NET PROCEEDS SHALL, UNTIL COMPLETION
OF THE RESTORATION, BE HELD IN TRUST FOR LENDER AND SHALL BE SEGREGATED FROM
OTHER FUNDS OF BORROWER TO BE USED TO PAY FOR THE COST OF RESTORATION IN
ACCORDANCE WITH THE TERMS HEREOF.
58
5.3.2
MAJOR CASUALTY OR CONDEMNATION.
(A)
IF A CASUALTY OR CONDEMNATION
HAS OCCURRED TO THE PROPERTY AND THE NET PROCEEDS (LESS ANY BUSINESS
INTERRUPTION PROCEEDS) ARE EQUAL TO OR GREATER THAN THE RESTORATION THRESHOLD OR
THE COSTS OF COMPLETING THE RESTORATION IS EQUAL TO OR GREATER THAN THE
RESTORATION THRESHOLD, LENDER SHALL MAKE THE NET PROCEEDS AVAILABLE FOR THE
RESTORATION, PROVIDED THAT EACH OF THE FOLLOWING CONDITIONS ARE MET:
(I)
NO EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING;
(II)
(A) IN THE EVENT THE NET PROCEEDS ARE INSURANCE PROCEEDS, LESS
THAN THIRTY PERCENT (30%) OF THE TOTAL FLOOR AREA OF THE IMPROVEMENTS AT THE
PROPERTY HAS BEEN DAMAGED, DESTROYED OR RENDERED UNUSABLE AS A RESULT OF SUCH
CASUALTY OR (B) IN THE EVENT THE NET PROCEEDS ARE AN AWARD, (1) (X) LESS THAN
TEN PERCENT (10%) OF THE AIR RIGHTS CONSTITUTING A PORTION OF THE PROPERTY IS
TAKEN, AND (Y) LESS THAN TEN PERCENT (10%) OF THE LAND CONSTITUTING A PORTION OF
THE PROPERTY IS TAKEN AND SUCH LAND IS LOCATED ALONG THE PERIMETER OR PERIPHERY
OF THE PROPERTY, AND (2) NO PORTION OF THE IMPROVEMENTS IS THE SUBJECT OF THE
CONDEMNATION (OTHER THAN IMMATERIAL PORTIONS THEREOF WHICH DO NOT AFFECT (X) THE
USE OR OPERATION OF THE PROPERTY, (Y) THE NET OPERATING INCOME OR VALUE OF THE
PROPERTY IN ANY MATERIAL RESPECT AND (Z) THE COMPLIANCE OF THE PROPERTY WITH
APPLICABLE LEGAL REQUIREMENTS);
(III)
LEASES REQUIRING PAYMENT OF ANNUAL RENT EQUAL TO AT LEAST SEVENTY
PERCENT (70%) OF THE GROSS REVENUE RECEIVED BY BORROWER DURING THE TWELVE (12)
MONTH PERIOD IMMEDIATELY PRECEDING THE CASUALTY OR CONDEMNATION SHALL REMAIN IN
FULL FORCE AND EFFECT DURING AND AFTER COMPLETION OF THE RESTORATION WITHOUT
ABATEMENT OF RENT BEYOND THE TIME REQUIRED FOR RESTORATION, NOTWITHSTANDING THE
OCCURRENCE OF SUCH CASUALTY OR CONDEMNATION;
(IV)
BORROWER SHALL COMMENCE THE INITIAL PROCEEDINGS TO COMMENCE
RESTORATION (COMMENCEMENT FOR PURPOSES HEREOF SHALL BE DEEMED TO INCLUDE THE
FILING FOR A BUILDING PERMIT OR OTHER INITIAL PERMITS WITH RESPECT TO SUCH
RESTORATION) AS SOON AS REASONABLY PRACTICABLE (BUT IN NO EVENT LATER THAN SIXTY
(60) DAYS AFTER SUCH CASUALTY OR CONDEMNATION, WHICHEVER THE CASE MAY BE,
OCCURS) AND SHALL DILIGENTLY PURSUE THE SAME TO SATISFACTORY COMPLETION;
(V)
LENDER SHALL BE SATISFIED IN ITS GOOD FAITH OPINION THAT THE
PROPERTY SHALL PRODUCE SUFFICIENT CASH FLOW TO PAY ALL OPERATING EXPENSES AND
ALL PAYMENTS OF PRINCIPAL AND INTEREST UNDER THE NOTE WILL BE PAID DURING THE
PERIOD REQUIRED FOR RESTORATION FROM (A) THE NET PROCEEDS, OR (B) OTHER FUNDS OF
BORROWER;
(VI)
LENDER SHALL BE SATISFIED THAT THE RESTORATION WILL BE COMPLETED
ON OR BEFORE THE EARLIEST TO OCCUR OF (A) THE DATE THREE (3) MONTHS PRIOR TO THE
MATURITY DATE, (B) SUCH TIME AS MAY BE REQUIRED