CONTRACTOR OR SUPPLIER TO BE PAID WITH THE PROCEEDS
OF SUCH DISBURSEMENT (EITHER A "RESTORATION HOLDBACK").
AMOUNTS HELD AS THE
RESTORATION HOLDBACK SHALL BE DISBURSED ONCE:
(1) LENDER RECEIVES SATISFACTORY
EVIDENCE THAT RESTORATION HAS BEEN FULLY COMPLETED IN ACCORDANCE WITH ALL
REQUIREMENTS OF LAW; (2) LENDER RECEIVES SATISFACTORY EVIDENCE THAT ALL
RESTORATION COSTS HAVE BEEN PAID IN FULL OR WILL BE FULLY PAID FROM THE
REMAINING RESTORATION PROCEEDS AND THE RESTORATION HOLDBACK; AND (3) LENDER
RECEIVES, AT LENDER'S OPTION, A SEARCH OF TITLE TO THE PROPERTY, EFFECTIVE AS OF
THE DATE ON WHICH THE RESTORATION HOLDBACK IS TO BE DISBURSED, SHOWING NO LIENS
OTHER THAN THE PERMITTED ENCUMBRANCES OR AN ENDORSEMENT TO ITS TITLE INSURANCE
POLICY WHICH
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UPDATES THE EFFECTIVE DATE OF SUCH POLICY TO THE DATE ON WHICH THE RESTORATION
HOLDBACK IS TO BE DISBURSED AND WHICH SHOWS NO LIENS SINCE THE DATE OF
RECORDATION OF THE SECURITY INSTRUMENT (OTHER THAN THE PERMITTED ENCUMBRANCES).
(D)
NOTWITHSTANDING SUBSECTION (C) ABOVE, LENDER
MAY RELEASE FROM THE RESTORATION HOLDBACK PAYMENTS TO A CONTRACTOR OR SUPPLIER
IF:
(1) LENDER RECEIVES SATISFACTORY EVIDENCE THAT SUCH CONTRACTOR HAS
SATISFACTORILY COMPLETED ITS CONTRACT WITH BORROWER; (2) SUCH CONTRACTOR OR
SUPPLIER DELIVERS TO LENDER AN ACCEPTABLE WRITTEN WAIVER OF ITS MECHANIC'S LIEN,
IN RECORDABLE FORM; AND (3) BORROWER PROVIDES WRITTEN CONSENT FROM THE SURETY
COMPANY, IF ANY, WHICH HAS ISSUED A PAYMENT OR PERFORMANCE BOND WITH RESPECT TO
SUCH CONTRACTOR OR SUPPLIER.
(II)
DISBURSEMENTS FOR SHORTFALLS IN OPERATING
INCOME.
PROVIDED THAT LENDER DETERMINES THAT THE RESTORATION PROCEEDS ARE
SUFFICIENT TO PAY IN FULL THE ESTIMATED COST TO COMPLETE RESTORATION, LENDER
WILL DISBURSE RESTORATION PROCEEDS NOT RESERVED FOR RESTORATION TO PAY THE
SHORTFALL IN OPERATING INCOME NECESSARY TO PAY (A) FIRST, THE DEBT SERVICE
PAYMENTS DUE FROM BORROWER ON EACH PAYMENT DUE DATE FALLING DUE FROM THE DATE OF
THE CASUALTY OR CONDEMNATION THROUGH THE DATE ON WHICH RESTORATION IS
SUBSTANTIALLY COMPLETED AND (B) THEN, ANY OPERATING EXPENSES APPROVED BY
LENDER.
LENDER MAY REQUIRE SATISFACTORY EVIDENCE THAT OPERATING EXPENSES TO BE
PAID HAVE BEEN INCURRED AND MAY ISSUE PAYMENTS DIRECTLY TO THE PERSON ENTITLED
TO THE PAYMENT CLAIMED AS AN OPERATING EXPENSE.
(III)
RESTORATION PROCEEDS DEEMED INSUFFICIENT.
IF, IN LENDER'S JUDGMENT, AT ANY TIME DURING RESTORATION, THE UNDISBURSED
PORTION OF THE RESTORATION PROCEEDS, TOGETHER WITH THE REMAINING PORTION OF
RESTORATION PROCEEDS RELEASED TO BORROWER PURSUANT TO THIS SECTION 9.04(E),
SHALL NOT BE SUFFICIENT TO PAY THE COSTS REMAINING FOR RESTORATION TO BE
COMPLETED OR TO PAY ANY SHORTFALL IN OPERATING INCOME NEEDED TO PAY IN FULL
BORROWER'S DEBT SERVICE PAYMENTS ON THE LOAN AND OPERATING EXPENSES ANTICIPATED
TO BE INCURRED DURING THE PERIOD OF RESTORATION, NO FURTHER DISBURSEMENT OF THE
RESTORATION PROCEEDS WILL BE MADE UNTIL SUCH FUNDS, IN CASH OR BY A CASH
EQUIVALENT ACCEPTABLE TO LENDER (ALSO CALLED A "RESTORATION DEFICIENCY
DEPOSIT"), ARE DEPOSITED (I) BY BORROWER, WITHIN TEN (10) DAYS AFTER LENDER'S
NOTICE OF SUCH DEFICIENCY, OR (II) IN LENDER'S REASONABLE DISCRETION, FOLLOWING
BORROWER'S WRITTEN REQUEST, BY WITHDRAWING CERTAIN FUNDS THEN HELD BY