UNDER APPLICABLE LEGAL
REQUIREMENTS IN ORDER TO REPAIR AND RESTORE THE PROPERTY TO THE CONDITION IT WAS
IN IMMEDIATELY PRIOR TO SUCH CASUALTY OR TO AS NEARLY AS POSSIBLE THE CONDITION
IT WAS IN IMMEDIATELY PRIOR TO SUCH CONDEMNATION, AS APPLICABLE OR (C) THE
EXPIRATION OF THE INSURANCE COVERAGE REFERRED TO IN SECTION 5.1.1(A)(III),
UNLESS BORROWER DEPOSITS SUFFICIENT ADDITIONAL FUNDS WITH LENDER AS DETERMINED
BY LENDER IN GOOD FAITH;
(VII)
THE PROPERTY AND THE USE THEREOF AFTER THE RESTORATION WILL BE IN
MATERIAL COMPLIANCE WITH AND PERMITTED UNDER ALL APPLICABLE LEGAL REQUIREMENTS;
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(VIII)
THE RESTORATION SHALL BE DONE AND COMPLETED BY BORROWER IN AN
EXPEDITIOUS AND DILIGENT FASHION AND IN COMPLIANCE WITH ALL APPLICABLE LEGAL
REQUIREMENTS IN ALL MATERIAL RESPECTS; AND
(IX)
SUCH CASUALTY OR CONDEMNATION, AS APPLICABLE, DOES NOT RESULT IN
THE LOSS OF ACCESS TO THE PROPERTY OR THE RELATED IMPROVEMENTS.
(B)
THE NET PROCEEDS SHALL BE PAID DIRECTLY TO LENDER AND HELD BY
LENDER IN AN INTEREST-BEARING ACCOUNT AND, UNTIL DISBURSED IN ACCORDANCE WITH
THE PROVISIONS OF THIS SECTION 5.3.2, SHALL CONSTITUTE ADDITIONAL SECURITY FOR
THE DEBT. THE NET PROCEEDS SHALL BE INVESTED IN PERMITTED INVESTMENTS FROM TIME
TO TIME SELECTED BY BORROWER SUBJECT TO THE SAME TERMS AND CONDITIONS APPLICABLE
TO THE INVESTMENT OF RESERVE FUNDS IN PERMITTED INVESTMENTS SET FORTH IN THE
CASH MANAGEMENT AGREEMENT. THE NET PROCEEDS SHALL BE DISBURSED BY LENDER TO, OR
AS DIRECTED BY, BORROWER FROM TIME TO TIME DURING THE COURSE OF THE RESTORATION,
UPON RECEIPT OF EVIDENCE SATISFACTORY TO LENDER THAT (A) ALL REQUIREMENTS SET
FORTH IN SECTION 5.3.2(A) HAVE BEEN SATISFIED IN ALL MATERIAL RESPECTS, (B) ALL
MATERIALS INSTALLED AND WORK AND LABOR PERFORMED (EXCEPT TO THE EXTENT THAT THEY
ARE TO BE PAID FOR OUT OF THE REQUESTED DISBURSEMENT) IN CONNECTION WITH THE
RESTORATION HAVE BEEN PAID FOR IN FULL (SUBJECT TO APPLICABLE RETAINAGE
AMOUNTS), AND (C) THERE EXIST NO NOTICES OF PENDENCY, STOP ORDERS, MECHANIC'S OR
MATERIALMAN'S LIENS OR NOTICES OF INTENTION TO FILE SAME, OR ANY OTHER LIENS OR
ENCUMBRANCES OF ANY NATURE WHATSOEVER ON THE PROPERTY ARISING OUT OF THE
RESTORATION WHICH HAVE NOT EITHER BEEN FULLY BONDED TO THE SATISFACTION OF
LENDER AND DISCHARGED OF RECORD OR IN THE ALTERNATIVE FULLY INSURED TO THE
SATISFACTION OF LENDER BY THE TITLE COMPANY ISSUING THE TITLE INSURANCE POLICY.
(C)
ALL PLANS AND SPECIFICATIONS REQUIRED IN CONNECTION WITH THE
RESTORATION SHALL BE SUBJECT TO PRIOR REASONABLE APPROVAL OF LENDER AND AN
INDEPENDENT ARCHITECT SELECTED BY LENDER (THE "CASUALTY CONSULTANT"). THE PLANS
AND SPECIFICATIONS SHALL REQUIRE THAT THE RESTORATION BE COMPLETED IN A
FIRST-CLASS WORKMANLIKE MANNER AT LEAST EQUIVALENT TO THE QUALITY AND CHARACTER
OF THE ORIGINAL WORK IN THE IMPROVEMENTS (PROVIDED, HOWEVER, THAT IN THE CASE OF
A PARTIAL CONDEMNATION, THE RESTORATION SHALL BE DONE TO THE EXTENT REASONABLY
PRACTICABLE AFTER TAKING INTO ACCOUNT THE CONSEQUENCES OF SUCH PARTIAL
CONDEMNATION), SO THAT UPON COMPLETION THEREOF, THE PROPERTY SHALL BE AT LEAST
EQUAL IN VALUE AND GENERAL UTILITY TO THE PROPERTY PRIOR TO THE DAMAGE