TO LENDER OF RECOVERING AND PAYING OUT SUCH PROCEEDS,
INCLUDING, WITHOUT LIMITATION, REASONABLE ATTORNEYS' FEES AND COSTS ALLOCABLE TO
INSPECTING THE WORK AND THE PLANS AND SPECIFICATIONS THEREFOR) SUBJECT TO
SECTION 5.13 HEREOF AND TO ALL OF THE FOLLOWING CONDITIONS:
(I)
AN INDEPENDENT ARCHITECT OR ENGINEER SELECTED BY BORROWER AND
REASONABLY ACCEPTABLE TO LENDER (AN "ARCHITECT" OR "ENGINEER") OR A PERSON
OTHERWISE REASONABLY ACCEPTABLE TO LENDER, SHALL HAVE DELIVERED TO LENDER A
CERTIFICATE ESTIMATING THE COST OF COMPLETING THE WORK, AND, IF THE AMOUNT SET
FORTH THEREIN IS MORE THAN THE SUM OF THE AMOUNT OF INSURANCE PROCEEDS THEN
BEING HELD BY LENDER IN CONNECTION WITH A CASUALTY AND AMOUNTS AGREED TO BE PAID
AS PART OF A FINAL SETTLEMENT UNDER THE INSURANCE POLICY UPON OR BEFORE
COMPLETION OF THE WORK, BORROWER SHALL HAVE DELIVERED TO LENDER (A) CASH
COLLATERAL IN AN AMOUNT EQUAL TO SUCH EXCESS, (B) AN UNCONDITIONAL, IRREVOCABLE,
CLEAN SIGHT DRAFT LETTER OF CREDIT, IN FORM, SUBSTANCE AND ISSUED BY A BANK
REASONABLY ACCEPTABLE TO LENDER, IN THE AMOUNT OF SUCH EXCESS AND DRAWS ON SUCH
LETTER OF CREDIT SHALL BE MADE BY LENDER TO MAKE PAYMENTS PURSUANT TO THIS
ARTICLE III FOLLOWING EXHAUSTION OF THE INSURANCE PROCEEDS OR CONDEMNATION
PROCEEDS, AS APPLICABLE, THEREFOR OR (C) A COMPLETION BOND IN FORM, SUBSTANCE
AND ISSUED BY A SURETY COMPANY REASONABLY ACCEPTABLE TO LENDER.
(II)
IF THE COST OF THE WORK IS REASONABLY ESTIMATED BY AN ARCHITECT
OR ENGINEER IN A CERTIFICATION REASONABLY ACCEPTABLE TO LENDER TO BE EQUAL TO OR
EXCEED FIVE PERCENT (5%) OF THE LOAN AMOUNT, SUCH WORK SHALL BE PERFORMED UNDER
THE SUPERVISION OF AN ARCHITECT OR ENGINEER, IT BEING UNDERSTOOD THAT THE PLANS
AND SPECIFICATIONS WITH RESPECT THERETO SHALL PROVIDE FOR WORK SO THAT, UPON
COMPLETION THEREOF, THE PROPERTY SHALL BE AT LEAST EQUAL IN REPLACEMENT VALUE
AND GENERAL UTILITY TO THE PROPERTY PRIOR TO THE DAMAGE OR DESTRUCTION.
(III)
EACH REQUEST FOR PAYMENT SHALL BE MADE ON NOT LESS THAN TEN (10)
DAYS' PRIOR NOTICE TO LENDER AND SHALL BE ACCOMPANIED BY A CERTIFICATE OF AN
ARCHITECT OR ENGINEER, OR, IF THE WORK IS NOT REQUIRED TO BE SUPERVISED BY AN
ARCHITECT OR ENGINEER, BY AN OFFICER'S CERTIFICATE STATING (A) THAT PAYMENT IS
FOR WORK COMPLETED IN MATERIAL
66
COMPLIANCE WITH THE PLANS AND SPECIFICATIONS, IF REQUIRED UNDER CLAUSE (II)
ABOVE, (B) THAT THE SUM REQUESTED IS REQUIRED TO REIMBURSE BORROWER FOR PAYMENTS
BY BORROWER TO DATE, OR IS DUE TO THE CONTRACTORS, SUBCONTRACTORS, MATERIALMEN,
LABORERS, ENGINEERS, ARCHITECTS OR OTHER PERSONS RENDERING SERVICES OR MATERIALS
FOR THE WORK (GIVING A BRIEF DESCRIPTION OF SUCH SERVICES AND MATERIALS), AND
THAT WHEN ADDED TO ALL SUMS PREVIOUSLY PAID OUT BY LENDER DOES NOT EXCEED THE
VALUE OF THE WORK DONE TO THE DATE OF SUCH CERTIFICATE, (C) IF THE SUM REQUESTED
IS TO COVER PAYMENT RELATING TO REPAIR AND RESTORATION OF PERSONAL PROPERTY
REQUIRED OR RELATING TO THE PROPERTY, THAT TITLE TO THE PERSONAL PROPERTY ITEMS
COVERED BY THE REQUEST FOR PAYMENT IS VESTED