Recovery on Contractor Warranties. So long as no Construction Event of Default has occurred and is continuing, the Construction Agent shall, at its cost in the name and on behalf of the City, negotiate, accept, and prosecute any claim for damages, compensation or other recoveries due from any contractors or subcontractors based on a breach of contract or breach of warranty (whether express or implied) and shall transfer any proceeds received on account of such collection efforts, net of any reasonable costs incurred by the Construction Agent in prosecuting such claim, to the City for deposit in any construction account or project fund established in connection with the Bonds or otherwise established by the City for the Project. If a Construction Event of Default has occurred and is continuing, the City is hereby expressly and irrevocably authorized, but not required, to exercise every right, option, power or authority which the Construction Agent has against any contractor or subcontractor and the City shall cause any such proceeds, net of any reasonable costs incurred or the City in prosecuting any claim or exercising any right, to be deposited in any construction account or project fund established in connection with the Bonds or otherwise established by the City for the Project. The Construction Agent and the City shall be entitled to reimbursement for any reasonable costs incurred by them in negotiating, accepting and prosecuting such claims.
Recovery on Contractor Warranties. Subject to the rights of the Construction Lender, so long as no Event of Default has occurred, Agent shall, at its cost and expense, in the name and on behalf of the Owner, negotiate, accept and prosecute any claim for damages, compensation or other recoveries due from any contractors or subcontractors based on a breach of contract or breach of warranty (whether express or implied) and shall be apply any proceeds received on account of such collection efforts to the construction, repair or renovation of the Improvements. If an Event of Default has occurred and is continuing, Owner is hereby expressly and irrevocably authorized, but not required, to exercise every right, option, power or authority inuring to Agent it has against any contractor or subcontractor. Unless either the Lessee's Parent is not then Investment Grade or an Event of Default has occurred and is continuing, the Agent shall be entitled to receive directly all such amounts paid or payable with respect to such claims, subject to the rights of the Lender and less any costs and expenses incurred by Owner or Lender in connection with exercise of their powers to enforce Agent's rights against contractors and subcontractors, and Agent shall apply such amounts to the construction, repair and renovation of the Improvements. If the conditions set forth in the preceding sentence relating to Agent's receipt of amounts paid or payable from contractors or subcontractors have not been satisfied or waived by Owner in writing, Owner shall be entitled to receive such amounts and Owner may apply such proceeds to the construction, repair of the Improvements or apply such amounts to pay Agent's obligations hereunder or under the Lease.
