deposit for the purposes contemplated herein without any further consent or action on Borrower’s part. Lender shall not be required to pay interest on the Borrower’s Deposit. Lender will disburse all or a portion of the Borrower’s Deposit prior to any disbursement of any portion of the Loan Proceeds to complete Properties in the affected Approved Subdivision(s). Borrower shall promptly notify Lender in writing if and when the cost of the construction of the Properties in an Approved Subdivision materially exceeds, or appears likely to materially exceed, the amounts budgeted therefor in the then-current Construction Cost-Breakdown for such Approved Subdivision. For purposes hereof, “materially” shall mean a variance of ten percent (10%) from the budgeted amounts for such item. (b) The Loan is in-balance whenever the amount of the undisbursed Loan Proceeds or availability under the Borrowing Base (taking into account Borrower’s compliance with the Construction Cost Breakdowns then in effect as to all Approved Subdivisions then included in the Borrowing Base), as applicable, plus any sums on deposit in the Borrower’s Deposit, are sufficient in the reasonable judgment of Lender to pay, through completion of the Properties, in accordance with the then-applicable Construction Cost Breakdowns for each Approved Subdivision then subject to a Mortgage and maturity of the Loan, all of the following sums (“In-Balance”): (i) All costs of construction, ownership and maintenance of the Properties; (ii) All costs of marketing and sale of the Properties (if this Loan Agreement contemplates such marketing and sale during the term of the Loan); and (iii) All interest and all other sums which may accrue or be payable under the Loan Instruments. (c) Failure of the Loan to be In-Balance shall mean that the Loan is out-of-balance (“Out-Of-Balance”); provided, however, Borrower shall have the right to submit revised Construction Cost Breakdowns for the Approved Projects in the Borrowing Base, which shall be subject to the approval of Lender, which, in the aggregate, shall bring the Loan In-Balance; (i) Borrower acknowledges that the Loan may become Out-Of-Balance in numerous ways, not all of which may now be foreseen. Borrower further acknowledges that the Loan may become Out-Of-Balance from a shortage of funds in any single line item or category of the Construction Cost Breakdowns, even if there are undisbursed Loan Proceeds in other line items or categories. Undisbursed Loan Proceeds in one category or line item (e.g., construction costs) may not be applied to another category or line item (e.g., interest reserve) unless either the Construction Cost Breakdowns allow such use (and only to the extent specifically allowed) or Lender consents in writing to such use in each instance. (ii) Whenever the Loan becomes Out-Of-Balance, Lender may make written demand on Borrower to deposit Borrower’s own funds into Borrower’s Deposit in an amount sufficient, in Lender’s reasonable judgment, to cause the Loan to be In-Balance. Borrower must immediately deposit all funds required by Lender’s demand. Borrower must also submit, for Lender’s approval, revised Construction Cost Breakdowns as to all Approved Subdivisions affected thereby within fifteen (15) days after any such demand. Lender shall disburse all funds held in Borrower’s Deposit in the manner provided in this Loan Agreement for Disbursements of the Loan Proceeds.

Borrower’s Deposit. Subject to the reallocation provisions in Section 6 hereof, Borrower hereby covenants and agrees with Lender that if from time to time Lender reasonably determines that the unadvanced portion of the Loan will be insufficient for payment in full of (a) With respect to any Approved Subdivisioncosts of labor, if in Lender’s reasonable judgmentmaterials, there are insufficient funds remaining and services required for the construction of the Improvements, (b) other costs and expenses specified herein or in the Loan, or insufficient availability under the Borrowing Base, as applicable, for the completion of the Properties in such Approved Subdivision Budget (subject to Borrower’s right to reallocate savings in accordance with the then-effective Construction Cost Breakdown for such Approved Subdivision and Borrower fails, within ten (10) business days of Lender’s delivery of notice to Borrower of Lender’s determination of the existence of such insufficiency as to such Approved Subdivision, to submit a revised Construction Cost Breakdown for such Approved Subdivision addressing such apparent or actual insufficiency of funds, which Construction Cost Breakdown shall be acceptable in form and content to Lender’s satisfaction, and which takes into account Borrower’s compliance with all other Construction Cost Breakdowns then in effect as to all other Approved Subdivisions then included in the Borrowing Base, it shall constitute a Default hereunder. If Lender determines, based on its review of the revised Construction Cost Breakdown, together with such other information required in connection therewith by Lender, that the Loan will not be In-Balance (as defined below) after giving effect to such revised Construction Cost Breakdown, then in such case, Borrower shall deposit with Lender, within fifteen (15) days after demand by Lender, such sums, either in the form of cash or letter(s) of credit acceptable to Lender (“Borrower’s Deposit”Section 6 hereof), as Lender may deem necessary, in addition or (c) other costs and expenses required to the Loan, for the completion of the Properties in such Approved Subdivision, the payment of all costs be paid in connection with the construction of such Propertiesthe Improvements in accordance with the Plans and Specifications or any governmental requirements, and then Borrower shall, on request of Lender, immediately make a "Borrower's Deposit" (herein so called) with Lender in an amount equal to the performance of any obligation of Borrower to Lender owed with respect thereto. Borrower hereby agrees that Lender (i) shall have a security interest in any Borrower’s Deposit in any form to secure all of Borrower’s obligations under the Loan Instruments, and (ii) may apply any proceeds of any Borrower’s Deposit for the purposes contemplated herein without any further consent or action on Borrower’s part. Lender shall not be required to pay interest on the Borrower’s Depositdeficiency. Lender will disburse advance all or a any portion of the Borrower’s 's Deposit prior to any disbursement of any portion of the Loan Proceeds to complete Properties in the affected Approved Subdivision(s)proceeds. Borrower shall promptly notify Lender in writing if and when the cost of the construction of the Properties in an Approved Subdivision materially Improvements exceeds, or appears likely to materially exceed, the amounts budgeted therefor in the then-current Construction Cost-Breakdown for such Approved Subdivision. For purposes hereof, “materially” shall mean a variance of ten percent (10%) from the budgeted amounts for such item. (b) The Loan is in-balance whenever the amount of the undisbursed Loan Proceeds or availability under the Borrowing Base (taking into account Borrower’s compliance with the Construction Cost Breakdowns then in effect as to all Approved Subdivisions then included in the Borrowing Base), as applicable, plus any sums on deposit in the Borrower’s Deposit, are sufficient in the reasonable judgment of Lender to pay, through completion of the Properties, in accordance with the then-applicable Construction Cost Breakdowns for each Approved Subdivision then subject to a Mortgage and maturity unadvanced portion of the Loan, all plus the unadvanced portion of the following sums (“In-Balance”): (i) All costs Borrower's equity contribution, plus the unadvanced portion of constructionany then existing Borrower's Deposit. Borrower's Deposit is hereby pledged as additional collateral for the Loan, ownership and maintenance Borrower hereby grants and conveys to Lender a security interest in all funds so deposited with Lender. Upon an Event of Default, Lender may, but shall not be obligated to, apply all or any portion of the Properties; (ii) All costs of marketing and sale Borrower's Deposit against the interest due or the outstanding principal balance under the Note or amounts due under any of the Properties (if this Loan Agreement contemplates such marketing and sale during the term of the Loan); and (iii) All interest and all other sums which may accrue or be payable under the Loan InstrumentsSecurity Documents. (c) Failure of the Loan to be In-Balance shall mean that the Loan is out-of-balance (“Out-Of-Balance”); provided, however, Borrower shall have the right to submit revised Construction Cost Breakdowns for the Approved Projects in the Borrowing Base, which shall be subject to the approval of Lender, which, in the aggregate, shall bring the Loan In-Balance; (i) Borrower acknowledges that the Loan may become Out-Of-Balance in numerous ways, not all of which may now be foreseen. Borrower further acknowledges that the Loan may become Out-Of-Balance from a shortage of funds in any single line item or category of the Construction Cost Breakdowns, even if there are undisbursed Loan Proceeds in other line items or categories. Undisbursed Loan Proceeds in one category or line item (e.g., construction costs) may not be applied to another category or line item (e.g., interest reserve) unless either the Construction Cost Breakdowns allow such use (and only to the extent specifically allowed) or Lender consents in writing to such use in each instance. (ii) Whenever the Loan becomes Out-Of-Balance, Lender may make written demand on Borrower to deposit Borrower’s own funds into Borrower’s Deposit in an amount sufficient, in Lender’s reasonable judgment, to cause the Loan to be In-Balance. Borrower must immediately deposit all funds required by Lender’s demand. Borrower must also submit, for Lender’s approval, revised Construction Cost Breakdowns as to all Approved Subdivisions affected thereby within fifteen (15) days after any such demand. Lender shall disburse all funds held in Borrower’s Deposit in the manner provided in this Loan Agreement for Disbursements of the Loan Proceeds.

Borrower’s Deposit. If at any time, or from time to time, Lender, in the exercise of its reasonable discretion, determines that the total of the previously disbursed Loan funds and the remaining undisbursed Loan funds as to any Property are less than one hundred percent (a100%) With of the then total costs of the Improvements contemplated for such Property, and payment of all fees, charges, costs and contingencies which are the obligation of Borrower pursuant to the terms hereof for such Property, then Lender may demand in writing that the amount which, when added to the then undisbursed Loan funds, will be sufficient to complete the Improvements and make such payments with respect to any Approved Subdivisionsuch Property, if in Lender’s reasonable judgment, there are insufficient funds remaining in shall be deposited with Lender to insure such completion and payment. Such deposit shall be defined herein as the Loan, or insufficient availability under the Borrowing Base, as applicable, for the completion of the Properties in such Approved Subdivision in accordance with the then-effective Construction Cost Breakdown for such Approved Subdivision and "Borrower's Deposit." Borrower failsshall, within ten (10) business days of Lender’s delivery of notice to Borrower of Lender’s determination of after demand, deposit with Lender the existence amount of such insufficiency deficiency as to such Approved Subdivision, to submit a revised Construction Cost Breakdown for such Approved Subdivision addressing such apparent or actual insufficiency of funds, which Construction Cost Breakdown shall be acceptable in form and content to Lender’s satisfaction, and which takes into account Borrower’s compliance with all other Construction Cost Breakdowns then in effect as to all other Approved Subdivisions then included in the Borrowing Base, it shall constitute a Default hereunder. If Lender determines, based on its review of the revised Construction Cost Breakdown, together with such other information required in connection therewith determined by Lender, that which may be held in on an interest bearing account (and if held by Lender in its general accounts or separate interest bearing account any earnings thereon shall be payable to or accrue to the Loan will not be In-Balance (as defined below) after giving effect to benefit of Borrower). Until such revised Construction Cost Breakdown, then in such case, Borrower shall deposit funds have been deposited with Lender, within fifteen (15) days after demand by Lender, such sums, either in the form of cash or letter(s) of credit acceptable to Lender (“Borrower’s Deposit”), as Lender may deem necessary, in addition to the Loan, for the completion of the Properties in such Approved Subdivision, the payment of all costs in connection with the construction of such Properties, and the performance of any obligation of Borrower to Lender owed with respect thereto. Borrower hereby agrees that Lender (i) shall have a security interest in any Borrower’s Deposit in any form no duty to secure all of Borrower’s obligations under the Loan Instruments, and (ii) may apply any proceeds of any Borrower’s Deposit for the purposes contemplated herein without make any further consent or action on Borrower’s partadvances of Loan funds. Lender shall not be required All funds so deposited by Borrower pursuant to pay interest on the Borrower’s Deposit. Lender will disburse all or a portion of the Borrower’s Deposit prior to any disbursement of any portion of the Loan Proceeds to complete Properties in the affected Approved Subdivision(s). Borrower shall promptly notify Lender in writing if and when the cost of the construction of the Properties in an Approved Subdivision materially exceeds, or appears likely to materially exceed, the amounts budgeted therefor in the then-current Construction Cost-Breakdown for such Approved Subdivision. For purposes hereof, “materially” shall mean a variance of ten percent (10%) from the budgeted amounts for such item. (b) The Loan is in-balance whenever the amount of the undisbursed Loan Proceeds or availability under the Borrowing Base (taking into account Borrower’s compliance with the Construction Cost Breakdowns then in effect as to all Approved Subdivisions then included in the Borrowing Base), as applicable, plus any sums on deposit in the Borrower’s Deposit, are sufficient in the reasonable judgment of Lender to pay, through completion of the Properties, in accordance with the then-applicable Construction Cost Breakdowns for each Approved Subdivision then subject to a Mortgage and maturity of the Loan, all of the following sums (“In-Balance”): (i) All costs of construction, ownership and maintenance of the Properties; (ii) All costs of marketing and sale of the Properties (if this Loan Agreement contemplates such marketing and sale during the term of the Loan); and (iii) All interest and all other sums which may accrue or be payable under the Loan Instruments. (c) Failure of the Loan to be In-Balance shall mean that the Loan is out-of-balance (“Out-Of-Balance”); provided, however, Borrower shall have the right to submit revised Construction Cost Breakdowns for the Approved Projects in the Borrowing Base, which paragraph shall be subject to the approval of Lender, which, in the aggregate, shall bring the Loan In-Balance; (i) Borrower acknowledges that the Loan may become Out-Of-Balance in numerous ways, not all of which may now be foreseen. Borrower further acknowledges that the Loan may become Out-Of-Balance from a shortage of funds in any single line item or category of the Construction Cost Breakdowns, even if there are undisbursed Loan Proceeds in other line items or categories. Undisbursed Loan Proceeds in one category or line item (e.g., construction costs) may not be applied to another category or line item (e.g., interest reserve) unless either the Construction Cost Breakdowns allow such use (and only to the extent specifically allowed) or disbursed by Lender consents in writing to such use in each instance. (ii) Whenever the Loan becomes Out-Of-Balance, Lender may make written demand on Borrower to deposit Borrower’s own funds into Borrower’s Deposit in an amount sufficient, in Lender’s reasonable judgment, to cause the Loan to be In-Balance. Borrower must immediately deposit all funds required by Lender’s demand. Borrower must also submit, for Lender’s approval, revised Construction Cost Breakdowns as to all Approved Subdivisions affected thereby within fifteen (15) days after any such demand. Lender shall disburse all funds held in Borrower’s Deposit in the manner provided in this Loan Agreement herein for Disbursements disbursement of the Loan Proceedsfunds and in such order as Lender may select. All such funds are hereby assigned to Lender as additional security for the indebtedness of Borrower arising hereunder, and may be applied in satisfaction of Borrower's obligations to Lender the occurrence of on an Event of Default.

Borrower’s Deposit. If Lender reasonably determines at any time that the unadvanced portion of the Loan will be insufficient for payment in full of (a) With respect costs of labor, materials, and services required for the construction of the Improvements, (b) other costs and expenses specified in the Approved Budget, (c) interest from time to any Approved Subdivision, if in Lender’s reasonable judgment, there are insufficient funds remaining in time owing or to become owing on the Loan, or insufficient availability under (d) other costs and expenses required to be paid in connection with the Borrowing Base, as applicable, for the completion construction of the Properties in such Approved Subdivision Improvements in accordance with the then-effective Construction Cost Breakdown for such Approved Subdivision Plans and any Governmental Requirements, and (e) other costs and expenses arising in connection with the ownership, operation, development and/or construction of the Property, then Borrower failsshall, within ten (10) business days of Lender’s delivery of notice to Borrower of Lender’s determination of the existence of such insufficiency as to such Approved Subdivision's written request, to submit a revised Construction Cost Breakdown for such Approved Subdivision addressing such apparent or actual insufficiency of funds, which Construction Cost Breakdown shall be acceptable in form and content to Lender’s satisfaction, and which takes into account Borrower’s compliance with all other Construction Cost Breakdowns then in effect as to all other Approved Subdivisions then included in the Borrowing Base, it shall constitute a Default hereunder. If Lender determines, based on its review of the revised Construction Cost Breakdown, together with such other information required in connection therewith by Lender, that the Loan will not be In-Balance (as defined below) after giving effect to such revised Construction Cost Breakdown, then in such case, Borrower shall deposit with LenderLender such sums (collectively, within fifteen (15the "BORROWER'S DEPOSIT") days after demand by Lender, such sums, either in the form of cash or letter(s) of credit acceptable to Lender (“Borrower’s Deposit”), as Lender may deem reasonably necessary, in addition to the Loan, for the completion of the Properties in such Approved SubdivisionImprovements, the payment of all costs in connection with the construction of such Propertiesthe Improvements, and the performance of any obligation of Borrower to Lender owed with respect theretoLender. Borrower hereby agrees that Lender (ia) shall have a security interest in any Borrower’s Deposit in any form to secure all of Borrower’s obligations under the Loan Instruments's Deposit, and (iib) may apply any proceeds of any Borrower’s 's Deposit for the purposes contemplated herein without any further consent or action on Borrower’s 's part. Lender shall not be required to pay interest on the such Borrower’s 's Deposit. Lender will disburse may advance all or a portion of the Borrower’s 's Deposit prior to any disbursement of any portion of the Loan Proceeds to complete Properties in the affected Approved Subdivision(s)proceeds. Borrower shall promptly notify Lender in writing if and when the cost of the construction of the Properties in an Approved Subdivision materially Improvements exceeds, or appears likely to materially exceed, the amounts budgeted therefor in the then-current Construction Cost-Breakdown for such Approved Subdivision. For purposes hereof, “materially” shall mean a variance of ten percent (10%) from the budgeted amounts for such item. (b) The Loan is in-balance whenever the amount of the undisbursed Loan Proceeds or availability under the Borrowing Base (taking into account Borrower’s compliance with the Construction Cost Breakdowns then in effect as to all Approved Subdivisions then included in the Borrowing Base), as applicable, plus any sums on deposit in the Borrower’s Deposit, are sufficient in the reasonable judgment of Lender to pay, through completion of the Properties, in accordance with the then-applicable Construction Cost Breakdowns for each Approved Subdivision then subject to a Mortgage and maturity of the Loan, all of the following sums (“In-Balance”): (i) All costs of construction, ownership and maintenance of the Properties; (ii) All costs of marketing and sale of the Properties (if this Loan Agreement contemplates such marketing and sale during the term of the Loan); and (iii) All interest and all other sums which may accrue or be payable under the Loan Instruments. (c) Failure unadvanced portion of the Loan to be In-Balance shall mean that and the Loan is out-of-balance (“Out-Of-Balance”); provided, however, Borrower shall have the right to submit revised Construction Cost Breakdowns for the Approved Projects in the Borrowing Base, which shall be subject to the approval of Lender, which, in the aggregate, shall bring the Loan In-Balance; (i) Borrower acknowledges that the Loan may become Out-Of-Balance in numerous ways, not all of which may now be foreseen. Borrower further acknowledges that the Loan may become Out-Of-Balance from a shortage of funds in any single line item or category unadvanced portion of the Construction Cost Breakdowns, even if there are undisbursed Loan Proceeds in other line items or categories. Undisbursed Loan Proceeds in one category or line item (e.g., construction costs) may not be applied to another category or line item (e.g., interest reserve) unless either the Construction Cost Breakdowns allow such use (and only to the extent specifically allowed) or Lender consents in writing to such use in each instanceBorrower's Deposit. (ii) Whenever the Loan becomes Out-Of-Balance, Lender may make written demand on Borrower to deposit Borrower’s own funds into Borrower’s Deposit in an amount sufficient, in Lender’s reasonable judgment, to cause the Loan to be In-Balance. Borrower must immediately deposit all funds required by Lender’s demand. Borrower must also submit, for Lender’s approval, revised Construction Cost Breakdowns as to all Approved Subdivisions affected thereby within fifteen (15) days after any such demand. Lender shall disburse all funds held in Borrower’s Deposit in the manner provided in this Loan Agreement for Disbursements of the Loan Proceeds.

Borrower’s Deposit. (a) With respect to If at any Approved Subdivisiontime Lender, if in Lender’s reasonable judgmentits sole discretion, there determines that the undisbursed proceeds of the Loan are insufficient funds remaining in to meet the Loan, or insufficient availability under the Borrowing Base, as applicable, for the completion costs of completing construction of the Properties in such Approved Subdivision Project in accordance with the then-effective Plans and any Governmental Requirements and thereafter, leasing and operating the Project in accordance with the Operating Agreement, including all costs covered by the Approved Construction Cost Breakdown for Budget and, to the extent not covered by such Approved Subdivision budget, the costs of insurance, ad valorem taxes and Borrower failsother costs incident to the construction contemplated by the Plans, within ten (10) business days of Lender’s delivery of notice Lender may refuse to make additional Advances to Borrower of Lender’s determination of until Borrower deposits with Lender aufficient additional funds ("Borrower's Deposit") to cover the existence of such insufficiency as deficiency which Lender deems to such Approved Subdivision, exist. Borrower agrees to submit a revised Construction Cost Breakdown for such Approved Subdivision addressing such apparent or actual insufficiency of funds, which Construction Cost Breakdown shall be acceptable in form and content to Lender’s satisfaction, and which takes into account make the Borrower’s compliance 's Deposit with all other Construction Cost Breakdowns then in effect as to all other Approved Subdivisions then included in the Borrowing Base, it shall constitute a Default hereunder. If Lender determines, based on its review of the revised Construction Cost Breakdown, together with such other information required in connection therewith by Lender, that the Loan will not be In-Balance (as defined below) after giving effect to such revised Construction Cost Breakdown, then in such case, Borrower shall deposit with Lender, within fifteen (15) days after of written demand therefor by Lender. The Borrower's Deposit will be disbursed by Lender to Borrower pursuant to the terms and conditions hereof as if it constituted a portion of the Loan being made hereunder, such sumsprovided, either however, Lender shall be entitled to disburse the Borrower's Deposit prior to advancing any of the Loan proceeds and the Borrower's Deposit actually disbursed by Lender for the purpose of paying construction cost overruns during the Construction Period (i.e., construction costs in excess of the amounts set forth in the form Approved Construction Budget) shall constitute a portion of cash or letter(s) Borrower's Equity Contribution. Any portion of credit acceptable to Lender (“Borrower’s Deposit”)'s Deposit disbursed for the purpose of paying Operating Expenses, as Lender may deem necessaryinterest, in addition principal with respect to the Loan, Loan or for the completion of the Properties in such Approved Subdivision, the payment of all costs in connection with the any purpose other than construction of such Properties, and the performance of any obligation of Borrower to Lender owed with respect thereto. Borrower hereby agrees that Lender (i) cost overruns shall have not constitute a security interest in any Borrower’s Deposit in any form to secure all portion of Borrower’s obligations under the Loan Instruments's Equity Contribution. Unless required by Governmental Requirements, and (ii) may apply any proceeds of any Borrower’s Deposit for the purposes contemplated herein without any further consent or action on Borrower’s part. Lender shall not be required to pay interest on the Borrower’s Borrowefs Deposit. Lender will disburse all or a portion of the Borrower’s Deposit prior to any disbursement of any portion of the Loan Proceeds to complete Properties in the affected Approved Subdivision(s). Borrower shall promptly notify Lender in writing if and when the cost of the construction of the Properties in an Approved Subdivision materially exceeds, or appears likely to materially exceed, the amounts budgeted therefor in the then-current Construction Cost-Breakdown for such Approved Subdivision. For purposes hereof, “materially” shall mean a variance of ten percent (10%) from the budgeted amounts for such item. (b) The Loan is in-balance whenever the amount of the undisbursed Loan Proceeds or availability under the Borrowing Base (taking into account Borrower’s compliance with the Construction Cost Breakdowns then in effect as to all Approved Subdivisions then included in the Borrowing Base), as applicable, plus any sums on deposit in the Borrower’s Deposit, are sufficient in the reasonable judgment of Lender to pay, through completion of the Properties, in accordance with the then-applicable Construction Cost Breakdowns for each Approved Subdivision then subject to a Mortgage and maturity of the Loan, all of the following sums (“In-Balance”): (i) All costs of construction, ownership and maintenance of the Properties; (ii) All costs of marketing and sale of the Properties (if this Loan Agreement contemplates such marketing and sale during the term of the Loan); and (iii) All interest and all other sums which may accrue or be payable under the Loan Instruments. (c) Failure of the Loan to be In-Balance shall mean that the Loan is out-of-balance (“Out-Of-Balance”); provided, however, Borrower shall have the right to submit revised Construction Cost Breakdowns for the Approved Projects in the Borrowing Base, which shall be subject to the approval of Lender, which, in the aggregate, shall bring the Loan In-Balance; (i) Borrower acknowledges that the Loan may become Out-Of-Balance in numerous ways, not all of which may now be foreseen. Borrower further acknowledges that the Loan may become Out-Of-Balance from a shortage of funds in any single line item or category of the Construction Cost Breakdowns, even if there are undisbursed Loan Proceeds in other line items or categories. Undisbursed Loan Proceeds in one category or line item (e.g., construction costs) may not be applied to another category or line item (e.g., interest reserve) unless either the Construction Cost Breakdowns allow such use (and only to the extent specifically allowed) or Lender consents in writing to such use in each instance. (ii) Whenever the Loan becomes Out-Of-Balance, Lender may make written demand on Borrower to deposit Borrower’s own funds into Borrower’s Deposit in an amount sufficient, in Lender’s reasonable judgment, to cause the Loan to be In-Balance. Borrower must immediately deposit all funds required by Lender’s demand. Borrower must also submit, for Lender’s approval, revised Construction Cost Breakdowns as to all Approved Subdivisions affected thereby within fifteen (15) days after any such demand. Lender shall disburse all funds held in Borrower’s Deposit in the manner provided in this Loan Agreement for Disbursements of the Loan Proceeds.

Borrower’s Deposit. (a) With respect to any Approved Subdivision, if in Lender’s 's reasonable judgment, there are insufficient funds remaining in the Loan, or insufficient availability under the Borrowing Base, as applicable, for the completion of the Properties in such Approved Subdivision in accordance with the then-effective Construction Cost Breakdown for such Approved Subdivision and Borrower fails, within ten (10) business days of Lender’s 's delivery of notice to Borrower of Lender’s 's determination of the existence of such insufficiency as to such Approved Subdivision, to submit a revised Construction Cost Breakdown for such Approved Subdivision addressing such apparent or actual insufficiency of funds, which Construction Cost Breakdown shall be acceptable in form and content to Lender’s 's satisfaction, and which takes into account Borrower’s 's compliance with all other Construction Cost Breakdowns then in effect as to all other Approved Subdivisions then included in the Borrowing Base, it shall constitute a Default hereunder. If Lender determines, based on its review of the revised Construction Cost Breakdown, together with such other information required in connection therewith by Lender, that the Loan will not be In-Balance (as defined below) after giving effect to such revised Construction Cost Breakdown, then in such case, Borrower shall deposit with Lender, within fifteen (15) days after demand by Lender, such sums, either in the form of cash or letter(s) of credit acceptable to Lender (“"Borrower’s 's Deposit”"), as Lender may deem necessary, in addition to the Loan, for the completion of the Properties in such Approved Subdivision, the payment of all costs in connection with the construction of such Properties, and the performance of any obligation of Borrower to Lender owed with respect thereto. Borrower hereby agrees that Lender (i) shall have a security interest in any Borrower’s 's Deposit in any form to secure all of Borrower’s 's obligations under the Loan Instruments, and (ii) may apply any proceeds of any Borrower’s 's Deposit for the purposes contemplated herein without any further consent or action on Borrower’s 's part. Lender shall not be required to pay interest on the Borrower’s 's Deposit. Lender will disburse all or a portion of the Borrower’s 's Deposit prior to any disbursement of any portion of the Loan Proceeds to complete Properties in the affected Approved Subdivision(s). Borrower shall promptly notify Lender in writing if and when the cost of the construction of the Properties in an Approved Subdivision materially exceeds, or appears likely to materially exceed, the amounts budgeted therefor in the then-current Construction Cost-Breakdown for such Approved Subdivision. For purposes hereof, “materially” shall mean a variance of ten percent (10%) from the budgeted amounts for such item. (b) The Loan is in-balance whenever the amount of the undisbursed Loan Proceeds or availability under the Borrowing Base (taking into account Borrower’s compliance with the Construction Cost Breakdowns then in effect as to all Approved Subdivisions then included in the Borrowing Base), as applicable, plus any sums on deposit in the Borrower’s Deposit, are sufficient in the reasonable judgment of Lender to pay, through completion of the Properties, in accordance with the then-applicable Construction Cost Breakdowns for each Approved Subdivision then subject to a Mortgage and maturity of the Loan, all of the following sums (“In-Balance”): (i) All costs of construction, ownership and maintenance of the Properties; (ii) All costs of marketing and sale of the Properties (if this Loan Agreement contemplates such marketing and sale during the term of the Loan); and (iii) All interest and all other sums which may accrue or be payable under the Loan Instruments. (c) Failure of the Loan to be In-Balance shall mean that the Loan is out-of-balance (“Out-Of-Balance”); provided, however, Borrower shall have the right to submit revised Construction Cost Breakdowns for the Approved Projects in the Borrowing Base, which shall be subject to the approval of Lender, which, in the aggregate, shall bring the Loan In-Balance; (i) Borrower acknowledges that the Loan may become Out-Of-Balance in numerous ways, not all of which may now be foreseen. Borrower further acknowledges that the Loan may become Out-Of-Balance from a shortage of funds in any single line item or category of the Construction Cost Breakdowns, even if there are undisbursed Loan Proceeds in other line items or categories. Undisbursed Loan Proceeds in one category or line item (e.g., construction costs) may not be applied to another category or line item (e.g., interest reserve) unless either the Construction Cost Breakdowns allow such use (and only to the extent specifically allowed) or Lender consents in writing to such use in each instance. (ii) Whenever the Loan becomes Out-Of-Balance, Lender may make written demand on Borrower to deposit Borrower’s own funds into Borrower’s Deposit in an amount sufficient, in Lender’s reasonable judgment, to cause the Loan to be In-Balance. Borrower must immediately deposit all funds required by Lender’s demand. Borrower must also submit, for Lender’s approval, revised Construction Cost Breakdowns as to all Approved Subdivisions affected thereby within fifteen (15) days after any such demand. Lender shall disburse all funds held in Borrower’s Deposit in the manner provided in this Loan Agreement for Disbursements of the Loan Proceeds.for

Borrower’s Deposit. If at any time Lender determines that the sum of (ai) With respect the unadvanced portion of the Loan to any Approved Subdivisionwhich Borrower is entitled, if plus (ii) the amounts of the Aggregate Cost which are scheduled to be paid by Borrower from other funds which are available, set aside and committed, to Lender's satisfaction, is or will be insufficient to pay the unpaid actual Aggregate Cost, Borrower shall, within seven (7) days after written notice from Lender, deposit with Lender the amount of the deficiency ("Borrower's Deposit") which Borrower's Deposit shall be deposited in Lender’s reasonable judgment, there are insufficient funds remaining in an interest-bearing account with interest earned thereon to be part of the Borrower's Deposit. Such Borrower's Deposit is hereby pledged as additional collateral on the Loan, or insufficient availability under the Borrowing Base, as applicable, for the completion of the Properties in such Approved Subdivision in accordance with the then-effective Construction Cost Breakdown for such Approved Subdivision and Borrower fails, within ten (10) business days of Lender’s delivery of notice to Borrower of Lender’s determination of the existence of such insufficiency as to such Approved Subdivision, to submit a revised Construction Cost Breakdown for such Approved Subdivision addressing such apparent or actual insufficiency of funds, which Construction Cost Breakdown shall be acceptable in form hereby grants and content to Lender’s satisfaction, and which takes into account Borrower’s compliance with all other Construction Cost Breakdowns then in effect as to all other Approved Subdivisions then included in the Borrowing Base, it shall constitute a Default hereunder. If Lender determines, based on its review of the revised Construction Cost Breakdown, together with such other information required in connection therewith by Lender, that the Loan will not be In-Balance (as defined below) after giving effect to such revised Construction Cost Breakdown, then in such case, Borrower shall deposit with Lender, within fifteen (15) days after demand by Lender, such sums, either in the form of cash or letter(s) of credit acceptable conveys to Lender (“Borrower’s Deposit”), as Lender may deem necessary, in addition to the Loan, for the completion of the Properties in such Approved Subdivision, the payment of all costs in connection with the construction of such Properties, and the performance of any obligation of Borrower to Lender owed with respect thereto. Borrower hereby agrees that Lender (i) shall have a security interest in any Borrower’s Deposit in any form to secure all of Borrower’s obligations under the Loan Instrumentsfunds so deposited with Lender, and (ii) may apply any proceeds of any Borrower’s Deposit for the purposes contemplated herein without any further consent or action on Borrower’s part. Lender shall not be required to pay interest as additional collateral on the Borrower’s DepositLoan. Upon a Default, Lender will disburse may (but shall have no obligation to) apply all or a portion any part of the Borrower’s 's Deposit prior to any disbursement of any portion of against the Loan Proceeds to complete Properties unpaid Indebtedness in the affected Approved Subdivision(s)such order as Lender determines. Borrower shall promptly notify Lender in writing if and when the cost of the construction of the Properties in an Approved Subdivision materially exceeds, or appears likely to materially exceed, the amounts budgeted therefor in the then-current Construction Cost-Breakdown for such Approved Subdivision. For purposes hereof, “materially” shall mean a variance of ten percent (10%) from the budgeted amounts for such item. (b) The Loan is in-balance whenever the amount of the undisbursed Loan Proceeds or availability under the Borrowing Base (taking into account Borrower’s compliance with the Construction Cost Breakdowns then in effect As long as to all Approved Subdivisions then included in the Borrowing Base), as applicable, plus any sums on deposit in the Borrower’s Deposit, are sufficient in the reasonable judgment of Lender to pay, through completion of the Properties, in accordance with the then-applicable Construction Cost Breakdowns for each Approved Subdivision then subject to a Mortgage and maturity of the Loan, all of the following sums (“In-Balance”): (i) All costs of construction, ownership and maintenance of the Properties; (ii) All costs of marketing and sale of the Properties (if this Loan Agreement contemplates such marketing and sale during the term of the Loan); and (iii) All interest and all other sums which may accrue or be payable under the Loan Instruments. (c) Failure of the Loan to be In-Balance shall mean that the Loan is out-of-balance (“Out-Of-Balance”); provided, howevercurrent and not in default, Borrower shall have the right to submit revised Construction Cost Breakdowns for elect whether the Approved Projects Borrower's Deposit shall be expended before any further Loan disbursements are made or in the Borrowing Basealternative, which whether said Borrower's Deposit shall continue to be subject to the approval of Lender, which, held in the aggregate, shall bring interest-bearing account until all Loan disbursements have been made by Lender and the Loan In-Balance; (i) Borrower acknowledges that Borrower's Deposit is necessary to complete the Loan may become Out-Of-Balance in numerous ways, not all of which may now be foreseen. Borrower further acknowledges that the Loan may become Out-Of-Balance from a shortage of funds in any single line item or category construction of the Construction Cost Breakdowns, even if there are undisbursed Loan Proceeds in other line items or categories. Undisbursed Loan Proceeds in one category or line item (e.g., construction costs) may not be applied to another category or line item (e.g., interest reserve) unless either the Construction Cost Breakdowns allow such use (and only to the extent specifically allowed) or Lender consents in writing to such use in each instanceProject. (ii) Whenever the Loan becomes Out-Of-Balance, Lender may make written demand on Borrower to deposit Borrower’s own funds into Borrower’s Deposit in an amount sufficient, in Lender’s reasonable judgment, to cause the Loan to be In-Balance. Borrower must immediately deposit all funds required by Lender’s demand. Borrower must also submit, for Lender’s approval, revised Construction Cost Breakdowns as to all Approved Subdivisions affected thereby within fifteen (15) days after any such demand. Lender shall disburse all funds held in Borrower’s Deposit in the manner provided in this Loan Agreement for Disbursements of the Loan Proceeds.

Borrower’s Deposit. (a) With respect to any Approved Subdivision, if in Lender’s reasonable judgment, there are insufficient funds remaining in the Loan, or insufficient availability under the Borrowing Base, as applicable, for the completion of the Properties in such Approved Subdivision in accordance with the then-effective Construction Cost Breakdown for such Approved Subdivision and Borrower fails, within ten (10) business days of Lender’s delivery of notice to Borrower of Lender’s determination of the existence of such insufficiency as to such Approved Subdivision, to submit a revised Construction Cost Breakdown for such Approved Subdivision addressing such apparent or actual insufficiency of funds, which Construction Cost Breakdown shall be acceptable in form and content to Lender’s satisfaction, and which takes into account Borrower’s compliance with all other Construction Cost Breakdowns then in effect as to all other Approved Subdivisions then included in the Borrowing Base, it shall constitute a Default hereunder. If Lender determines, based on its review of the revised Construction Cost Breakdown, together with such other information required in connection therewith by Lender, that the Loan will not be In-Balance (as defined below) after giving effect to such revised Construction Cost Breakdown, then in such case, Borrower shall deposit with Lender, within fifteen (15) days after demand by Lender, such sums, either in the form of cash or letter(s) of credit acceptable to Lender (“Borrower’s Deposit”), as Lender may deem necessary, in addition to the Loan, for the completion of the Properties in such Approved Subdivision, the payment of all costs in connection with the construction of such Properties, and the performance of any obligation of Borrower to Lender owed with respect thereto. Borrower hereby agrees that Lender (i) shall have a security interest in any Borrower’s Deposit in any form to secure all of Borrower’s obligations under the Loan Instruments, and (ii) may apply any proceeds of any Borrower’s Deposit for the purposes contemplated herein without any further consent or action on Borrower’s part. Lender shall not be required to pay interest on the Borrower’s Deposit. Lender will disburse all or a portion of the Borrower’s Deposit prior to any disbursement of any portion of the Loan Proceeds to complete Properties in the affected Approved Subdivision(s). Borrower shall promptly notify Lender in writing if and when the cost of the construction of the Properties in an Approved Subdivision materially exceeds, or appears likely to materially exceed, the amounts budgeted therefor in the then-current Construction Cost-Breakdown for such Approved Subdivision. For purposes hereof, “materially” shall mean a variance of ten percent (10%) from the budgeted amounts for such item. (b) The Loan is in-balance whenever the amount of the undisbursed Loan Proceeds or availability under the Borrowing Base (taking into account Borrower’s compliance with the Construction Cost Breakdowns then in effect as to all Approved Subdivisions then included in the Borrowing Base), as applicable, plus any sums on deposit in the Borrower’s Deposit, are sufficient in the reasonable judgment of Lender to pay, through completion of the Properties, in accordance with the then-applicable Construction Cost Breakdowns for each Approved Subdivision then subject to a Mortgage and maturity of the Loan, all of the following sums (“In-Balance”): (i) All costs of construction, ownership and maintenance of the Properties; (ii) All costs of marketing and sale of the Properties (if this Loan Agreement contemplates such marketing and sale during the term of the Loan); and (iii) All interest and all other sums which may accrue or be payable under the Loan Instruments. (c) Failure of the Loan to be In-Balance shall mean that the Loan is out-of-balance (“Out-Of-Balance”); provided, however, Borrower shall have the right to submit revised Construction Cost Breakdowns for the Approved Projects in the Borrowing Base, which shall be subject to the approval of Lender, which, in the aggregate, shall bring the Loan In-Balance; (i) Borrower acknowledges that the Loan may become Out-Of-Balance in numerous ways, not all of which may now be foreseen. Borrower further acknowledges that the Loan may become Out-Of-Balance from a shortage of funds in any single line item or category of the Construction Cost Breakdowns, even if there are undisbursed Loan Proceeds in other line items or categories. Undisbursed Loan Proceeds in one category or line item (e.g., construction costs) may not be applied to another category or line item (e.g., interest reserve) unless either the Construction Cost Breakdowns allow such use (and only to the extent specifically allowed) or Lender consents in writing to such use in each instance. (ii) Whenever the Loan becomes Out-Of-Balance, Lender may make written demand on Borrower to deposit Borrower’s own funds into Borrower’s Deposit in an amount sufficient, in Lender’s reasonable judgment, to cause the Loan to be In-Balance. Borrower must immediately deposit all funds required by Lender’s demand. Borrower must also submit, for Lender’s approval, revised Construction Cost Breakdowns as to all Approved Subdivisions affected thereby within fifteen (15) days after any such demand. Lender shall disburse all funds held in Borrower’s Deposit in the manner provided in this Loan Agreement for Disbursements of the Loan Proceeds.for

Borrower’s Deposit. If at any time Lender determines that the sum of (ai) With respect the unadvanced portion of the Loan to any Approved Subdivisionwhich Borrower is entitled, if plus (ii) the amounts of the Aggregate Cost which are scheduled to be paid by Borrower from other funds which are available, set aside and committed, to Lender's satisfaction, is or will be insufficient to pay the unpaid actual Aggregate Cost, Borrower shall, within seven (7) days after written notice from Lender, deposit with Lender the amount of the deficiency ("Borrower's Deposit") which Borrower's Deposit may, in Lender’s reasonable judgment's sole discretion, there are insufficient funds remaining be deposited in an interest-bearing account with interest earned thereon to be part of the Borrower's Deposit, or applied as Lender may otherwise require. Such Borrower's Deposit is hereby pledged as additional collateral on the Loan, or insufficient availability under the Borrowing Base, as applicable, for the completion of the Properties in such Approved Subdivision in accordance with the then-effective Construction Cost Breakdown for such Approved Subdivision and Borrower fails, within ten (10) business days of Lender’s delivery of notice to Borrower of Lender’s determination of the existence of such insufficiency as to such Approved Subdivision, to submit a revised Construction Cost Breakdown for such Approved Subdivision addressing such apparent or actual insufficiency of funds, which Construction Cost Breakdown shall be acceptable in form hereby grants and content to Lender’s satisfaction, and which takes into account Borrower’s compliance with all other Construction Cost Breakdowns then in effect as to all other Approved Subdivisions then included in the Borrowing Base, it shall constitute a Default hereunder. If Lender determines, based on its review of the revised Construction Cost Breakdown, together with such other information required in connection therewith by Lender, that the Loan will not be In-Balance (as defined below) after giving effect to such revised Construction Cost Breakdown, then in such case, Borrower shall deposit with Lender, within fifteen (15) days after demand by Lender, such sums, either in the form of cash or letter(s) of credit acceptable conveys to Lender (“Borrower’s Deposit”), as Lender may deem necessary, in addition to the Loan, for the completion of the Properties in such Approved Subdivision, the payment of all costs in connection with the construction of such Properties, and the performance of any obligation of Borrower to Lender owed with respect thereto. Borrower hereby agrees that Lender (i) shall have a security interest in any Borrower’s Deposit in any form to secure all of Borrower’s obligations under funds so deposited with Lender, as additional collateral on the Loan Instruments, and (ii) may apply any proceeds of any Borrower’s Deposit for the purposes contemplated herein without any further consent or action on Borrower’s partLoan. Lender shall not be required to pay interest on the Borrower’s Deposit. Lender will disburse may advance all or a portion of the Borrower’s 's Deposit prior to any disbursement of any portion of the Loan Proceeds to complete Properties in the affected Approved Subdivision(s)proceeds. Borrower shall promptly notify Lender in writing if and when the cost of the construction of the Properties in an Approved Subdivision materially exceeds, or appears likely to materially exceed, the amounts budgeted therefor in the then-current Construction Cost-Breakdown for such Approved Subdivision. For purposes hereof, “materially” shall mean Upon a variance of ten percent (10%) from the budgeted amounts for such item. (b) The Loan is in-balance whenever the amount of the undisbursed Loan Proceeds or availability under the Borrowing Base (taking into account Borrower’s compliance with the Construction Cost Breakdowns then in effect as to all Approved Subdivisions then included in the Borrowing Base), as applicable, plus any sums on deposit in the Borrower’s Deposit, are sufficient in the reasonable judgment of Lender to pay, through completion of the Properties, in accordance with the then-applicable Construction Cost Breakdowns for each Approved Subdivision then subject to a Mortgage and maturity of the Loan, all of the following sums (“In-Balance”): (i) All costs of construction, ownership and maintenance of the Properties; (ii) All costs of marketing and sale of the Properties (if this Loan Agreement contemplates such marketing and sale during the term of the Loan); and (iii) All interest and all other sums which may accrue or be payable under the Loan Instruments. (c) Failure of the Loan to be In-Balance shall mean that the Loan is out-of-balance (“Out-Of-Balance”); provided, however, Borrower shall have the right to submit revised Construction Cost Breakdowns for the Approved Projects in the Borrowing Base, which shall be subject to the approval of Lender, which, in the aggregate, shall bring the Loan In-Balance; (i) Borrower acknowledges that the Loan may become Out-Of-Balance in numerous ways, not all of which may now be foreseen. Borrower further acknowledges that the Loan may become Out-Of-Balance from a shortage of funds in any single line item or category of the Construction Cost Breakdowns, even if there are undisbursed Loan Proceeds in other line items or categories. Undisbursed Loan Proceeds in one category or line item (e.g., construction costs) may not be applied to another category or line item (e.g., interest reserve) unless either the Construction Cost Breakdowns allow such use (and only to the extent specifically allowed) or Lender consents in writing to such use in each instance. (ii) Whenever the Loan becomes Out-Of-BalanceDefault, Lender may make written demand on Borrower to deposit Borrower’s own funds into Borrower’s Deposit in an amount sufficient, in Lender’s reasonable judgment, to cause the Loan to be In-Balance. Borrower must immediately deposit (but shall have no obligation to) apply all funds required by Lender’s demand. Borrower must also submit, for Lender’s approval, revised Construction Cost Breakdowns as to all Approved Subdivisions affected thereby within fifteen (15) days after or any such demand. Lender shall disburse all funds held in Borrower’s Deposit in the manner provided in this Loan Agreement for Disbursements part of the Loan ProceedsBorrower's Deposit against the unpaid Indebtedness in such order as Lender determines.

Borrower’s Deposit. If at any time Lender determines that the sum of (ai) With respect the unadvanced portion of the Loan to any Approved Subdivisionwhich Borrower is entitled, if plus (ii) the amounts of c:\wp50\NBPLASMA.020\95.5042\081195\NBMISC#12\MJC\MS Construction Loan Agreement the Aggregate Cost which are scheduled to be paid by Borrower from other funds which are available, set aside and committed, to Lender's satisfaction, is or will be insufficient to pay the unpaid actual Aggregate Cost, Borrower shall, within seven (7) days after written notice from Lender, deposit with Lender the amount of the deficiency ("Borrower's Deposit") which Borrower's Deposit shallbe deposited in Lender’s reasonable judgment, there are insufficient funds remaining in an interest-bearing account with interest earned thereon to be part of the Borrower's Deposit. Such Borrower's Deposit is hereby pledged as additional collateral on the Loan, or insufficient availability under the Borrowing Base, as applicable, for the completion of the Properties in such Approved Subdivision in accordance with the then-effective Construction Cost Breakdown for such Approved Subdivision and Borrower fails, within ten (10) business days of Lender’s delivery of notice to Borrower of Lender’s determination of the existence of such insufficiency as to such Approved Subdivision, to submit a revised Construction Cost Breakdown for such Approved Subdivision addressing such apparent or actual insufficiency of funds, which Construction Cost Breakdown shall be acceptable in form hereby grants and content to Lender’s satisfaction, and which takes into account Borrower’s compliance with all other Construction Cost Breakdowns then in effect as to all other Approved Subdivisions then included in the Borrowing Base, it shall constitute a Default hereunder. If Lender determines, based on its review of the revised Construction Cost Breakdown, together with such other information required in connection therewith by Lender, that the Loan will not be In-Balance (as defined below) after giving effect to such revised Construction Cost Breakdown, then in such case, Borrower shall deposit with Lender, within fifteen (15) days after demand by Lender, such sums, either in the form of cash or letter(s) of credit acceptable conveys to Lender (“Borrower’s Deposit”), as Lender may deem necessary, in addition to the Loan, for the completion of the Properties in such Approved Subdivision, the payment of all costs in connection with the construction of such Properties, and the performance of any obligation of Borrower to Lender owed with respect thereto. Borrower hereby agrees that Lender (i) shall have a security interest in any Borrower’s Deposit in any form to secure all of Borrower’s obligations under the Loan Instrumentsfunds so deposited with Lender, and (ii) may apply any proceeds of any Borrower’s Deposit for the purposes contemplated herein without any further consent or action on Borrower’s part. Lender shall not be required to pay interest as additional collateral on the Borrower’s DepositLoan. Upon a Default, Lender will disburse may (but shall have no obligation to) apply all or a portion any part of the Borrower’s 's Deposit prior to any disbursement of any portion of against the Loan Proceeds to complete Properties unpaid Indebtedness in the affected Approved Subdivision(s)such order as Lender determines. Borrower shall promptly notify Lender in writing if and when the cost of the construction of the Properties in an Approved Subdivision materially exceeds, or appears likely to materially exceed, the amounts budgeted therefor in the then-current Construction Cost-Breakdown for such Approved Subdivision. For purposes hereof, “materially” shall mean a variance of ten percent (10%) from the budgeted amounts for such item. (b) The Loan is in-balance whenever the amount of the undisbursed Loan Proceeds or availability under the Borrowing Base (taking into account Borrower’s compliance with the Construction Cost Breakdowns then in effect As long as to all Approved Subdivisions then included in the Borrowing Base), as applicable, plus any sums on deposit in the Borrower’s Deposit, are sufficient in the reasonable judgment of Lender to pay, through completion of the Properties, in accordance with the then-applicable Construction Cost Breakdowns for each Approved Subdivision then subject to a Mortgage and maturity of the Loan, all of the following sums (“In-Balance”): (i) All costs of construction, ownership and maintenance of the Properties; (ii) All costs of marketing and sale of the Properties (if this Loan Agreement contemplates such marketing and sale during the term of the Loan); and (iii) All interest and all other sums which may accrue or be payable under the Loan Instruments. (c) Failure of the Loan to be In-Balance shall mean that the Loan is out-of-balance (“Out-Of-Balance”); provided, howevercurrent and not in default, Borrower shall have the right to submit revised Construction Cost Breakdowns for elect whether the Approved Projects Borrower's Deposit shall be expended before any further Loan disbursements are made or in the Borrowing Basealternative, which whether said Borrower's Deposit shall continue to be subject to the approval of Lender, which, held in the aggregate, shall bring interest- bearing account until all Loan disbursements have been made by Lender and the Loan In-Balance; (i) Borrower acknowledges that Borrower's Deposit is necessary to complete the Loan may become Out-Of-Balance in numerous ways, not all of which may now be foreseen. Borrower further acknowledges that the Loan may become Out-Of-Balance from a shortage of funds in any single line item or category construction of the Construction Cost Breakdowns, even if there are undisbursed Loan Proceeds in other line items or categories. Undisbursed Loan Proceeds in one category or line item (e.g., construction costs) may not be applied to another category or line item (e.g., interest reserve) unless either the Construction Cost Breakdowns allow such use (and only to the extent specifically allowed) or Lender consents in writing to such use in each instanceProject. (ii) Whenever the Loan becomes Out-Of-Balance, Lender may make written demand on Borrower to deposit Borrower’s own funds into Borrower’s Deposit in an amount sufficient, in Lender’s reasonable judgment, to cause the Loan to be In-Balance. Borrower must immediately deposit all funds required by Lender’s demand. Borrower must also submit, for Lender’s approval, revised Construction Cost Breakdowns as to all Approved Subdivisions affected thereby within fifteen (15) days after any such demand. Lender shall disburse all funds held in Borrower’s Deposit in the manner provided in this Loan Agreement for Disbursements of the Loan Proceeds.