THE PROPERTY AND TO CONDUCT SUCH INSPECTIONS THEREOF AS THEY SHALL DEEM
NECESSARY OR DESIRABLE FOR THE PROTECTION OF LENDER'S INTERESTS.
(B)
CONSULTANTS.
LENDER MAY RETAIN ANY CONSULTANTS DEEMED
NECESSARY OR DESIRABLE BY LENDER, AT BORROWER'S EXPENSE, TO MAKE PERIODIC
INSPECTIONS OF THE PROPERTY.
LENDER MAY ALSO RETAIN SUCH OTHER CONSULTANTS AS
LENDER DEEMS NECESSARY OR CONVENIENT TO PERFORM SUCH SERVICES AS MAY, FROM TIME
TO TIME, BE REQUIRED BY LENDER IN CONNECTION WITH THE LOAN, THIS AGREEMENT, THE
OTHER LOAN DOCUMENTS OR THE PROPERTY.
(C)
NO RELIANCE BY BORROWER OR THIRD PARTY.
NEITHER BORROWER NOR
ANY THIRD PARTY SHALL HAVE THE RIGHT TO USE OR RELY UPON ANY REPORTS GENERATED
BY LENDER OR ITS CONSULTANTS FOR ANY PURPOSE WHATSOEVER.
3.3
LENDER RESPONSIBILITY.
IT IS EXPRESSLY UNDERSTOOD AND AGREED THAT
LENDER ASSUMES NO LIABILITY OR RESPONSIBILITY FOR PROTECTION OF THE PROPERTY, OR
FOR ANY REPRESENTATIONS MADE BY BORROWER.
3.4
DIRECT APPLICATION OF PROCEEDS.
LENDER SHALL HAVE THE RIGHT, BUT
NOT THE OBLIGATION, TO DISBURSE AND DIRECTLY APPLY THE PROCEEDS OF ANY PORTION
OF THE LOAN AMOUNT TO THE SATISFACTION OF ANY OF BORROWER'S OBLIGATIONS
HEREUNDER OR UNDER THE OTHER LOAN DOCUMENTS.
10
ANY ADVANCE BY LENDER FOR SUCH PURPOSE SHALL BE PART OF THE LOAN AND SHALL BE
EVIDENCED AND SECURED BY THE LOAN DOCUMENTS.
LENDER MAY ADVANCE SUCH FUNDS AND
INCUR SUCH EXPENSES AS LENDER DEEMS NECESSARY TO PRESERVE THE PROPERTY AND ANY
SECURITY FOR THE LOAN, AND SUCH EXPENSES, EVEN THOUGH IN EXCESS OF THE AMOUNT OF
THE LOAN, SHALL BE SECURED BY ANY AND ALL DOCUMENTS SECURING THE LOAN AND THE
NOTE AND SHALL BE PAYABLE TO LENDER UPON DEMAND.
3.5
INSUFFICIENT DOCUMENTATION.
IN THE EVENT THAT LENDER SHALL
DETERMINE, IN ITS REASONABLE JUDGMENT, THAT PROPER DOCUMENTATION TO SUPPORT
DISBURSEMENT OF THE LOAN AMOUNT, AS REQUIRED BY THIS AGREEMENT, HAS NOT BEEN
FURNISHED, IT MAY WITHHOLD PAYMENT OF THE LOAN AMOUNT AS SHALL NOT BE SO
SUPPORTED BY PROPER DOCUMENTATION, AND SHALL PROMPTLY NOTIFY BORROWER OF THE
DISCREPANCY IN OR OMISSION OF SUCH DOCUMENTATION.
UNTIL SUCH TIME AS SUCH
DISCREPANCY OR OMISSION IS CORRECTED TO THE SATISFACTION OF LENDER, IT MAY
WITHHOLD DISBURSEMENT OF THE LOAN AMOUNT.
IV.
REPRESENTATIONS AND WARRANTIES OF LENDER AND BORROWER
4.1
REPRESENTATIONS AND WARRANTIES OF BORROWER.
AS AN INDUCEMENT TO
LENDER TO EXECUTE THIS AGREEMENT AND TO DISBURSE THE PROCEEDS OF THE LOAN,
BORROWER REPRESENTS AND WARRANTS TO LENDER THAT:
(A)
LEGAL STATUS OF BORROWER.
BORROWER IS A CORPORATION DULY
ORGANIZED, VALIDLY EXISTING AND IN GOOD STANDING UNDER THE LAWS OF THE STATE OF
CALIFORNIA.
(B)
TITLE.
BORROWER IS THE OWNER, IN FEE SIMPLE, OF THE LAND AND
THE IMPROVEMENTS, SUBJECT TO NO LIEN, CHARGE, MORTGAGE, DEED OF TRUST,
RESTRICTION OR ENCUMBRANCE, EXCEPT PERMITTED ENCUMBRANCES.
(C)
NO BREACH OF APPLICABLE AGREEMENTS OR LAWS.
SUBJECT TO
OBTAINING THE APPROVAL OF THE BANKRUPTCY COURT, THE CONSUMMATION OF THE
TRANSACTIONS CONTEMPLATED HEREBY AND THE EXECUTION, DELIVERY AND/OR PERFORMANCE
OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS WILL NOT RESULT IN ANY BREACH OF
OR