EVENT OF DEFAULT SHALL HAVE
OCCURRED AND BE THEN CONTINUING, THEN THE PROCEEDS OR THE AWARD, AS THE CASE MAY
BE (AFTER REIMBURSEMENT OF ANY EXPENSES INCURRED BY LENDER), SHALL BE APPLIED TO
PAY FOR OR REIMBURSE BORROWER FOR THE COST OF RESTORING, REPAIRING, REPLACING OR
REBUILDING THE PROPERTY (THE "RESTORATION"), IN THE MANNER SET FORTH HEREIN.
BORROWER SHALL COMMENCE AND DILIGENTLY PROSECUTE SUCH RESTORATION.
NOTWITHSTANDING THE FOREGOING, IN NO EVENT SHALL LENDER BE OBLIGATED TO APPLY
THE PROCEEDS OR AWARD TO REIMBURSE BORROWER FOR THE COST OF RESTORATION UNLESS,
IN ADDITION TO SATISFACTION OF THE FOREGOING CONDITIONS, BOTH (X) BORROWER SHALL
PAY (AND IF REQUIRED BY LENDER, BORROWER SHALL DEPOSIT WITH LENDER IN
ADVANCE) ALL COSTS OF SUCH RESTORATION IN EXCESS OF THE NET AMOUNT OF THE
PROCEEDS OR THE AWARD MADE AVAILABLE PURSUANT TO THE TERMS HEREOF; AND
(Y) LENDER SHALL HAVE RECEIVED EVIDENCE REASONABLY SATISFACTORY TO IT THAT
DURING THE PERIOD OF THE RESTORATION, THE RENTS WILL BE AT LEAST EQUAL TO THE
SUM OF THE OPERATING EXPENSES AND DEBT SERVICE, AS REASONABLY DETERMINED BY
LENDER.
7.4.2
APPLICATION TO DEBT.
EXCEPT AS PROVIDED IN SECTION
7.4.1, ANY PROCEEDS AND/OR AWARD MAY, AT THE OPTION OF LENDER IN ITS DISCRETION,
BE APPLIED TO THE PAYMENT OF (I) ACCRUED BUT UNPAID INTEREST ON THE NOTE,
(II) THE UNPAID PRINCIPAL AND (III) OTHER CHARGES DUE UNDER THE NOTE AND/OR ANY
OF THE OTHER LOAN DOCUMENTS, OR APPLIED TO REIMBURSE BORROWER FOR THE COST OF
ANY RESTORATION, IN THE MANNER SET FORTH IN SECTION 7.4.3.
ANY SUCH PREPAYMENT
OF THE LOAN SHALL BE WITHOUT ANY YIELD MAINTENANCE PREMIUM, UNLESS AN EVENT OF
DEFAULT HAS OCCURRED
64
AND IS CONTINUING AT THE TIME THE PROCEEDS ARE RECEIVED FROM THE INSURANCE
COMPANY OR THE AWARD IS RECEIVED FROM THE CONDEMNING AUTHORITY, AS THE CASE MAY
BE, IN WHICH EVENT BORROWER SHALL PAY TO LENDER AN ADDITIONAL AMOUNT EQUAL TO
THE YIELD MAINTENANCE PREMIUM, IF ANY, THAT MAY BE REQUIRED WITH RESPECT TO THE
AMOUNT OF THE PROCEEDS OR AWARD APPLIED TO THE UNPAID PRINCIPAL.
NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN, IF ANY PROCEEDS OR
AWARD ARE NOT REQUIRED TO BE MADE AVAILABLE FOR A RESTORATION AND ARE RETAINED
AND APPLIED BY LENDER TOWARD THE PAYMENT OF THE DEBT, BORROWER MAY PREPAY THE
ENTIRE OUTSTANDING PRINCIPAL WITHOUT PAYMENT OF ANY YIELD MAINTENANCE PREMIUM
PROVIDED THAT (X) SUCH PREPAYMENT IS MADE WITHIN 90 DAYS AFTER LENDER APPLIES
SUCH PROCEEDS OR AWARD TO THE DEBT AND (Y) TOGETHER WITH SUCH PREPAYMENT,
BORROWER PAY TO LENDER ALL ACCRUED AND UNPAID INTEREST AND ALL OTHER SUMS
PAYABLE UNDER THE LOAN DOCUMENTS.
7.4.3
PROCEDURE FOR APPLICATION TO RESTORATION.
IF BORROWER
IS ENTITLED TO REIMBURSEMENT OUT OF THE PROCEEDS OR AN AWARD HELD BY LENDER,
SUCH PROCEEDS OR AWARD SHALL BE DISBURSED FROM TIME TO TIME FROM THE
CASUALTY/CONDEMNATION SUBACCOUNT UPON LENDER BEING FURNISHED WITH (I) EVIDENCE
SATISFACTORY TO LENDER OF THE ESTIMATED COST OF COMPLETION OF THE RESTORATION,
(II) A FIXED PRICE OR GUARANTEED MAXIMUM COST CONSTRUCTION