ANY REQUEST FOR DISBURSEMENT OF FUNDS HEREUNDER TO
PAY APPROVED CAPITAL EXPENDITURES, LENDER SHALL DISBURSE TO BORROWER THE
RELEVANT GENERAL RESERVE FUNDS
UPON SATISFACTION BY BORROWER OF EACH OF THE
FOLLOWING CONDITIONS:
(I)
LENDER SHALL HAVE RECEIVED AN OFFICERS' CERTIFICATE (A) STATING
THAT ALL APPROVED CAPITAL EXPENDITURES AT THE PROPERTY TO BE FUNDED BY THE
REQUESTED DISBURSEMENT HAVE BEEN COMPLETED IN GOOD AND WORKMANLIKE MANNER AND IN
ACCORDANCE WITH ALL LEGAL REQUIREMENTS AND ENVIRONMENTAL LAWS IN ALL MATERIAL
RESPECTS, SUCH CERTIFICATE TO BE ACCOMPANIED BY A COPY OF ANY LICENSE, PERMIT OR
OTHER APPROVAL BY ANY GOVERNMENTAL AUTHORITY REQUIRED TO COMMENCE AND/OR
COMPLETE THE APPROVED CAPITAL EXPENDITURES, (B) IDENTIFYING EACH PERSON THAT
SUPPLIED MATERIALS OR LABOR IN CONNECTION WITH THE APPROVED CAPITAL EXPENDITURES
PERFORMED AT THE PROPERTY WITH RESPECT TO THE REIMBURSEMENT TO BE FUNDED BY THE
REQUESTED DISBURSEMENT, (C) STATING THAT EACH SUCH PERSON HAS BEEN PAID OR WILL
BE PAID IN FULL UPON SUCH DISBURSEMENT, SUCH OFFICERS' CERTIFICATE TO BE
ACCOMPANIED BY LIEN WAIVERS OR OTHER EVIDENCE OF PAYMENT SATISFACTORY TO LENDER,
AND (D) CERTIFYING THAT ALL FUNDS PREVIOUSLY DISBURSED FROM THE GENERAL RESERVE
ACCOUNT WITH RESPECT TO APPROVED CAPITAL EXPENDITURES HAVE BEEN APPLIED BY
BORROWER TOWARD THE EXPENSES FOR WHICH THEY WERE DISBURSED AND THE FUNDS BEING
REQUESTED WILL BE APPLIED TO PAY OR REIMBURSE FOR MATERIALS OR WORK PERMITTED
HEREUNDER AND DONE IN ACCORDANCE HEREWITH;
UPON LENDER'S REASONABLE REQUEST, A TITLE SEARCH FOR THE PROPERTY INDICATING
THAT THE PROPERTY IS FREE FROM ALL LIENS, CLAIMS AND OTHER ENCUMBRANCES NOT
PREVIOUSLY APPROVED BY LENDER; AND
(II)
LENDER HAS RECEIVED EVIDENCE REASONABLY SATISFACTORY TO LENDER
THAT THE MATERIALS FOR WHICH THE REQUEST IS MADE ARE ON-SITE AT THE PROPERTY AND
ARE PROPERLY SECURED OR HAVE BEEN INSTALLED IN THE PROPERTY.
(B)
LENDER MAY, IN ITS REASONABLE DISCRETION, INSPECT THE PROPERTY AT
BORROWER'S EXPENSE PRIOR TO MAKING A DISBURSEMENT OF GENERAL RESERVE FUNDS WITH
RESPECT TO APPROVED CAPITAL EXPENDITURES IN ORDER TO VERIFY COMPLETION OF THE
APPROVED CAPITAL EXPENDITURES FOR WHICH REIMBURSEMENT IS SOUGHT.
LENDER MAY
REQUIRE THAT SUCH INSPECTION BE CONDUCTED BY AN APPROPRIATE INDEPENDENT
QUALIFIED PROFESSIONAL REASONABLY SELECTED BY LENDER AND/OR MAY REQUIRE A COPY
OF A CERTIFICATE OF COMPLETION BY AN INDEPENDENT QUALIFIED PROFESSIONAL
REASONABLY ACCEPTABLE TO LENDER PRIOR TO THE DISBURSEMENT OF THE REQUEST GENERAL
RESERVE FUNDS.
BORROWER SHALL PAY THE ACTUAL OUT-OF-POCKET REASONABLE EXPENSE
OF THE INSPECTION AS REQUIRED HEREUNDER, WHETHER SUCH INSPECTION IS CONDUCTED BY
LENDER OR BY AN INDEPENDENT QUALIFIED PROFESSIONAL.
LENDER'S DISBURSEMENT OF
ANY GENERAL RESERVE FUNDS OR OTHER ACKNOWLEDGMENT OF COMPLETION OF ANY APPROVED
CAPITAL EXPENDITURES IN A MANNER SATISFACTORY TO LENDER SHALL NOT BE DEEMED A
CERTIFICATION OR WARRANTY BY LENDER TO ANY PERSON THAT THE APPROVED CAPITAL
EXPENDITURES HAVE BEEN COMPLETED IN ACCORDANCE WITH LEGAL REQUIREMENTS.
THE
INSUFFICIENCY OF ANY BALANCE IN THE GENERAL RESERVE ACCOUNT SHALL NOT RELIEVE
BORROWER FROM ITS OBLIGATION TO FULFILL ALL PRESERVATION AND MAINTENANCE
COVENANTS IN THE LOAN DOCUMENTS.
SECTION 7.10.
ACCRUAL ADJUSTMENT RESERVE ACCOUNT.
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ON EACH PAYMENT DATE, BORROWER SHALL