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<br />Internal Revenue Code of 1986 as amended. <br /> <br />b. Authorization of the Loan; No Violation. The execution, delivery and <br />performance of this Agreement, the Predevelopment Note and the Assignment <br />Agreement have been duly authorized by Borrower, and this Agreement, the <br />Predevelopment Note and the Assignment Agreement, when duly executed and <br />delivered will constitute the valid and binding obligations of Borrower enforceable <br />in accordance with their respective terms. Borrower's execution of this <br />Agreement, the Predevelopment Note and the Assignment Agreement and <br />performance thereunder will not result in a breach of or constitute a default under <br />any agreement, indenture or other instrument to which Borrower is a party or by <br />which Borrower may be bound. <br /> <br />c. Litiqation. There are no pending or threatened actions or proceedings <br />before any court or administrative agency which may adversely affect the <br />financial condition or operation of Borrower or its ability to carry out the <br />obligations of Borrower under this Agreement, the DDA or the Ground Lease. <br />Borrower is not the subject of an action under federal or state Bankruptcy Law. <br /> <br />3.2 Indemnification. Borrower shall indemnify, defend (with counsel reasonably <br />acceptable to Agency), and hold harmless the Indemnitees from and against any and <br />all Claims arising directly or indirectly in any manner in connection with or resulting from <br />(a) any and all predevelopment, development or construction activities conducted in <br />connection with the Property or the Project, including without limitation, site <br />investigations conducted by or for Borrower, (b) any failure of any of Borrower's <br />representations or warranties set forth in this Agreement, or made by Borrower in <br />connection with the execution and delivery of this Agreement or in any certificate <br />furnished pursuant hereto, or in connection with any request for disbursement of Loan <br />Proceeds to be correct in all material respects, (c) any claim, demand or cause of <br />action, or any action or other proceeding, whether meritorious or not, brought or <br />asserted against any Indemnitee which relates to or arises in connection with the Loan, <br />the Predevelopment Note, the Assignment Agreement, or any transaction contemplated <br />thereby, or the relationship between Borrower and Agency. Borrower's obligations <br />under this Section shall survive the making and repayment of the Loan and the <br />expiration or termination of this Agreement. Borrower's indemnity obligations shall not <br />apply to Claims arising solely as a result of the willful misconduct or gross negligence of <br />the Agency, its officers, employees or agents. <br /> <br />3.3 Books and Records. The Agency shall have the right, during business hours <br />and after reasonable notice to Borrower, to inspect and copy Borrower's books and <br />records with respect to the Property, the Project and the Loan. <br /> <br />3.4 Other Documents. Upon the reasonable request by the Agency, Borrower <br />shall deliver to the Agency copies of documents related to the Project, including without <br />limitation, construction contracts, consulting agreements, architects' agreements, loan <br />and financing applications, studies, reports, loan documents, management plans, and <br />property management agreements. <br /> <br />809163-1 <br /> <br />6 <br />