DISCRETION, ALL PROCEEDS OF INSURANCE OR
CONDEMNATION (INDIVIDUALLY AND COLLECTIVELY REFERRED TO AS "PROCEEDS"), AFTER
DEDUCTION OF ALL EXPENSES OF COLLECTION AND SETTLEMENT, INCLUDING ATTORNEYS' AND
ADJUSTERS' FEES AND CHARGES, SHALL BE APPLIED TO THE DEBT IN ACCORDANCE WITH
SECTION 21.1.
(B)
NOTWITHSTANDING ANYTHING IN SECTION 16.1(A) TO THE CONTRARY,
IN THE EVENT OF ANY CASUALTY TO THE IMPROVEMENTS OR ANY CONDEMNATION OF PART OF
THE PROJECT, THE LENDERS AGREE TO MAKE THE PROCEEDS AVAILABLE FOR RESTORATION OF
THE IMPROVEMENTS IF (I) NO EVENT OF DEFAULT EXISTS THAT WILL NOT BE CURED UPON
BORROWER'S COMMENCEMENT OF RESTORATION, (II) ALL PROCEEDS ARE DEPOSITED WITH THE
AGENT, (III) IN THE LENDERS' REASONABLE JUDGMENT, THE AMOUNT OF PROCEEDS
AVAILABLE FOR RESTORATION OF THE IMPROVEMENTS (TOGETHER WITH UNDISBURSED PORTION
OF THE FACILITY A COMMITMENT, IF ANY, ALLOCATED FOR THE COST OF THE CONSTRUCTION
AND ANY SUMS OR OTHER SECURITY ACCEPTABLE TO THE LENDERS DEPOSITED WITH THE
AGENT BY BORROWER FOR SUCH PURPOSE) ARE SUFFICIENT TO PAY THE FULL AND COMPLETE
COSTS OF SUCH RESTORATION, (IV) IN THE LENDERS' REASONABLE DETERMINATION, THE
PROJECT CAN BE RESTORED TO AN ARCHITECTURALLY AND ECONOMICALLY VIABLE PROJECT IN
COMPLIANCE WITH APPLICABLE LAWS, (V) GUARANTOR REAFFIRMS THE COMPLETION GUARANTY
IN WRITING, (VI) IN THE LENDERS' REASONABLE DETERMINATION, SUCH RESTORATION IS
LIKELY TO BE COMPLETED NO LATER THAN THE FACILITY A MATURITY DATE, (VII) IN THE
LENDERS' REASONABLE JUDGMENT, ANY OPERATING DEFICITS, INCLUDING ALL PAYMENTS OF
INTEREST AND PRINCIPAL DUE HEREUNDER, THAT SHALL BE INCURRED BY REASON OF THE
CASUALTY OR CONDEMNATION SHALL BE COVERED BY THE PROCEEDS, THE INSURANCE
COVERAGE REFERRED TO IN SECTION 15.2(A)(I) ABOVE, AND OTHER FUNDS OF BORROWER OR
FACILITY A LOAN PROCEEDS THAT ARE AVAILABLE TO BE DISBURSED FOR CONSTRUCTION
COSTS IN ACCORDANCE WITH THE CONSTRUCTION BUDGET, AND (VIII) IN THE LENDERS'
REASONABLE JUDGMENT, FOLLOWING THE RESTORATION OF THE PROJECT, THE LOAN TO VALUE
RATIO SHALL NOT EXCEED 60%.
SECTION 16.2
BORROWER'S OBLIGATION TO REBUILD.
(A)
IF THE LENDERS DO NOT ELECT (OR DO NOT HAVE THE RIGHT) TO
APPLY THE PROCEEDS TO THE DEBT, AS PROVIDED IN SECTION 16.1 ABOVE, BORROWER
SHALL:
(I)
PROCEED WITH DILIGENCE TO MAKE SETTLEMENT WITH INSURERS OR
GOVERNMENTAL AUTHORITIES AND CAUSE THE PROCEEDS TO BE DEPOSITED WITH THE AGENT;
87
(II)
IN THE EVENT OF ANY DELAY IN MAKING SETTLEMENT WITH INSURERS OR
GOVERNMENTAL AUTHORITIES OR EFFECTING COLLECTION OF THE PROCEEDS, DEPOSIT WITH
THE AGENT SUCH AMOUNT AS THE REQUIRED LENDERS REASONABLY DEEMS APPROPRIATE TO
INSURE THE TIMELY COMPLETION OF CONSTRUCTION AS AFORESAID;
(III)
IF THE PROCEEDS AND THE UNDISBURSED PORTION OF THE FACILITY A
COMMITMENT ARE INSUFFICIENT TO MAINTAIN THE LOANS IN BALANCE AS CALCULATED
PURSUANT TO SECTION 11.1, PROMPTLY MAKE A DEFICIENCY DEPOSIT PURSUANT TO
SECTION 11.1 AS NECESSARY TO PLACE THE LOANS IN BALANCE; AND
(IV)
PROMPTLY PROCEED WITH THE RESUMPTION OF CONSTRUCTION OF THE
IMPROVEMENTS, INCLUDING THE REPAIR OF ALL DAMAGE RESULTING FROM SUCH FIRE,
CONDEMNATION OR OTHER CAUSE AND RESTORATION TO ITS FORMER CONDITION.
(B)
ANY REQUEST BY BORROWER FOR A DISBURSEMENT BY THE