ANY PORTION OF THE INSURANCE PROCEEDS OR CONDEMNATION AWARD,
AS APPLICABLE, SHOULD BE PAID
50
DIRECTLY TO BORROWER, BORROWER SHALL BE DEEMED TO HOLD SUCH AMOUNTS IN TRUST FOR
LENDER AND SHALL PROMPTLY REMIT SUCH AMOUNTS TO LENDER.
IF THE PROPERTY IS
SOLD, THROUGH FORECLOSURE OR OTHERWISE, PRIOR TO THE RECEIPT OF THE CONDEMNATION
AWARD, LENDER SHALL HAVE THE RIGHT, WHETHER OR NOT A DEFICIENCY JUDGMENT ON THE
NOTE SHALL HAVE BEEN SOUGHT, RECOVERED OR DENIED, TO RECEIVE THE PROCEEDS OF
SUCH SALE IN AN AMOUNT SUFFICIENT TO PAY THE LOAN IN FULL.
ALL EXPENSES
INCURRED BY LENDER IN THE SETTLEMENT AND COLLECTION OF AMOUNTS PAID WITH RESPECT
TO A CASUALTY OR CONDEMNATION (INCLUDING, WITHOUT LIMITATION, REASONABLE LEGAL
FEES AND EXPENSES) SHALL BE DEDUCTED AND REIMBURSED TO LENDER FROM THE INSURANCE
PROCEEDS OR CONDEMNATION AWARD, AS APPLICABLE, PRIOR TO ANY OTHER APPLICATION
THEREOF.
THE INSURANCE PROCEEDS OR CONDEMNATION AWARD PAID OR PAYABLE ON
ACCOUNT OF A CASUALTY OR CONDEMNATION, AS APPLICABLE (INCLUDING ALL BUSINESS
INTERRUPTION INSURANCE PROCEEDS PAID AS A RESULT OF SUCH CASUALTY OR
CONDEMNATION), LESS EXPENSES TO BE REIMBURSED TO LENDER HEREUNDER, IS REFERRED
TO HEREIN AS THE "RESTORATION PROCEEDS."
(C)
APPLICATION OF RESTORATION PROCEEDS;
RESTORATION OBLIGATIONS.
EXCEPT AS SPECIFICALLY HEREAFTER PROVIDED IN
SUBSECTION (D) BELOW, LENDER MAY, IN ITS SOLE DISCRETION, EITHER (I) APPLY THE
RESTORATION PROCEEDS TO PAYMENT OF THE LOAN, WHETHER OR NOT THEN DUE AND
PAYABLE, OR (II) HOLD AND RELEASE THE RESTORATION PROCEEDS TO BORROWER (A) FOR
THE COSTS OF RESTORATION UNDERTAKEN BY BORROWER IN ACCORDANCE WITH THIS LOAN
AGREEMENT AND (B) TO COVER ANY SHORTFALL IN OPERATING INCOME AS A RESULT OF SUCH
CASUALTY OR CONDEMNATION THAT IS NECESSARY TO PAY IN FULL THE DEBT SERVICE
PAYMENTS DUE FROM BORROWER ON EACH PAYMENT DUE DATE AND OTHER OPERATING EXPENSES
FALLING DUE DURING THE PERIOD UNTIL RESTORATION IS COMPLETED; PROVIDED, HOWEVER,
THAT LENDER SHALL HAVE NO OBLIGATION TO RELEASE RESTORATION PROCEEDS TO FUND
AMOUNTS CONTEMPLATED BY CLAUSE (B) UNLESS (1) LENDER IS SATISFIED THAT
RESTORATION PROCEEDS ARE SUFFICIENT TO PAY IN FULL THE ESTIMATED COST TO
COMPLETE RESTORATION AND (2) ALL OPERATING EXPENSES TO BE FUNDED WITH
RESTORATION PROCEEDS ARE APPROVED BY LENDER.
IF LENDER APPLIES RESTORATION
PROCEEDS TO PAYMENT OF THE LOAN AND THE LOAN IS STILL OUTSTANDING, (I) INTEREST
WILL CONTINUE TO ACCRUE AND BE DUE ON THE UNPAID PRINCIPAL AT THE APPLICABLE
INTEREST RATE, (II) THE PRINCIPAL AND INTEREST PAYMENTS SHALL BE RECAST BY
LENDER TO REFLECT THE REDUCED BALANCE OF THE PRINCIPAL INDEBTEDNESS OF THE LOAN,
AND (III) NO PROHIBITED PREPAYMENT FEE SHALL BE DUE IN CONNECTION WITH SUCH
APPLICATION.
IF LENDER MAKES THE RESTORATION PROCEEDS AVAILABLE TO BORROWER FOR
RESTORATION, BORROWER SHALL DILIGENTLY PURSUE RESTORATION SO AS TO RESTORE THE
PROPERTY TO AT LEAST EQUAL VALUE AND SUBSTANTIALLY THE SAME CHARACTER AS EXISTED
IMMEDIATELY PRIOR TO SUCH CASUALTY OR CONDEMNATION.
ALL PLANS AND
SPECIFICATIONS FOR THE RESTORATION AND ALL CONTRACTORS, SUBCONTRACTORS AND
MATERIALMEN TO BE ENGAGED IN THE RESTORATION, AS WELL AS THE CONTRACTS UNDER
WHICH THEY