ALL DETERMINATIONS AND DECISIONS WITH RESPECT TO SUCH "ALL RISK" POLICIES OF
INSURANCE.
AGENT SHALL HAVE NO DUTY TO EXERCISE ANY RIGHTS OR POWERS GRANTED TO
IT PURSUANT TO THE FOREGOING POWER-OF-ATTORNEY.
BORROWER SHALL PROMPTLY NOTIFY
AGENT OF ANY EVENT OF LOSS AND OF ANY LOSS, DAMAGE, OR DESTRUCTION TO THE
COLLATERAL IN THE AMOUNT OF $250,000 OR MORE, WHETHER OR NOT COVERED BY
INSURANCE.
AFTER DEDUCTING FROM THE INSURANCE PROCEEDS RECEIVED IN CONNECTION
WITH SUCH EVENT OF LOSS THE EXPENSES, IF ANY, INCURRED BY AGENT IN THE
COLLECTION OR HANDLING THEREOF, AGENT SHALL EITHER, AT ITS OPTION, APPLY SUCH
PROCEEDS TO THE REDUCTION OF THE OBLIGATIONS IN ACCORDANCE WITH SECTION 1.3(D)
OR PERMIT OR REQUIRE SUCH CREDIT PARTY TO USE SUCH MONEY, OR ANY PART THEREOF,
TO REPLACE, REPAIR, RESTORE OR REBUILD THE COLLATERAL IN A DILIGENT AND
EXPEDITIOUS MANNER WITH MATERIALS AND WORKMANSHIP OF SUBSTANTIALLY THE SAME
QUALITY AS EXISTED BEFORE THE LOSS, DAMAGE OR DESTRUCTION.
NOTWITHSTANDING THE
FOREGOING, IF AN EVENT OF LOSS GIVING RISE TO INSURANCE PROCEEDS COULD NOT
REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT (AFTER GIVING EFFECT TO
THE APPLICATION OF THE INSURANCE PROCEEDS TO REPAIR AND RESTORATION) AND SUCH
INSURANCE PROCEEDS DO NOT EXCEED THE DOLLAR EQUIVALENT OF $2,000,000 IN THE
AGGREGATE, THE APPLICABLE CREDIT PARTY MAY ELECT, IN ITS DISCRETION, TO REPLACE,
RESTORE, REPAIR OR REBUILD THE PROPERTY; PROVIDED, THAT IF SUCH CREDIT PARTY HAS
NOT COMPLETED OR ENTERED INTO BINDING AGREEMENTS TO COMPLETE SUCH REPLACEMENT,
RESTORATION, REPAIR OR REBUILDING WITHIN 270 DAYS OF SUCH CASUALTY, AGENT MAY
APPLY SUCH INSURANCE PROCEEDS TO THE OBLIGATIONS IN ACCORDANCE WITH SECTION
1.3(D).
ALL INSURANCE PROCEEDS THAT ARE TO BE MADE AVAILABLE TO BORROWER OR THE
APPLICABLE RBC SWISS GROUP MEMBER TO REPLACE, REPAIR, RESTORE OR REBUILD THE
COLLATERAL SHALL BE APPLIED BY AGENT TO REDUCE THE OUTSTANDING PRINCIPAL BALANCE
OF THE U.S. REVOLVING LOAN OR THE SCHAUBLIN REVOLVING LOAN, AS THE CASE MAY BE
(WHICH APPLICATION SHALL NOT RESULT IN A PERMANENT REDUCTION OF EITHER REVOLVING
LOAN COMMITMENT) AND UPON SUCH APPLICATION, AGENT SHALL ESTABLISH A RESERVE
AGAINST THE U.S. BORROWING BASE OR THE SCHAUBLIN BORROWING BASE, AS APPLICABLE,
IN AN AMOUNT EQUAL TO THE AMOUNT OF SUCH PROCEEDS SO APPLIED.
THEREAFTER, SUCH
FUNDS SHALL BE MADE AVAILABLE TO SUCH CREDIT PARTY TO PROVIDE FUNDS TO REPLACE,
REPAIR, RESTORE OR REBUILD THE COLLATERAL AS
41
FOLLOWS: (I) BORROWER SHALL REQUEST A U.S. REVOLVING CREDIT ADVANCE OR A
SCHAUBLIN REVOLVING CREDIT ADVANCE (AS APPLICABLE) BE MADE TO SUCH CREDIT PARTY
IN THE AMOUNT REQUESTED TO BE RELEASED; (II) SO LONG AS THE CONDITIONS SET FORTH
IN SECTION 2.2 HAVE BEEN MET AND SUBJECT TO THE PROVISIONS OF ANY MORTGAGE
ENCUMBERING SUCH COLLATERAL, REVOLVING LENDERS SHALL MAKE SUCH U.S. REVOLVING
CREDIT ADVANCE OR SCHAUBLIN REVOLVING CREDIT ADVANCE (AS APPLICABLE); AND (III)
IN THE CASE OF INSURANCE PROCEEDS APPLIED AGAINST EITHER REVOLVING LOAN, THE
RESERVE ESTABLISHED WITH RESPECT TO SUCH INSURANCE PROCEEDS SHALL BE REDUCED BY
THE AMOUNT OF SUCH REVOLVING CREDIT ADVANCE.
TO