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2.04 Pledg• and Assignment. As security for Borrower's per♦ormonc;: under ttte Loan Lo_um•ents. Borrower
<br />evocobly pledges and assigns to Lender all monies at any time deposited in the Accountant! trio$orroirr--'c Funds Account.
<br />2.05 Disbursement. Subject to the conditions set forth in Section 2.01, the proceeds of the Loon ond Borrower's Funds
<br />toll be disbursed in occordonce with Exhibit E. Disbursements mode after the deposit of Borrower's Funds shall be mode
<br />om Borrower's Funds until depleted.
<br />2.06 Disbursed Funds. All disbursements shall be held by Borrower in trust ond applied by Borrower solely for the
<br />>urposes for which the funds hove been disbursed. Lender is not obligated to monitor or determine Borrower's use or op-
<br />;lication of the disbursements.
<br />ARTICLE I11.
<br />Construction
<br />3.01 Commencement and Completion. Borrower shall promptly commence construction of the Improvements when,
<br />but not before, commencement is authorized by Article VIII, and shall diligently continue construction to completion within
<br />the time stated in Article Ill.
<br />3.02 Construction. Borrower sholl construct the Improvements in a workmanlike manner occording to the Plans ond
<br />Specifications and the recommendations of any soils or engineering report opproved by Lender. In constructing the Im-
<br />provements, Borrower sholl comply with all applicable lows, ordinances, rules, regulations, building restrictions, recorded
<br />covenants and restrictions, and requirements of all regulatory authorities having jurisdiction over the Improvements or
<br />Property (collectively "Requirements "). If necessary, the Plans ond Specifications shall be modified to comply with the
<br />Requirements, subject to the provisions of Section 3.03 below.
<br />3.03 dons and Specifications. Except os otherwise provided in Article VIII, there shall be no change in the Pions and
<br />Specifications without Lender's prior written approval. Requests for opprovol shall be submitted on o change order form
<br />occeptoble to Lender signed by Borrower ond, if required by Lender, the project architect ond the generol contractor (if any),
<br />accompanied by working drowings and o written narrative of the proposed change. As conditions to its approval, (a) Lender
<br />may require satisfactory evidence of the cost of the proposed change and the time necessary to complete the proposed
<br />change, ond (b) to the extent Lender determines that the proposed change shall result in increosed cost, Lender moy require
<br />Borrower to deposit the amount of the increased cost into the Borrower's funds Account in occordonce with Section 2.01(6).
<br />Borrower acknowledges that this opprovol process moy result in delays. Upon Lender's request, Borrower, the project or-
<br />chitect, and the general contractor (if any), sholl initiol the copy of the Pions and Specifications delivered to, and opproved
<br />by, Lender as a true copy of the plans ond specifications for the Improvements. Borrower sholl maintain at all times o full set
<br />of working drawings for the Improvements available for inspection by Lender. Within ten (10) doys of Lender's request,
<br />Borrower shall deliver to Lender complete os -built plans ond specifications for the completed Improvements.
<br />3.04 Construction Information; Inspections. From time to time, and within ten (10) days of receipt from Lender of o
<br />request therefore, Borrower sholl deliver to Lender:
<br />(a) o complete list stoting (i) the name, address ond phone number of each controctor, subcontractor and material
<br />supplier to be employed or used for construction of the Improvements, and (ii) the doilor amount, including changes if any, of
<br />each contract ond subcontract, and the portion thereof, if any, paid through the dote of such list; and
<br />(b) copies of eoch contract and subcontract identified in such list, including any changes thereto; ond
<br />(c) o cost breakdown, in a form acceptable to Lender, stating the projected total cost of constructing the Im.
<br />provements, and thot portion, if any, of eoch cost item (i) which hos been incurred, and (ii) which has been paid, all as of the
<br />date of such cost breakdown; and
<br />(d) a construction progress schedule, in a form occeptoble to Lender, showing the progress of construction and the
<br />projected sequencing and completion time for uncompleted work, all as of the date of such schedule; and
<br />(e) with respect to ony item designoted above which hos been previously delivered, such update thereof os Lender
<br />may request.
<br />Lender is expressly authorized to contact any contractor, subcontroctor or material supplier and, at all reasonable times, to
<br />enter the Property and inspect the Improvements ond the work of construction in order to verify information disclosed pur-
<br />suant to this Section, or for any other purpose.
<br />3.05 Prohibited Contracts. Without Lender's prior written consent, Borrower shall not contract for ony materials,
<br />furnishings, equipment, fixtures or other parts or components of the Improvements, or other property for the use or oc-
<br />cupancy of the Property or Improvements, if ony third party retains or purports to retain any interest (other thon lien rights, if
<br />any, created by operotion of low) in such items after their delivery to the Property. Borrower shall hove five (5) days to effect
<br />the removal of ony such retained interest.
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