Application of Insurance / Condemnation Proceeds. In the event of any fire or other casualty to the Property or the Development or any condemnation, eminent domain or taking proceedings (or proceedings in lieu thereof) (each a “Taking”) resulting in the taking of all or any portion thereof, Borrower shall have the right to rebuild the Development, and to use all available insurance or condemnation proceeds paid or awarded in connection therewith (collectively, the “Awards”) to pay for such rebuilding, provided that, as determined by the Department in its sole discretion, all of the following conditions are satisfied: (i) such proceeds are sufficient to keep the Loan in balance and rebuild the Development in a manner that provides adequate security to the Department for repayment of the Loan or if such proceeds are insufficient, then Borrower shall have funded any deficiency, (ii) the Department shall have the right to approve all plans and specifications for any major rebuilding and the right to supervise and approve disbursements of insurance or condemnation proceeds for rebuilding under a construction escrow or similar arrangement, and (c) no material breach or default then exists under the Loan Documents. If the casualty or condemnation affects only part of the Development and total rebuilding is infeasible, then proceeds may be used for partial rebuilding and partial repayment of the Loan in a manner that provides adequate security to the Department for repayment of the remaining balance of the Loan, subject to the same conditions set forth in the immediately preceding sentence. Otherwise, the Department shall be entitled to apply all such Awards towards costs incurred in securing the same and to the repayment of the Loan. The Department shall be entitled to actively participate in all negotiations, agreements, settlements, compromises and adjustments of any and all Awards and other claims contemplated above with respect to any casualty or Taking, including all claims with respect to all insurance policies provided hereunder or under the Deed of Trust and all Takings, and Department may deduct and retain from the Awards all expenses incurred by it in connection with any such settlement or adjustment, together with interest thereon as provided herein. Borrower shall not negotiate, agree to, settle, adjust, compromise or finalize any Award, or any other rights, claims, circumstances or facts underlying the same, without the express prior written consent of Department.
Appears in 5 contracts
Samples: Regulatory Agreement, Regulatory Agreement, Regulatory Agreement
