Payment—To contractors or subcontractors, as lender elects.
It is mutually agreed between the parties here that lender may pay out any part of such funds to contractors, subcontractors or material suppliers, as lender may elect, for work performed, services rendered, and materials furnished in and about the construction of the building. Such payments shall be made at such times and in whatever amounts lender may deem expedient, and shall be made according to requisitions approved by a building inspector designated by lender which requisition shall be in such form and shall contain such information as lender may require; it being agreed by parties here that lender shall be free to make the payments previously mentioned in such manner that lender's security shall at all times be protected.
It is expressly agreed, any provision in this agreement to the contrary notwithstanding:
That lender shall assume no liability whatsoever to owner, owner's contractors, subcontractors and material suppliers, or others, except for its malfeasance in the application of the funds for the purposes previously recited and shall be fully protected in making any payment upon the faith of any requisition, inspector's certificate or release of lien or other instrument, believed by it to be genuine and to have been executed by the proper parties, and owner releases and discharges lender of and from any such liability and further agrees to indemnify and save harmless lender of and from any and all liability, damages, costs and expenses which it may sustain by reason of its application of the funds in good faith for the purposes previously set forth.
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