Advances to Others for Account of Borrower. At the option of Lender, Lender may apply amounts due hereunder to the satisfaction of the conditions of the Commitment, the Note or the Loan Documents and any amounts so applied shall be part of the Loans and shall be secured by the Deed of Trust. Advances requested by Borrower shall be made directly to Borrower unless and until Borrower is in default hereunder or under any other Security Document. If Borrower is in default hereunder or under any other Security Document, then at the option of Lender, and without limiting the generality of the foregoing, Lender may make advances directly to the title insurance company or any subcontractor or materialman, or to any of them jointly, and the execution hereof by Borrower shall, and hereby does, constitute an irrevocable authorization, if Borrower is in default hereunder or under any other Loan Documents, to so advance the proceeds of the Loans. No further direction or authorization from Borrower shall be necessary to warrant such direct advances and all such advances shall satisfy pro tanto the obligations of Lender hereunder and shall be secured by the Deed of Trust as fully as if made to Borrower, regardless of the disposition thereof by the party or parties to whom such advance is made.
Advances to Others for Account of Borrower. At the option of the Lender and upon notice to the Borrower, the Lender may apply amounts due hereunder to the satisfaction of the conditions of this Agreement, or the Note, and any amounts so applied shall be part of the Loan. No further direction or authorization from the Borrower shall be necessary to warrant such direct advances and all such advances shall satisfy the obligations of the Lender hereunder and shall be secured by the Deed of Trust as fully as if made to Borrower, regardless of the disposition thereof by the party or parties to whom such advance is made. Notwithstanding the foregoing provisions, any bill, lien, encumbrance, claim, charge of assessment then in dispute, or in the process of being negotiated or litigated by the Borrower shall not be unilaterally paid by Lender without inquiry and without advance notice to Borrower, so long as said bill, lien, encumbrance, claim, charge or assessment is being challenged in a court of competent jurisdiction by Borrower and either the Borrower or its general contractor has bonded off such lien, encumbrance, claim, charge or assessment or otherwise posted adequate security with the court or Borrower’s title insurer to insure its future payment and satisfaction.
