AS TO ANY PERSONAL PROPERTY COVERED
BY THE REQUEST FOR PAYMENT, LENDER SHALL BE FURNISHED WITH EVIDENCE OF HAVING
INCURRED A PAYMENT OBLIGATION THEREFOR AND SUCH FURTHER EVIDENCE REASONABLY
SATISFACTORY TO ASSURE LENDER THAT UCC FILINGS THEREFOR PROVIDE A VALID FIRST
LIEN ON THE PERSONAL PROPERTY.
(V)
LENDER SHALL HAVE THE RIGHT TO INSPECT THE WORK AT ALL REASONABLE TIMES
UPON REASONABLE PRIOR NOTICE AND MAY CONDITION ANY DISBURSEMENT OF INSURANCE
PROCEEDS UPON SATISFACTORY COMPLIANCE BY BORROWER WITH THE PROVISIONS HEREOF.
NEITHER THE APPROVAL BY LENDER OF ANY REQUIRED PLANS AND SPECIFICATIONS FOR THE
WORK NOR THE INSPECTION BY LENDER OF THE WORK SHALL MAKE LENDER RESPONSIBLE FOR
THE PREPARATION OF SUCH PLANS AND SPECIFICATIONS, OR THE COMPLIANCE OF SUCH
PLANS AND SPECIFICATIONS OF THE WORK, WITH ANY APPLICABLE LAW, REGULATION,
ORDINANCE, COVENANT OR AGREEMENT.
(VI)
INSURANCE PROCEEDS SHALL NOT BE DISBURSED MORE FREQUENTLY THAN ONCE
EVERY THIRTY (30) DAYS.
(VII)
UNTIL SUCH TIME AS THE WORK HAS BEEN SUBSTANTIALLY COMPLETED, LENDER
SHALL NOT BE OBLIGATED TO DISBURSE UP TO TEN PERCENT (10%) OF THE COST OF THE
WORK (THE "RETENTION AMOUNT") TO BORROWER. UPON SUBSTANTIAL COMPLETION OF THE
WORK, BORROWER SHALL SEND NOTICE THEREOF TO LENDER AND, SUBJECT TO THE
CONDITIONS OF SECTION 3.04(B)(I)-(IV), LENDER SHALL DISBURSE ONE-HALF OF THE
RETENTION AMOUNT TO BORROWER; PROVIDED, HOWEVER, THAT THE REMAINING ONE-HALF OF
THE RETENTION AMOUNT SHALL BE DISBURSED TO BORROWER WHEN LENDER SHALL HAVE
RECEIVED COPIES OF ANY AND ALL FINAL CERTIFICATES OF OCCUPANCY OR OTHER
CERTIFICATES, LICENSES AND PERMITS REQUIRED FOR THE OWNERSHIP, OCCUPANCY AND
OPERATION OF THE PROJECT IN ACCORDANCE WITH ALL LEGAL REQUIREMENTS. BORROWER
HEREBY COVENANTS TO DILIGENTLY SEEK TO OBTAIN ANY SUCH CERTIFICATES, LICENSES
AND PERMITS; PROVIDED, HOWEVER, THAT LENDER WILL RELEASE THE PORTION OF THE
RETENTION AMOUNT BEING HELD WITH RESPECT TO ANY CONTRACTOR, SUBCONTRACTOR OR
MATERIALMAN ENGAGED IN THE WORK AS OF THE DATE UPON WHICH THE ARCHITECT OR
ENGINEER CERTIFIES TO LENDER THAT THE CONTRACTOR, SUBCONTRACTOR OR MATERIALMAN
HAS SATISFACTORILY COMPLETED ALL WORK AND HAS SUPPLIED ALL MATERIALS IN
ACCORDANCE WITH THE PROVISIONS OF THE CONTRACTOR'S, SUBCONTRACTOR'S OR
MATERIALMAN'S CONTRACT, THE CONTRACTOR, SUBCONTRACTOR OR MATERIALMAN DELIVERS
THE LIEN WAIVERS AND EVIDENCE OF PAYMENT IN FULL OF ALL SUMS DUE TO THE
CONTRACTOR, SUBCONTRACTOR OR MATERIALMAN AS MAY BE REASONABLY REQUESTED BY
LENDER OR BY THE TITLE COMPANY ISSUING THE TITLE INSURANCE POLICY, AND LENDER
RECEIVES AN ENDORSEMENT TO THE APPLICABLE TITLE INSURANCE POLICY INSURING THE
CONTINUED PRIORITY OF THE
59
LIEN OF THE APPLICABLE MORTGAGE AND EVIDENCE OF PAYMENT OF ANY PREMIUM PAYABLE
FOR SUCH ENDORSEMENT.
(VIII)
UPON FAILURE ON THE PART OF BORROWER PROMPTLY TO COMMENCE THE WORK OR
TO PROCEED DILIGENTLY AND CONTINUOUSLY (SUBJECT ONLY TO FORCE MAJEURE) TO
COMPLETION OF THE WORK, WHICH FAILURE SHALL CONTINUE AFTER NOTICE FOR THIRTY
(30) DAYS (BUT IN NO EVENT MORE THAN NINETY (90) DAYS IN THE CASE OF FORCE
MAJEURE), LENDER MAY APPLY ANY INSURANCE PROCEEDS OR CONDEMNATION PROCEEDS IT
THEN OR THEREAFTER HOLDS TO THE PAYMENT OF THE DEBT IN ACCORDANCE