|
3.06 Liens and Stop Notices. If o claim of lien is recorded affecting the Property or Improvements or a bonded stop
<br />.itice is served upon Lender which affects the Loon or Borrower's Funds, Borrower shall, within twenty (20) doys of such
<br />recording or service or within five (5) days of Lender's demand (whichever lost occurs); (a) pay and discharge the some; or (b)
<br />effect the release thereof by recording or delivering to Lender o surety bond in sufficient form and amount, or otherwise; or
<br />(c) provide Lender with other assuronce which Lender deems, in its sole discretion, to be sotisfoctory for the payment of such
<br />lien or bonded stop notice and for the full and continuous protection of Lender from the effect of such lien or bonded stop
<br />notice.
<br />3.07 Construction Responsibilities. Borrower shall be solely responsible for all aspects of Borrower's business and
<br />conduct in connection with the Property and Improvements, including but not limited to the quality and suitability of the Pions
<br />and Specifications and their compliance with the Requirements, the supervision of the work of construction, the
<br />qualifications, financiol condition and performance of all architects, engineers, controctors, material suppliers, consultants
<br />and property managers, and the accuracy of all applications for poyment and the proper application of all disbursements.
<br />Lender is not obligated to supervise, inspect or inform Borrower or any third party of any aspect of the construction of the
<br />Improvements or any other molter referred to above. Any inspection or review by Lender is to determine whether Borrower is
<br />properly discharging its obligations to Lender and may not be relied upon by Borrower or any third porty. Lender owes no duty
<br />of core to Borrower or ony third party to protect ogainst, or to inform Borrower or ony third porty of, any negligent, faulty,
<br />inadequate or defective design or construction of the Improvements.
<br />3.08 Improvement District. Without Lender's prior written consent, Borrower shall not, directly or indirectly, ad-
<br />vocate or assist in the incorporation of any of the Property or Improvements into any improvement or other assessment
<br />district.
<br />3.09 Delay. Borrower shall promptly notify Lender in writing of any event causing delay or interruption of con-
<br />struction, or the timely completion of construction. The notice shall specify the particular work delayed, and the couse and
<br />period of each delay.
<br />3.10 Surveys. At Lender's request, Borrower shall deliver to Lender: (a) o perimeter survey of the Property; (b) upon
<br />completion of the foundations of the Improvements, a survey showing the location of the Improvements on the Property and
<br />showing thot the Improvements ore locoted entirely within the Property and do not encrooch upon any easement, or breach
<br />or violate any of the Requirements; and (c) upon completion of the Improvements, on as -built survey acceptable to a title
<br />insurer for purposes of issuing on ALTA policy of title insurance. All such surveys shall be mode and certified by a licensed
<br />engineer or surveyor.
<br />ARTICLE IV.
<br />Insurance
<br />or 1984
<br />4.01 Title Insurance. Borrower shall procure from a title insurer a 19704P -10 ALTA Lender's Policy of Title Insurance
<br />("Title Policy "), with ony indorsements Lender may require, insuring Lender in the principol amount of the Loan, of the
<br />validity and the priority of the lien of the Deed of Trust upon the Property and Improvements, subject only to matters opproved
<br />by Lender in writing. During the term of the Loon, Borrower shall procure and deliver to Lender, within five (5) days of Len-
<br />der's request, other indorsements to the Title Policy as Lender may require.
<br />4.02 Hazard Insurance. Borrower shall procure and maintain o policy of Builders Risk Completed Value hazard
<br />insurance, with a vandalism and malicious mischief indorsement and other indorsements as Lender may require, in an
<br />amount occeptoble to Lender. Lender shall be named under a Lender's loss Poyable Endorsement (form N438BFU) attached to
<br />the policy. At Lender's request, the policy shall contain on ogreed value clause sufficient (as determined by Lender) to
<br />eliminate any risk of co-insuronce.
<br />4.03 Liability Insurance. Borrower shall procure and maintain o policy of comprehensive public liability insurance
<br />and property damage insurance with limits as required by Lender, insuring ogainst liobility for injury or deoth to any person
<br />-Ind property domoge occurring on the Property or in the Improvements from any couse whatsoever. The policy shall name
<br />ender as on additional insured.
<br />4.04 Blanket Coverage. Lender may accept, at its option, blonket insurance policies in satisfaction of Borrower's
<br />obligations to provide insuronce.
<br />4.05 General. Borrower shall procure and maintain all other insurance required by the Requirements, Article VIII or
<br />applicable low. Lender shall receive the originals of all required insurance policies, or other evidence of insurance oc-
<br />ceptoble to Lender. Borrower shall mointoin all required insurance until the Loon is repaid. All insurance policies shall
<br />provide that the insurance shall not be concelloble or materially changed without thirty (30) doys prior written notice to
<br />Lender. All insuronce policies shall be issued by licensed insurance companies occeptoble to Lender.
<br />ARTICLE V;
<br />Representations and Warranties
<br />Borrower makes the following representations and warranties as of the Effective Dote and continuing thereafter:
<br />5.01 Authority. If other thon an individuol, Borrower has complied with all lows and regulations concerning its
<br />orgonizotion, existence and tronsoction of business. Borrower has the right and power to own and develop the Property and
<br />Improvements as contemploted in the Loon Documents. Borrower hos, or of all appropriate times shall hove, properly ob-
<br />Coined all permits, licenses and approvals necessory to construct, occupy, operate and market the Improvements, and
<br />complied with the Requirements and oil other applicable statutes, lows, regulations and ordinances.
<br />—3—
<br />
|