Common use of Application of Insurance / Condemnation Proceeds Clause in Contracts

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.

Application of Insurance / Condemnation Proceeds. In Agent for the event ratable benefit of the Lenders is hereby authorized to participate with the Borrower in any proceeding for the condemnation or other taking of any fire Covered Person's property and each Covered Person from time to time will deliver to Agent all instruments reasonably requested by Agent to permit such participation. If an Unwaived Event of Default exists, Agent is hereby authorized to collect, for the ratable benefit of the Lenders, all Insurance/Condemnation Proceeds directly and, after deducting the expenses, if any, incurred by Agent in collection or other casualty handling thereof, apply such Insurance/Condemnation Proceeds as a prepayment to be applied in the manner required under Section . If no Unwaived Event of Default exists, Agent will permit such Covered Person to use such Insurance/Condemnation Proceeds or any part thereof to replace, repair, restore or rebuild the property giving rise to such Insurance/Condemnation Proceeds in a diligent and expeditious manner with materials and workmanship of substantially the same quality as existed before the condemnation, taking, loss, damage or destruction, and if such Covered Person elects so to proceed, it shall commence the work of replacement, repair, restoration or rebuilding as soon as practicable and proceed diligently with it until completion. In such event, Agent shall hold such Insurance/Condemnation Proceeds and disburse the same for such repair work. Plans and specifications for any such repair or restoration (if the amount involved is in excess of $250,000) shall be reasonably satisfactory to Agent and the Required Lenders and shall be submitted to Agent prior to commencement of the work and shall be subject to the Property or reasonable approval of Agent and 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, Required Lenders. Expenditures by 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 repairing or replacement in its sole discretion, all excess 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 amount of the Loan or if such proceeds are insufficient, then Borrower Insurance/Condemnation Proceeds 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, deemed Capital Expenditures subject to the same conditions set forth limits in Section . In the event that any Insurance/Condemnation Proceeds remain after application as described above, they shall be applied to make a prepayment to Agent, for the ratable benefit of Lenders, 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 manner required 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 DepartmentSection .