CONSTRUCTION LOAN AGREEMENT (ALABAMA)
THIS AGREEMENT made effective as of the _____ day of ______________, _______.
[NAME OF BORROWER]
An Alabama Corporation
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[NAME OF LENDER]
WHEREAS, Borrower has applied for a loan from Lender, such loan to be used to finance a construction
project as set forth herein.
AND WHEREAS, Lender has agreed to make such a loan on the terms and conditions contained herein,
and Borrower has agreed to borrow from Lender an amount not to exceed the principal amount of the
NOW THEREFORE, the parties hereto agree as follows:
1.1 The following terms, as used in this Agreement, shall have the meanings set forth below, unless
the context requires otherwise.
(a) Advances means the advances of the Loan made by Lender to Borrower in accordance
with the provisions of Section 3.
(b) Applicable Environmental Law means any applicable laws, rules or regulations pertaining
to health or the environment, petroleum products, radon radiation, or oil or hazardous
substances, including, but not limited to, the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended (“CERCLA”), as codified at 42
U.S.C. §9601 et seq., as amended, the Resource Conservation and Recovery Act of 1976,
as amended (“RCRA”) and the Federal Emergency Planning and Community Right-To-
Know Act of 1986.
The terms hazardous substance and release shall have the meanings specified in CERCLA.
The terms solid waste, disposal, dispose, and disposed shall have the meanings specified in
RCRA, the Superfund Amendments and Reauthorization Act of 1986 (“SARA”); the
Hazardous Materials Transportation Act, 49 U.S.C. §6901, et seq., as amended; the
Federal Water Pollution Control Act, 33 U.S.C. §1251, et seq., as amended; the Clean Air
Act, 42 U.S.C. §741, et seq., as amended; the Clean Water Act, 33 U.S.C. §7401, et seq., as
amended; the Toxic Substances Control Act, 15 U.S.C. §2601-2629, as amended; the Safe
Drinking Water Act, 42 U.S.C. §300f-300j, as amended, except that if such acts are
amended to broaden the meanings thereof, the broader meaning shall apply herein
prospectively from and after the date of such amendments.
Notwithstanding the foregoing, provided, to the extent that the laws of the state where
the Property is located establish a meaning for hazardous substance or release which is
broader than that specified in CERCLA, as CERCLA may be amended from time to time,
or a meaning for solid waste, disposal, and disposed which is broader than specified in
RCRA, as RCRA may be amended from time to time, such broader meanings under said
state law shall apply in all matters relating to the laws of such state.
(c) Business Day means any day other than Saturday, Sunday, or a day on which Lender is
closed for business.
(d) Closing Date means the first date on which all or any part of the Loan is first disbursed by
Lender to Borrower.
(e) Collateral means the Deed of Trust, which grants Lender a security interest in all of
Borrower’s right, title and interest in and to any and all equipment, fixtures, and building
materials now or hereafter located on the Property, or used in connection with the
Property or the Improvements, together with the rents and profits accruing from the
Property, and the Guaranty executed by the Guarantor.
(f) Construction Contract means the Agreement between Borrower and General Contractor,
as approved by Lender, whereby General Contractor shall construct (or cause the
construction of) the Improvements.
(g) Cost Budget means the line item project budget pursuant to which Lender will make
Advances, as set out in Schedule A, attached hereto.
(h) Deed of Trust means that certain Construction Mortgage, Deed of Trust, Security
Agreement and Fixture Filing dated the _________ day of _________________, _________
from Borrower for the use and benefit of Lender, securing the Loan and granting to
Lender a first lien upon Borrower’s interest in and to the Property and the Improvements
to be constructed thereon, together with certain other personal property as described
therein, as the same may be amended hereafter.
(i) Default means the occurrence or existence of any event which would constitute an event
of Default (as set forth in Section 6).
(j) GAAP means, as in effect from time to time, generally accepted accounting principles,
consistently applied, as promulgated by the American Institute of Certified Public
(k) General Contractor means a general contractor duly licensed in the State of Alabama and
acceptable to Lender, at Lender’s reasonable discretion.
(l) Guaranty means that certain Guaranty of Payment and Performance dated the
______________ day of __________________________________, ___________ from
___________________________________ [insert name of Guarantor] (the “Guarantor”) in
favor of Lender, together with any amendments thereto.
(m) Hard Costs means any costs of the Property and actual physical construction of the
Improvements (including labor and material).
(n) Improvements means _________________________________________ [insert description of
the Improvements to be made] to be constructed in accordance with the Plans and
(o) Indemnity Agreement means that certain Indemnity Agreement dated the _______ day of
____________________, _______ from Borrower and Guarantor in favor of Lender,
together with any amendments thereto.
(p) Lender’s Inspector means the independent consultant retained by Lender to make periodic
inspections of the Improvements, to review the Plans and Specifications, construction
contracts, and other construction related items and all draw requests (attached hereto as
“Schedule D”). Lender’s Inspector shall be __________________________________ [insert
name of company].
(q) Loan means the loan to be made by Lender to Borrower in the principal sum of
___________________ dollars ($______________________).
(r) Loan Documents means the Note, Deed of Trust, this Loan Agreement, the Indemnity
Agreement, the Guaranty, and any and all other documents executed in connection with
(s) Note means that certain Promissory Note dated the ___________ day of
____________________________, _________ from Borrower payable to the order of
Lender, together with any and all modifications and amendments thereto, evidencing
Borrower’s promise to repay the Loan together with interest at the rate set forth therein.
(t) Plans and Specifications means the plans and specifications for the Improvements to be
constructed by Borrower, as approved by Lender and Lender’s Inspector as the same
may hereafter be modified or amended.
(u) Property means the property located in __________________ County, Alabama, which is
more particularly described in “Schedule B” (attached hereto) upon which the
Improvements are to be made with the proceeds of the Loan.
(v) Retainage means the amount of the Loan to be retained by Lender pending completion of
the Improvements, and shall be ________________ percent (_________%) of the value of
the completed construction of the Improvements.
(w) Scheduled Completion Date means the date by which the Improvements are to be
(x) Soft Costs means any and all development costs other than Hard Costs, including, but not
limited to, operating deficits, closing costs, permits and governmental fees, leasing costs,
closing costs, legal and architectural fees, and construction interest.
(y) Title Company means the title company insuring the Deed of Trust, which shall be
________________________________________ [insert name of title company].
1.2 In this Agreement, any terms used in the singular shall include the plural and vice versa, as the
context requires. Any terms of the masculine gender shall include the feminine and neuter and
vice versa, as the context requires.
1.3 Any and all references to other documents or instruments shall be deemed to refer to such
documents or instruments as they may hereafter be extended, renewed, modified or amended, as
well as any and all replacements and substitutions therefor.
1.4 All headings used in this Agreement are for ease of reference only and shall not affect the
construction or interpretation hereof.
2. Conditions of the Loan
2.1 Any Advance to Borrower by Lender shall only be made upon fulfillment of all of the following:
(a) Payment by Borrower of any and all fees and expenses in accordance with this Loan
Agreement, including, but not limited to, a commitment fee equal to
_____________________ dollars ($________________) with all actual out-of-pocket
expenses incurred by Lender or with respect to the Loan.
(b) Execution, delivery, and recording or filing (if required) of this Agreement, the Note, the
Collateral, and any and all other documents evidencing or securing the Loan, and all
other documents required by this Agreement. Such documents shall be in a form
satisfactory to Lender.
(c) Insurance of a title insurance policy and receipt by Lender of an endorsement to the title
policy, or other evidence satisfactory to Lender that there has been no change in the
status of the title to the Property, creation of any new encumbrance thereon, or
occurrence of any event that could, in Lender’s opinion, impair the priority of the lien of
the Deed of Trust as of the time of the Advance.
2.2 Should Lender, at Lender’s option, elect to make one (1) or more Advances prior to receipt and
approval of all items required by Section 2.1, such election shall not obligate Lender to make any
3. Disbursement of the Loan
3.1 In order to fund certain Soft Costs and closing costs, Lender has made Loan Advances in the
principal amount of _________________ dollars ($__________________). Lender shall be under no
obligation to disburse further Loan proceeds until such time as Borrower has provided to Lender,
for Lender’s review and approval, any and all Post-Closing Items (attached hereto as “Schedule
C”). Borrower hereby covenants and agrees to provide such Post-Closing items to Lender within
__________________ (________) [insert the number of days in both words and numerals] days of the
3.2 Subject to Borrower’s compliance with all of the provisions of this Agreement, the Loan shall be
disbursed by Lender making Advances at such time and in such amounts as Lender deems fit, in
accordance with the following procedures:
(a) No less than ____________________ (________) [insert the number of days in both words and
numerals] business days before the date on which Borrower desires an Advance,
Borrower shall provide Lender with a written request for an Advance. Such request shall
be on a standard form certificate for payment (the “Draw Request”), attached hereto as
“Schedule D” and made a part hereof by reference. The following items shall accompany
any Draw Request submitted by Borrower:
(i) Any and all Hard Cost Advance requests shall be accompanied by a standard
AIA G702/703 form containing the itemized schedule of values for the
construction work and all construction costs incurred to date pursuant to each
category of such schedule of values, which must be properly executed with
certification by Borrower, Borrower’s architect, and the General Contractor
stating that such Draw Requests are for reimbursement of actual costs incurred
for the completion of the applicable Improvements in line with the Cost Budget;
(ii) Any and all Soft Cost Advance requests shall be accompanied by a separate
itemization for such Soft Costs, together with copies of invoices or paid receipts
for such amounts;
(iii) Approval of all requests for Hard Cost Advances by the Lender’s Inspector;
(iv) Lien waivers for all preceding draws; and
(v) A date-down endorsement to the title insurance policy insuring the Deed of
Trust, authorizing each Advance being requisitioned, updating the effective date
of said title insurance policy, and containing no new lien or encumbrance except
as approved by Lender.
(b) Borrower hereby appoints _________________________ [insert name of appointed agent] as
its agent(s) to make disbursement requests. Borrower may, by written notice to Lender,
appoint one (1) or more other agents or change agents to make disbursement requests,
provided such notice is not effective until the same is actually received by Lender.
(c) Prior to any Advance by Lender, the completed construction must be reviewed by
Lender’s Inspector. Lender’s Inspector shall review and certify to Lender his opinion of
the percentage of completion, compliance with the Plans and Specifications, and the
maximum allowable Advance, which shall be determined in accordance with Section
(d) The maximum allowable Advance shall be equal to the sum total of the following:
(i) Soft Costs actually incurred within the budgeted amounts therefor as shown on
the Cost Budget; plus
(ii) the lesser of the Hard Cost of the completed construction or the scheduled value
of each completed item shown on the General Contractor’s schedule of values.
No Advance shall be made for any duplication of work, work which does not
substantially conform to the Plans and Specifications, or work that is unsatisfactory in the
opinion of Lender’s Inspector.
The Advance to be made shall be the maximum allowable Advance, less the following:
(i) the Retainage (except in the case of the final Advance); and
(ii) the amounts previously advanced by Lender.
The Retainage shall be advanced only after each of the following conditions are satisfied
with regards to the applicable Improvements:
(i) substantial completion of all construction work, approval thereof by Lender’s
Inspector, and satisfactory evidence that such completion is free of any and all
mechanic’s and materialmen’s liens;
(ii) issuance by the appropriate department of ________________ County, Alabama
of an unconditional certificate of occupancy for such Improvements; and
(iii) delivery to Lender of an as-built survey of the project site in accordance with
Lender’s survey instructions and issuance of a final title insurance date-down
endorsement to Lender’s title insurance policy, which policy shall be acceptable
to Lender, at Lender’s discretion.
(e) Advances shall be made for each item recorded on the Cost Budget only up to the
amount budgeted on the Cost Budget for such item. No Advances shall be made for
stored materials, except as otherwise agreed by Lender. Advances may be made to pay
interest accrued on the Loan only to the extent that cash flow from the project is
insufficient to do so.
(f) Notwithstanding the foregoing, Lender shall not be required to provide Advances more
than once each month. Lender reserves the right to limit the total amount advanced on
the Loan at any time to an amount which, when deducted from the total amount of the
Loan, leaves a balance to be advanced equal to or greater than the cost of completion of
the Improvements and remaining non-construction expenses, plus the Retainage
applicable to the total amount of the Loan, all as determined by Lender from time to time.
Lender shall be entitled, at all times, to retain as undisbursed Loan funds, an amount
sufficient to pay any and all construction and non-construction costs relating to the Loan,
as reasonably estimated by Lender, including, but not limited to, any amounts to become
due pursuant to any construction contracts, amounts to complete the construction of the
Improvements but not yet included in such contract, estimated interest costs in excess of
anticipated cash flow for the construction period, estimated permit and license fees,
estimated architectural and engineering fees of Borrower and Lender’s Inspector, and
estimated title and recording fees, all to the extent reasonably anticipated to be incurred.
The provisions of this Section 3.2 are for the sole benefit of Lender. Lender may make one
(1) or more Advances to Borrower upon written disbursement requests not complying
with the provisions of this Section 3.2. Any such Advances shall be conclusively deemed
to be Advances to Borrower hereunder.
3.3 Lender may, from time to time at its discretion, regardless of whether Borrower has submitted a
requisition therefor, advance amounts which become due for construction and non-construction
items for which Borrower is responsible for paying, including interest on the Loan. Any such
Advances may be made directly to parties to whom such amounts are due, or to Lender to
reimburse Lender for sums due to it. All such Advances to parties other than Borrower shall be
deemed Advances to Borrower hereunder and shall be secured by the Collateral to the same
extent as if they were made directly to Borrower.
3.4 Any request for an Advance by Borrower shall constitute Borrower’s representation and
warranty to Lender that:
(a) all completed construction work in connection with the Improvements conforms
substantially with the Plans and Specifications;
(b) all construction and non-construction costs for the payment of which Lender has
previously advanced funds have been paid;
(c) any and all representations and warranties contained in any of the Loan Documents are
true and correct as if made on such date;
(d) there are no existing Defaults or events of Default under any of the Loan Documents; and
(e) as of such date, Borrower has no defenses, equities, or setoffs in respect to the Loan
3.5 Lender shall make Advances by depositing the same in a designated account, which shall be used
by Borrower only for the purpose of paying the costs and expenses contemplated by this
In the event of any Default hereunder, Lender may, at its discretion, advance funds through a
disbursing agent appointed by Lender at Borrower’s expense. Any such Advance to such agent
shall be deemed to be an Advance to Borrower.
Any Advance made by Lender shall not constitute Lender’s approval or acceptance of the
construction theretofore completed. Lender’s inspection and approval of the Plans and
Specifications, the construction of the Improvements, or the workmanship and materials used
therein, shall impose no liability of any kind on Lender. Lender’s sole obligation as the result of
such inspection and approval is to make the Advances if, and to the extent, required by this
3.6 Along with the Draw Requests, Borrower shall submit to Lender and the Title Company,
estoppel certificates showing the amounts paid and the amounts owing to all persons or
organizations furnishing labor or materials in connection with the completion of the
Improvements, as shall be required by the Title Company in order for the Title Company to issue
its date-down endorsement without exception for mechanic’s or materialmen’s liens.
4. Representations and Warranties
Borrower hereby makes the following representations and warranties:
4.1 Borrower is a corporation duly organized, validly existing and in good standing under Alabama
Law, and has full power and authority to consummate the transactions contemplated by this
4.2 Borrower has full power and authority to borrow hereunder and to incur the obligations
provided for herein, and in each of the other Loan Documents to which Borrower is a party, all of
which have been authorized, executed and delivered by Borrower pursuant to all proper and
necessary corporate action.
4.3 Any and all Loan Documents to which Borrower is a party constitute a valid and legally binding
obligation of Borrower, enforceable in accordance with its respective terms, and does not violate,
conflict with, or constitute any default under any law, government regulation, decree, judgment,
Borrower’s organizational documents, or any other agreement or instrument binding upon
4.4 To the best of Borrower’s knowledge, there are no actions, suits or proceedings pending or
threatened against Borrower which might adversely affect the financial condition of Borrower or
Guarantor, or which might impair the value of any Collateral taken or to be taken by Lender in
connection with this Agreement.
Neither Borrower nor Guarantor are in violation of any agreement, the violation of which might
reasonably be expected to have a materially adverse effect on Borrower’s or Guarantor’s business
Neither Borrower nor Guarantor are in violation of any order, judgment or decree of any court,
or any statute or governmental regulation to which Borrower or Guarantor are subject.
Neither the execution and performance of this Agreement by Borrower, nor the execution and
performance of the Guaranty by Guarantor, will result in any breach of any mortgage, lease,
credit or loan agreement, or any other instrument which may bind or affect Borrower or
4.5 Any and all financial statements of Borrower, Guarantor and any other business enterprises in
which Guarantor has an interest, heretofore or hereafter given to Lender are, and will be, true
and complete in all respects as of their respective dates and prepared on a basis consistent with
the financial statements of Borrower and Guarantor previously provided to Lender. Any such
statements fairly represent the financial conditions of the business or persons to which they
pertain, and there have been no materially adverse changes in the financial conditions reflected
therein since the respective dates thereof.
4.6 Any and all necessary action has been taken to permit construction of the Improvements
according to the Plans and Specifications, and full use of the Improvements for their intended
purpose under all covenants and restrictions of record, and all applicable laws, ordinances and
regulations, including, but not limited to, zoning and environmental laws. Upon completion, the
Improvements will comply with any and all covenants and restrictions of records, and all
applicable laws and regulations, including, but not limited to, the Americans with Disabilities
Act, the regulations thereunder, and all laws, ordinances, rules and regulations relating to
zoning, setback requirements, and building codes.
If constructed in accordance with the Plans and Specifications, the Improvements will not
constitute a nonconforming structure and the operation of the Improvements will not be a
nonconforming use under applicable zoning.
In the event that the Improvements or the Property are hereafter determined to be in violation of
any covenants or restrictions of record, or any applicable laws, ordinances, rules or regulations,
Borrower shall indemnify and hold Lender harmless from any fines or penalties assessed, or any
corrective costs incurred by Lender therefor. Such indemnity shall survive any foreclosure or
deed in lieu of foreclosure.
4.7 Any and all licenses, permits and approvals, including, but not limited to, building permits, have
been obtained to permit construction of the Improvements in accordance with the Plans and
Specifications. There are no unsatisfied conditions or improvements which must be completed
prior to issuance of a final unconditional certificate of occupancy for the Improvements once they
4.8 The Deed of Trust, when duly executed, delivered and recorded, shall constitute a first lien
against the Property, prior to all other liens and encumbrances, including those which may
accrue hereafter, except for such matters as shall have been defined as “Permitted
Encumbrances” in the Deed of Trust.
4.9 To the best of Borrower’s knowledge, there are no proceedings pending or threatened to acquire
the Property, or any interest therein, by any power of condemnation or eminent domain, or to
enjoin or similarly prevent the construction or use of the Improvements.
4.10 Any and all documents furnished by Borrower as part of, or in support of, the Loan application
or pursuant to this Loan Agreement are true, correct, complete and accurately represent the
matters to which they pertain.
4.11 Borrower makes the following environmental representations and warranties, to the best of
(a) Neither the Property nor Borrower are in violation of, or subject to, any existing, pending
or threatened investigations or inquiries by any governmental authority or any remedial
obligations under any applicable environmental laws. Except as otherwise set forth in an
environmental site assessment provided to Lender in connection with the Loan, there are
no facts, conditions or circumstances which could result in any such investigation or
inquiry if any such facts, conditions and circumstances were fully disclosed to the
applicable governmental authority. Should Borrower become aware of any such facts,
conditions or circumstances, or any such investigation or inquiry, Borrower shall
immediately inform Lender.
(b) Borrower has not obtained and is not required to obtain any permits, licenses or similar
authorizations to construct, occupy, operate or use any buildings, improvements, fixtures
or equipment in connection with the Property or Improvements constructed, or to be
constructed, by reason of any applicable environmental laws.
(c) Except as otherwise set forth in an environmental site assessment provided to Lender in
connection with the Loan, no oil, toxic or other hazardous substances or solid wastes
have been disposed of or released on the Property. Borrower hereby agrees that it will
not dispose of or release any oil, toxic or other hazardous substances or solid wastes on
(d) Borrower and Guarantor have executed and delivered the Indemnity Agreement dated
the ____________ day of ______________________, ___________, the terms and conditions
of which are incorporated herein by reference, and Borrower agrees to perform its
4.12 Any and all representations contained in this Agreement shall be deemed continuing and in
effect at all times while Borrower remains indebted to Lender pursuant to the Loan. All such
representations and warranties shall be deemed to be incorporated by reference in each request
for an Advance by Borrower, unless Borrower notifies Lender of any change therein.
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5. Borrower’s Covenants
As long as Borrower remains indebted to Lender pursuant to this Agreement, Borrower covenants and
agrees that Borrower will do the following:
5.1 Use the advances solely and exclusively for the purposes set forth on the Cost Budget and pay
such fees, closing costs, and other non-construction expenses relating to the Loan, the
construction of the Improvements or the discharge of Borrower’s obligations under this
Agreement as Lender may from time to time approve.
5.2 Commence construction of the Improvements and thereafter diligently pursue completion of the
Improvements, ensuring that each stage of completion occurs by the Scheduled Completion Date.
Ensure that the Improvements constructed on the Property substantially conform with the Plans
and Specifications, and substantially comply with any and all applicable laws, rules and
regulations, including, but not limited to, zoning and setback requirements, and all restrictive
Upon completion of the Improvements, provide Lender with the following:
(a) a certificate stating completion of the Improvements, and with such certificate, furnish
Lender an endorsement updating the effective date of the Lender’s policy of title
insurance with only such exceptions as may be approved in writing by Lender;
(b) a current as-built survey, in a form satisfactory to Lender, showing the extent of
construction of the Improvements without violation of setback lines, zoning
requirements or restrictive covenants, and showing no encroachments or other
conditions which could adversely affect the value and utility of the Property or
Improvements, or the operation of the Improvements;
(c) copies of final, unconditional certificates of occupancy, and other approvals required to
confirm that completion has occurred and that any tenants on the Property may
unconditionally occupy the Improvements and operate the Improvements; and
(d) evidence that the insurance requirements of Section 5.5 have been satisfied.
5.3 Keep the Property, the Improvements, and all other assets of Borrower free from all liens and
encumbrances, except those contemplated by this Agreement or as set forth in the Deed of Trust
as Permitted Encumbrances.
Promptly pay any and all persons or entities supplying work or materials for the construction of
Discharge or make other arrangements acceptable to Lender with respect to any mechanic’s or
other liens filed against the Property or Borrower. Lender shall be under no obligation to make
further Advances until any such liens are removed from the Property or are bonded off.
5.4 Promptly pay, when due and prior to the accrual of penalties thereon, any and all taxes,
including, but not limited to, all real and personal property taxes and assessments levied or
assessed against Borrower, the Property and the Improvements, and to provide Lender, at
Lender’s request, with a receipt therefor.
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5.5 At all times while Borrower is indebted to Lender, maintain the following insurance coverage:
(a) Liability insurance in an amount equaling at least _________________________ dollars
($_____________________) per occurrence. All such liability insurance shall be written on
an occurrence basis and shall name Lender as an additional insured;
(b) During the construction of the Improvements, builder’s risk insurance on the
Improvements, and following completion of construction of the Improvements, “all-risk”
broad form coverage on the Improvements in an amount not less than the replacement
cost thereof, with endorsements insuring against such potential causes of loss as shall be
required by Lender; and
(c) Upon completion of the Improvements, rental interruption insurance, if applicable, in an
amount equal to at least twelve (12) months anticipated gross revenues, less those
expenses that are not typically incurred during a period of business interruption.
The policies detailed in Sections 5.5(b) and 5.5(c) shall name Lender as mortgagee and loss payee
under a standard non-contributory mortgagee and lender loss payable clause, and shall provide
that Lender shall receive a minimum of thirty (30) days written notice prior to cancellation. The
proceeds from either such policy shall be payable by check to Lender, or jointly payable to
Borrower and Lender, and shall be delivered to Lender, and such proceeds (after deduction of
Lender’s costs and expenses of obtaining such proceeds) shall be applied by Lender, at Lender’s
sole option, in one of the following ways:
(a) to the full or partial payment or prepayment of the Loan Obligations (without premium);
(b) to the repair and/or restoration of the Improvements damaged or taken, or Lender may
release the net proceeds to Borrower.
Notwithstanding the foregoing, Lender shall make the net insurance proceeds, after payment of
Lender’s costs and expenses, available to Borrower for Borrower’s repair, restoration and/or
replacement of the Improvements on the following terms, and subject to Borrower’s satisfaction
of the following conditions:
(a) there shall exist no Default at the time of such loss or damage, and at all times thereafter
while Lender is in possession of any portion of such proceeds;
(b) the Improvements for which loss or damage has resulted shall be capable of being
restored to their pre-existing condition and utility in all material respects with a value
equal to or greater than prior to such loss or damage, and shall be capable of being
completed prior to the maturity of the Loan;
(c) within thirty (30) days from the date of such loss or damage, Borrower shall provide
Lender with written notice electing to have the proceeds applied for repair, restoration
(d) within sixty (60) days following the date of notice under the preceding subparagraph (c),
and prior to any proceeds being disbursed, Borrower shall provide Lender with the
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(i) complete plans and specifications for restoration, repair and/or replacement of
the damaged Improvements;
(ii) in the event loss or damage exceeds _______________ dollars ($_____________),
then fixed-price or guaranteed maximum cost construction contracts for
completion of the repair and/or restoration work in accordance with such plans
(iii) builder’s risk insurance for the full cost of construction, with Lender named
under a standard mortgagee loss-payable clause;
(iv) such additional funds as are necessary, in Lender’s opinion, to complete the
repair, restoration and/or replacement of the Improvements; and
(v) copies of any and all permits and licenses necessary to complete the work in
accordance with the said plans and specifications.
(e) Lender shall, at Borrower’s expense, retain an inde