|
06-27-1993 CONSTRUCTION LOAN AGREEN~IT page 4
<br />. Loan No 700007062 (Continued)
<br />an all risks course of construction insurance policy covering the Improvements issued in an amount and by a company acceptable to Lenc ~sr,
<br />containing a loss payable or other endorsement satisfactory to Lender insuring Lender as mortgagee, together with such other endorsemenk~ as
<br />may be required by Lender, including stipulations that coverages will not be cancelled or diminished without at least ten (10) days' prior wril'en
<br />notice to Lender; (b) flood insurance if required by Lender or applicable law; and (c) all other insurance required by this Agreement or by the
<br />Related Documents.
<br />Payment of Fees and Expenses. Borrower shall have paid to Lender all expenses specified in this Agreement as are then due and payable.
<br />Satlefaclory Conatructlon. Ali work usually done at the stage of construction for which disbursement is requested shall have been done i' r a
<br />good end workmanlike manner and all materials and fixtures usually furnished and installed at that stage of construction shall have been furnisl eel
<br />and installed, all in compliance with the Plans and Specifications. Borrower shall also have furnished to Lender such proofs as Lender n ~sy
<br />require to establish the progress of the work, compliance wffh applicable laws, freedom of the Property from hens, and the basis for the regt~ eel
<br />disbursement.
<br />Certification. Borrower shall have furnished to Lender a certification by an engineer, architect, or other qualified inspector acceptable to Len ley
<br />that the construction of the Improvements has complied and will continue to comply with all applicable statutes, ordinances, codes, regulafio ~~s,
<br />and similar requirements.
<br />Lien Wdvers. Borrower shall have obtained and attached to each application for an Advance, including the Advance to cover final payment to
<br />the general contractor, executed acknowledgments of payments of all sums due and releases of mechanic's and materialmen's liens, satisfacft rry
<br />to Lender, from any party having lien rights, which acknowledgments of payment and releases of liens shall cover all work, labor, equipme nt,
<br />materials done, supplied, performed, or furnished prior to such application for an Advance.
<br />Lade of Default. There shall not exist at the time of any Advance a condition which would constitute an Event of Default under this Agreement.
<br />DISBURSEMENT OF LOAN PROCEEDS. The following provisions relate to the disbursement of funds from the Loan Fund.
<br />Application for Advances. Borrower shall apply for Advances from the Loan Fund according to the following disbursement schedi le:
<br />MONTFLY DRAW REQUEST.
<br />Each application shall be stated on a standard AIA payment request form or other form approved by Lender, executed by Borrower, :r •rd
<br />supported by such evidence as Lender shall reasonably require. Borrower shall apply only for disbursement with respect to work actually done by
<br />the general contractor and for materials and equipment actualy incorporated into the Project Each application for an Advance shall be deeme~ I a
<br />certification of Borrower that as of the date of such application, all representations and warranties contained in the Agreement are true and Corr« rt,
<br />and that Borrower is in compliance with all of the provisions of this Agreement.
<br />Loan To Value. Unless waived by Lender in writing, the ratio of the amount of the Loan to the value of the Property as completed shall riot
<br />exceed 81.00096. The term balue" as used herein shall be defined by Lender in its sole discretion unless agreed to the contrary by Lender in
<br />writing.
<br />Payments. At the sole option of Lender, Advances may be paid in the joint names of Borrower and the general contractor, subcontractor(s), nor
<br />supplier(s) in payment of sums due under the Construction Contract. At its sole option, Lender may directly pay the general contractor and ~: ny
<br />subcontractors or other parties the sums due under the Construction Contract. Borrower appoints Lender as its attorney-in-fact to make si. ;:h
<br />payments. This power shall be deemed to be coupled with an interest, shall be irrevocable, and shall survive an Event of Default under 'I vie
<br />Agreement.
<br />Projected Cost Overruns. If Lender at any time determines in its sole discretion that the amount in the Loan Fund is insufficient, or will ae
<br />insuffictient, to complete fully and to pay for the Project, then within ten (10) days after receipt of a written request and supporting documental an
<br />from Lender, Borrower shall deposit in the Loen Fund an amount equal to the deficiency as determined by Lender. The judgment a ~rd
<br />determination of Lender under this section shall be final and conclusive.
<br />Flnal Payment to tieneral Contractor. Upon completion of the Project and fulfillment of the Construction Contract to the satisfaction of Lenr ~
<br />and provided sufficient Loan Funds are available, Lender shall make an Advance to cover the final payment due to the general contractor ui~ :rn
<br />delivery to Lender of endorsements to the ALTA title insurance policy following the posting of the completion notice, as provided under applical ale
<br />law. Construction shall not be deemed complete for purposes of final disbursement unless and until Lender shall have received all of 1.re
<br />fofiowing:
<br />(a) Evidence satisfactory to Lender that all work under the Construction Contract requiring inspection by any governmental authority w rth
<br />jurisdiction has been duly inspected and approved by such authority, that a certificate of occupancy has been issued, and that all part rrs
<br />performing work have been paid, or will be paid, for such work;
<br />(b) A certification by an engineer, architect, or other qualified inspector acceptable to Lender that the Improvements have been complet sad
<br />substantially in axordance with the Plans and Specifications and the Construction Contract, that direct connection has been made to all
<br />utilities set forth in the Plans and Specifications, and that the Project is ready for occupancy; and
<br />(c) Acceptar-ce of the completed Improvements by Lender and Borrower.
<br />Construction Default. If Borrower fails in any respect to comply with the provisions of this Agreement or if construction ceases before compleii an
<br />regardless of the reason, Lender, at its option, may refuse to make further Advances, may accelerate the indebtedness under the terms of I •ie
<br />Note, and without thereby impairing any of its rights, powers, or privileges, may enter into possession of the construction site and perform or cal, s's
<br />to be performed any and all work and labor necessary to complete the improvements, substantially in accordance with the Plans a !~d
<br />Specifications.
<br />Damage of Destruction. if any of the Property or Improvements is damaged or destroyed by casualty of any nature, within sixty (sop d.: ys
<br />thereafter Borrower shall restore the Property and Improvements to the condition in which they were before such damage or destruction w 11h
<br />funds other than those in the Loan Fund. Lender shall not be obligated to make disbursements under this Agreement until such restoration t :ts
<br />been axomplished.
<br />Right to Advance Funds. When any event occurs that Lender determines may endanger completion of the Project or the fulfillment of F3 pry
<br />condition or covenant in this Agreement, Lender may require Borrower to furnish, within ten (10) days after delivery of a written request, adequ+ to
<br />security to eliminate, reduce, or indemnify Lender against, such danger. In addition, upon such occurrence, Lender in its sole discretion n' spy
<br />advance funds or agree to undertake to advance funds to any party to eliminate, reduce, or indemnify Lender against, such danger or to comply to
<br />the Project. All sums paid by Lender pursuant to such agreements or undertakings shall be for Borrower's account and shall be without prejudi ^s
<br />to Borrower's rights, if any, to receive such funds from the party to whom paid. All sums expended by Lender in the exercise of its option .'o
<br />complete the Project or protect Lender's interests shall be payable to Lender on demand together with interest from the date of the Advance at I .~
<br />rate applicable to the Loan. In addition, any Advance of funds under this Agreement, including without limitation direct disbursements to I ~~e
<br />general contractor or other parties in payment of sums due under the Construction Contract, shall be deemed to have been expended by or :.n
<br />behalf of Borrower and to have been secured by the Mortgage or Deed of Trust on the Property.
<br />
|