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There is no contract or agreement providing for services to or maintenance of the Mortgaged <br /> Property which cannot be cancelled upon 30 days' or less notice. <br /> ARTICLE III <br /> CASUALTY; CONDEMNATION <br /> Section 3.1 Casualty, Repair, Proof of Loss. If any portion of the Mortgaged Property <br /> shall be damaged or destroyed by any cause (a"Casualty"), Developer shall: <br /> (a) give immediate notice to the City; and <br /> (b) promptly commence and diligently pursue to completion (in accordance <br /> with plans and specifications approved by City) the restoration, repair and rebuilding of the <br /> Mortgaged Property as nearly as possible to its value, condition and character immediately prior <br /> to the Casualty; and <br /> (c) if the Casualty is covered by insurance, immediately make proof of loss <br /> and collect all insurance proceeds, all such proceeds to be payable to City or as City shall direct. <br /> If an Event of Default shall be in existence, or if Developer shall fail to provide notice to City of <br /> filing proof of loss, or if Developer shall not be diligently proceeding, in City's reasonable <br /> opinion, to collect such insurance proceeds, then City may,but is not obligated to, make proof of <br /> loss, and is authorized,but is not obligated, to settle any claim with respect thereto, and to collect <br /> the proceeds thereof. Developer shall not accept any settlement of an insurance claim, the result <br /> of which shall be a payment which is $10,000 or more less than the full amount of the claim, <br /> without the prior written consent of City. <br /> Section 3.2 Use of Insurance Proceeds. City shall make the net insurance proceeds <br /> received by it (after reimbursement of City's out-of pocket costs of collecting and disbursing the <br /> same) available to Developer to pay the cost of restoration, repair and rebuilding of the <br /> Mortgaged Property, subject to the following conditions: <br /> (a) There shall be no Event of Default in existence at the time of any <br /> disbursement of the insurance proceeds. <br /> (b) City shall have determined, in its reasonable discretion, that the cost of <br /> restoration, repair and rebuilding is and will be equal to or less than the amount of insurance <br /> proceeds and other funds deposited by Developer with City. <br /> (c) City shall have determined, in its reasonable discretion, that the <br /> restoration, repair and rebuilding can be completed in accordance with plans and specifications <br /> approved by City(such approval not to be unreasonably withheld), in accordance with codes and <br /> ordinances and in accordance with the terms, and within the time requirements in order to <br /> prevent termination, of any Lease, and in any event not less than six (6) months prior to the <br /> Maturity Date. <br /> (d) All funds shall be disbursed, at City's option, in accordance with City's <br /> customary disbursement procedures for construction loans. <br /> C-7 <br /> 455958v10 SJS EL185-31 <br />