AND SHALL BE PAID TO LENDER.
BORROWER SHALL BE RESPONSIBLE FOR PAYMENT OF ANY
FEDERAL, STATE OR LOCAL INCOME OR OTHER TAX APPLICABLE TO THE INTEREST EARNED ON
THE RESERVE FUNDS CREDITED OR PAID TO BORROWER.
BORROWER SHALL NOT, WITHOUT
OBTAINING THE PRIOR WRITTEN CONSENT OF LENDER, FURTHER PLEDGE, ASSIGN OR GRANT
ANY SECURITY INTEREST IN ANY RESERVE FUND OR THE MONIES DEPOSITED THEREIN OR
PERMIT ANY LIEN OR ENCUMBRANCE TO ATTACH THERETO, OR ANY LEVY TO BE MADE
THEREON, OR ANY UCC-1 FINANCING STATEMENTS, EXCEPT THOSE NAMING LENDER AS THE
SECURED PARTY, TO BE FILED WITH RESPECT THERETO.
LENDER SHALL NOT BE LIABLE FOR
ANY LOSS SUSTAINED ON THE INVESTMENT OF ANY FUNDS CONSTITUTING THE RESERVE
FUNDS.
BORROWER SHALL INDEMNIFY LENDER AND HOLD LENDER HARMLESS FROM AND
AGAINST ANY AND ALL ACTIONS, SUITS, CLAIMS, DEMANDS, LIABILITIES, LOSSES,
DAMAGES, OBLIGATIONS AND COSTS AND EXPENSES (INCLUDING LITIGATION COSTS AND
REASONABLE ATTORNEYS FEES AND EXPENSES) ARISING FROM OR IN ANY WAY CONNECTED
WITH THE PERFORMANCE OF THE OBLIGATIONS FOR WHICH THE RESERVE FUNDS WERE
ESTABLISHED.
BORROWER SHALL ASSIGN TO LENDER ALL RIGHTS AND CLAIMS BORROWER MAY
HAVE AGAINST ALL PERSONS OR ENTITIES SUPPLYING LABOR, MATERIALS OR OTHER
SERVICES WHICH ARE TO BE PAID FROM OR SECURED BY THE RESERVE FUNDS; PROVIDED,
HOWEVER, THAT LENDER MAY NOT PURSUE ANY SUCH RIGHT OR CLAIM UNLESS AN EVENT OF
DEFAULT HAS OCCURRED AND REMAINS UNCURED.
77
SECTION 7.8
LETTER OF CREDIT RIGHTS.
ANY
LETTER OF CREDIT DELIVERED TO LENDER PURSUANT TO THIS AGREEMENT SHALL BE HELD BY
LENDER AS ADDITIONAL SECURITY FOR THE LOAN.
LENDER SHALL HAVE THE RIGHT TO DRAW
UPON ANY LETTER OF CREDIT IMMEDIATELY AND WITHOUT FURTHER NOTICE:
(A)
UPON THE OCCURRENCE AND DURING THE
CONTINUANCE OF AN EVENT OF DEFAULT;
(B)
IF BORROWER FAILS TO DELIVER TO LENDER, NO
LESS THAN THIRTY (30) DAYS PRIOR TO THE EXPIRATION OF ANY LETTER OF CREDIT
(INCLUDING ANY RENEWAL OR EXTENSION THEREOF), A RENEWAL OR EXTENSION OF SUCH
LETTER OF CREDIT OR A REPLACEMENT LETTER OF CREDIT; OR
(C)
IF THE INSTITUTION ISSUING THE LETTER OF
CREDIT CEASES TO BE AN ELIGIBLE INSTITUTION AND BORROWER FAILS TO DELIVER TO
LENDER A REPLACEMENT LETTER OF CREDIT FROM AN ELIGIBLE INSTITUTION WITHIN THIRTY
(30) DAYS OF THE DATE THAT BORROWER IS NOTIFIED OR OTHERWISE BECOMES AWARE THAT
SUCH INSTITUTION CEASED TO BE AN ELIGIBLE INSTITUTION.
SECTION 7.9
APPLICATION OF LETTER OF CREDIT
PROCEEDS.
IN THE EVENT OF A DRAW UPON A LETTER OF CREDIT DUE TO THE EXISTENCE
OF AN EVENT OF DEFAULT, LENDER MAY APPLY SUCH AMOUNTS IN SUCH ORDER AND IN SUCH
AMOUNTS AS LENDER SHALL ELECT, IN ITS SOLE AND ABSOLUTE DISCRETION, TO PAYMENT
OF THE DEBT.
IN THE EVENT OF A DRAW UPON A LETTER OF CREDIT DUE TO THE
OCCURRENCE OF AN EVENT DESCRIBED IN SECTION 7.8(B) OR (C) ABOVE, LENDER SHALL
DEPOSIT THE PROCEEDS OF SUCH LETTER OF CREDIT INTO A RESERVE ACCOUNT DESIGNATED
BY LENDER AND SUCH PROCEEDS SHALL BE HELD AND RELEASED IN THE SAME MANNER
APPLICABLE