HOWEVER, THAT LENDER MAY NOT
PURSUE ANY SUCH RIGHT OR CLAIM UNLESS AN EVENT OF DEFAULT HAS OCCURRED AND
REMAINS UNCURED.
Section 7.9
Letters of Credit.
7.9.1
Delivery of Letters of Credit.
(A)
THE AGGREGATE AMOUNT OF ANY LETTER OF
CREDIT AND CASH ON DEPOSIT WITH RESPECT TO THE DEBT SERVICE RESERVE FUNDS AT ANY
TIME DURING THE TERM OF THE LOAN SHALL AT ALL TIMES BE AT LEAST EQUAL TO THE
AMOUNT WHICH BORROWER WOULD OTHERWISE BE REQUIRED TO HAVE ON DEPOSIT PURSUANT TO
SECTION 7.4 HEREOF IF BORROWER DID NOT ELECT TO DELIVER A LETTER OF CREDIT IN
LIEU THEREOF. IN THE EVENT THAT A LETTER OF CREDIT IS DELIVERED IN LIEU OF ANY
PORTION OF THE DEBT SERVICE RESERVE FUNDS, BORROWER SHALL BE RESPONSIBLE FOR THE
DIRECT PAYMENT OF ANY DEBT SERVICE SHORTFALLS THAT WOULD OTHERWISE HAVE BEEN
PAYABLE FROM SUCH PORTION OF THE DEBT SERVICE RESERVE FUNDS. LENDER SHALL NOT
DRAW ON ANY LETTER OF CREDIT DELIVERED IN LIEU OF ANY PORTION OF THE DEBT
SERVICE RESERVE FUNDS UNLESS (I) BORROWER FAILS TO PAY ANY DEBT SERVICE
SHORTFALL OR (II) AN EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING.
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(B)
BORROWER SHALL GIVE LENDER NOT LESS THAN
FIVE (5) BUSINESS DAYS PRIOR WRITTEN NOTICE OF BORROWER'S ELECTION TO DELIVER A
LETTER OF CREDIT AND BORROWER SHALL PAY TO LENDER ALL OF LENDER'S REASONABLE
OUT-OF-POCKET COSTS AND EXPENSES IN CONNECTION THEREWITH. LENDER SHALL BE THE
BENEFICIARY OF ANY LETTER OF CREDIT AND BORROWER SHALL NOT BE ENTITLED TO DRAW
DOWN ANY SUCH LETTER OF CREDIT FOR ANY REASON WHATSOEVER. UPON NOT LESS THAN
FIVE (5) BUSINESS DAYS PRIOR WRITTEN NOTICE TO LENDER, BORROWER MAY REPLACE A
LETTER OF CREDIT WITH A CASH DEPOSIT TO THE DEBT SERVICE RESERVE FUND. PRIOR TO
THE RETURN OF A LETTER OF CREDIT, BORROWER SHALL DEPOSIT WITH LENDER CASH IN AN
AMOUNT THAT SATISFIES THE DEBT SERVICE RESERVE FUND DEPOSIT REQUIREMENT.
7.9.2
Provisions Regarding Letters of Credit.
(A)
EACH LETTER OF CREDIT DELIVERED UNDER THIS
AGREEMENT SHALL BE ADDITIONAL SECURITY FOR THE PAYMENT OF THE DEBT. UPON THE
OCCURRENCE AND DURING THE CONTINUATION OF AN EVENT OF DEFAULT, LENDER SHALL HAVE
THE RIGHT, AT ITS OPTION, TO DRAW ON ANY LETTER OF CREDIT AND TO APPLY ALL OR
ANY PART THEREOF TO THE PAYMENT OF THE ITEMS FOR WHICH SUCH LETTER OF CREDIT WAS
ESTABLISHED OR TO APPLY SUCH LETTER OF CREDIT TO PAYMENT OF THE DEBT IN SUCH
ORDER, PROPORTION OR PRIORITY AS LENDER MAY DETERMINE. ANY SUCH APPLICATION TO
THE DEBT SHALL BE SUBJECT TO THE SPREAD MAINTENANCE PAYMENT AND ANY INTEREST
SHORTFALL, IF APPLICABLE. ON THE MATURITY DATE, IF THE DEBT IS NOT PAID IN FULL,
ANY SUCH LETTER OF CREDIT MAY BE APPLIED TO REDUCE THE DEBT.
(B)
IN ADDITION TO ANY OTHER RIGHT LENDER MAY
HAVE TO DRAW UPON A LETTER OF CREDIT PURSUANT TO THE TERMS AND CONDITIONS OF
THIS AGREEMENT, LENDER SHALL HAVE THE ADDITIONAL RIGHTS TO DRAW IN FULL ON ANY
LETTER