25F - AGMT - 605-611 EAST WASHINGTON ST LOAN

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1902. Agency/City Attorney May Modify. The Agency/City Attorney may modify the type and amounts of insurance (including reasonable increases in policy limits) required pursuant to this Section. 1903. Claims and Proceedings. Developer shall give Agency/City immediate notice of any material casualty to any portion of the Property, whether or not covered by insurance, and of the initiation or threatened initiation of any proceeding for the condemnation or other taking for public or quasi-public use of any portion of the Property (collectively, "Condemnation"), and shall provide Agency/City with copies of all documents which pertain to any such casualty or Condemnation. Developer shall take all action reasonably required by Agency/City in connection therewith to protect the interests of Developer and/or City, and Agency/City shall be entitled (without regard to the adequacy of its security) to participate in any action, claim, adjustment or proceeding and to be represented therein by counsel of its choice. Developer shall not settle, adjust, or compromise any claim, action, adjustment or proceeding without prior written approval, which approval shall not be unreasonably withheld or delayed. 1904. Delivery of Proceeds to Agency/City. In the event that, notwithstanding the "lender's loss payable endorsement" requirement set forth above, the proceeds of any casualty insurance policy described herein are paid to Developer, Developer shall, subject to any superior rights of the Senior Lender, deliver such proceeds to the Agency and City immediately upon receipt. 1905. Application of Casualty Insurance Proceeds. Any proceeds collected ("Proceeds") under any casualty insurance policy described in this Agreement shall be disbursed to Developer as provided below, but only upon fulfillment of each of the following conditions ("Restoration Conditions") within ninety (90) days (unless extended by mutual agreement of Developer and Agency/City) following, the occurrence of the damage for which the Proceeds are collected: (a) Developer shall demonstrate to Agency/City's reasonable satisfaction that the Proceeds (together with amounts deposited by Developer pursuant to subparagraph (b)) will be adequate to repair the Improvements and to restore the fair market value of the Property, within a time period reasonably determined by Agency/City, to at least the value it had immediately prior to sustaining the damage. Such demonstration shall include delivery to Agency/City of (i) plans and specifications reasonably satisfactory to Agency/City, and (ii) a construction contract in form and content, and with a contractor, reasonably satisfactory to Agency/City. (b) To the extent that the Proceeds are insufficient to accomplish the restoration required above, Developer shall deliver to Agency/City funds ("Shortfall Funds") in the amount of such shortfall, which funds shall be assigned to City as security for Developer's obligation hereunder and held and disbursed in the same manlier as the Proceeds. (c) Developer shall execute such documents as City requires to evidence and secure Developer's obligation to use all amounts disbursed for the diligent restoration of the Property. (d) No Event of Default shall remain uncured. 1906. Method of Disbursement and Undisbursed Funds. Any Proceeds and Shortfall Funds to be disbursed to Developer shall be held by Agency/ City and disbursed in accordance with then customary disbursement procedures and related provisions. Any amounts remaining 54 25F-60