PRIOR WRITTEN NOTICE TO THE AGENT IN THE EVENT
OF CANCELLATION OF THE POLICY FOR ANY REASON WHATSOEVER AND A CLAUSE OR
ENDORSEMENT STATING THAT THE INTEREST OF THE AGENT SHALL NOT BE IMPAIRED OR
INVALIDATED BY ANY ACT OR NEGLECT OF FLEETWOOD OR ANY OF ITS SUBSIDIARIES OR THE
OWNER OF ANY REAL ESTATE FOR PURPOSES MORE HAZARDOUS THAN ARE PERMITTED BY SUCH
POLICY.
ALL PREMIUMS FOR SUCH INSURANCE SHALL BE PAID BY FLEETWOOD AND ITS
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SUBSIDIARIES WHEN DUE, AND CERTIFICATES OF INSURANCE AND, IF REQUESTED BY THE
AGENT OR ANY LENDER, PHOTOCOPIES OF THE POLICIES, SHALL BE DELIVERED TO THE
AGENT, IN EACH CASE IN SUFFICIENT QUANTITY FOR DISTRIBUTION BY THE AGENT TO EACH
OF THE LENDERS.
IF FLEETWOOD AND ITS SUBSIDIARIES FAIL TO PROCURE SUCH
INSURANCE OR TO PAY THE PREMIUMS THEREFOR WHEN DUE, THE AGENT MAY, AND AT THE
DIRECTION OF THE MAJORITY LENDERS SHALL, DO SO FROM THE PROCEEDS OF REVOLVING
LOANS.
7.6
Insurance and Condemnation Proceeds.
The Borrowers shall promptly
notify the Agent and the Lenders of any material loss, damage, or destruction to
the Collateral, whether or not covered by insurance.
The Agent is hereby
authorized to collect all insurance and condemnation proceeds in respect of
Collateral directly and to apply or remit them as follows:
(A)
WITH RESPECT TO INSURANCE AND CONDEMNATION PROCEEDS RELATING TO
COLLATERAL OTHER THAN FIXED ASSETS, AFTER DEDUCTING FROM SUCH PROCEEDS THE
REASONABLE EXPENSES, IF ANY, INCURRED BY THE AGENT IN THE COLLECTION OR HANDLING
THEREOF, THE AGENT SHALL APPLY SUCH PROCEEDS TO THE REVOLVING LOANS.
(B)
WITH RESPECT TO INSURANCE AND CONDEMNATION PROCEEDS RELATING TO
COLLATERAL CONSISTING OF FIXED ASSETS, THE AGENT SHALL PERMIT OR REQUIRE THE
LOAN PARTIES TO USE SUCH PROCEEDS, OR ANY PART THEREOF, TO REPLACE, REPAIR,
RESTORE OR REBUILD THE RELEVANT FIXED ASSETS IN A DILIGENT AND EXPEDITIOUS
MANNER WITH MATERIALS AND WORKMANSHIP OF SUBSTANTIALLY THE SAME QUALITY AS
EXISTED BEFORE THE LOSS, DAMAGE OR DESTRUCTION SO LONG AS (1) NO DEFAULT OR
EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING AND (2) THE LOAN PARTIES FIRST
(I) PROVIDE THE AGENT AND THE MAJORITY LENDERS WITH PLANS AND SPECIFICATIONS FOR
ANY SUCH REPAIR OR RESTORATION WHICH SHALL BE REASONABLY SATISFACTORY TO THE
MAJORITY LENDERS (SUCH SATISFACTION NOT TO BE UNREASONABLY WITHHELD OR DELAYED)
AND (II) DEMONSTRATE TO THE REASONABLE SATISFACTION OF THE MAJORITY LENDERS
(SUCH SATISFACTION NOT TO BE UNREASONABLY WITHHELD OR DELAYED) THAT THE FUNDS
AVAILABLE TO IT WILL BE SUFFICIENT TO COMPLETE SUCH PROJECT IN THE MANNER
PROVIDED THEREIN.
IN ALL OTHER CIRCUMSTANCES, THE AGENT SHALL HOLD ALL SUCH
INSURANCE AND CONDEMNATION PROCEEDS AS COLLATERAL OR, IF DIRECTED BY THE
MAJORITY LENDERS, APPLY SUCH INSURANCE AND CONDEMNATION PROCEEDS (A) IF SUCH
FIXED ASSETS ARE TERM LOAN COLLATERAL, TO THE TERM LOAN OR (B) OTHERWISE, TO THE
REVOLVING LOANS (BUT WITHOUT REDUCTION OF THE REVOLVING LOAN COMMITMENTS).
NOTWITHSTANDING THE FOREGOING, NO INSURANCE OR CONDEMNATION PROCEEDS RELATING TO
THE TERM LOAN COLLATERAL MAY BE USED TO REPLACE, REPAIR, RESTORE OR REBUILD