CASH OR
CASH EQUIVALENT DEPOSITED BY BORROWER WITH LENDER ARE SUFFICIENT IN LENDER'S
REASONABLE JUDGMENT TO COVER THE COST OF THE RESTORATION.
(II)
THE NET PROCEEDS SHALL BE HELD BY LENDER
UNTIL DISBURSEMENTS COMMENCE, AND, UNTIL DISBURSED IN ACCORDANCE WITH THE
PROVISIONS OF THIS SECTION 8.4, SHALL CONSTITUTE ADDITIONAL SECURITY FOR THE
DEBT AND OTHER OBLIGATIONS UNDER THE LOAN DOCUMENTS.
THE NET PROCEEDS SHALL BE
DISBURSED BY LENDER TO, OR AS DIRECTED BY, BORROWER FROM TIME TO TIME DURING THE
COURSE OF THE RESTORATION, UPON RECEIPT OF EVIDENCE SATISFACTORY TO LENDER THAT
(A) ALL THE CONDITIONS PRECEDENT TO SUCH ADVANCE, INCLUDING THOSE SET FORTH IN
SECTION 8.4(B)(I), HAVE BEEN SATISFIED, (B) ALL MATERIALS INSTALLED AND WORK AND
LABOR PERFORMED (EXCEPT TO THE EXTENT THAT THEY ARE TO BE PAID FOR OUT OF THE
REQUESTED DISBURSEMENT) IN CONNECTION WITH THE RELATED RESTORATION ITEM HAVE
BEEN PAID FOR IN FULL, AND (C) THERE EXIST NO NOTICES OF PENDENCY, STOP ORDERS,
MECHANIC'S OR MATERIALMAN'S LIENS OR NOTICES OF INTENTION TO FILE SAME, OR ANY
OTHER LIENS OR ENCUMBRANCES OF ANY NATURE WHATSOEVER ON THE AFFECTED PROPERTY
WHICH HAVE NOT EITHER BEEN FULLY BONDED TO THE SATISFACTION OF LENDER AND
DISCHARGED OF RECORD OR IN THE ALTERNATIVE FULLY INSURED TO THE SATISFACTION OF
LENDER BY THE TITLE COMPANY ISSUING THE TITLE INSURANCE POLICY.
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NOTWITHSTANDING THE FOREGOING, INSURANCE PROCEEDS FROM THE POLICIES REQUIRED TO
BE MAINTAINED BY BORROWER PURSUANT TO SECTION 8.1(A)(III) SHALL BE CONTROLLED BY
LENDER AT ALL TIMES, SHALL NOT BE SUBJECT TO THE PROVISIONS OF THIS SECTION 8.4
AND SHALL BE USED SOLELY FOR THE PAYMENT OF THE OBLIGATIONS UNDER THE LOAN
DOCUMENTS AND OPERATING EXPENSES.
(III)
ALL PLANS AND SPECIFICATIONS REQUIRED IN
CONNECTION WITH THE RESTORATION SHALL BE SUBJECT TO PRIOR REVIEW AND ACCEPTANCE
IN ALL RESPECTS BY LENDER AND BY AN INDEPENDENT CONSULTING ENGINEER SELECTED BY
LENDER (THE "RESTORATION CONSULTANT").
LENDER SHALL HAVE THE USE OF THE PLANS
AND SPECIFICATIONS AND ALL PERMITS, LICENSES AND APPROVALS REQUIRED OR OBTAINED
IN CONNECTION WITH THE RESTORATION.
THE IDENTITY OF THE CONTRACTORS,
SUBCONTRACTORS AND MATERIALMEN ENGAGED IN THE RESTORATION, AS WELL AS THE
CONTRACTS IN EXCESS OF $100,000 UNDER WHICH THEY HAVE BEEN ENGAGED, SHALL BE
SUBJECT TO PRIOR REVIEW AND ACCEPTANCE BY LENDER AND THE RESTORATION
CONSULTANT.
ALL COSTS AND EXPENSES INCURRED BY LENDER IN CONNECTION WITH MAKING
THE NET PROCEEDS AVAILABLE FOR THE RESTORATION, INCLUDING, WITHOUT LIMITATION,
REASONABLE COUNSEL FEES AND DISBURSEMENTS AND THE RESTORATION CONSULTANT'S FEES,
SHALL BE PAID BY BORROWER.
(IV)
IN NO EVENT SHALL LENDER BE OBLIGATED TO MAKE
DISBURSEMENTS OF THE NET PROCEEDS IN EXCESS OF AN AMOUNT EQUAL TO THE COSTS
ACTUALLY INCURRED FROM TIME TO TIME FOR WORK IN PLACE AS PART OF THE
RESTORATION, AS CERTIFIED BY THE RESTORATION CONSULTANT, MINUS THE RESTORATION
RETAINAGE.
THE TERM "RESTORATION RETAINAGE" SHALL MEAN AN AMOUNT EQUAL TO TEN
PERCENT (10%) OF THE COSTS ACTUALLY INCURRED FOR WORK IN PLACE AS PART OF THE
RESTORATION, AS CERTIFIED BY THE RESTORATION CONSULTANT, UNTIL THE RESTORATION
HAS BEEN