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such casualty or Condemnation. Developer shall take all action reasonably required by City <br />in connection therewith to protect the interests of Developer and/or City, and City shall be <br />entitled (without regard to the adequacy of its security) to participate in any action, claim, <br />adjustment or proceeding and to be represented therein by counsel of its choice. Developer <br />shall not settle, adjust, or compromise any claim, action, adjustment or proceeding without <br />prior written approval, which approval shall not be unreasonably withheld or delayed. <br />19.3. Delivery of Proceeds to City. If the proceeds from any casualty insurance <br />is in excess of $500,000, Developer shall, subject to any superior rights of the Senior <br />Lender, deliver such proceeds to the City immediately upon receipt. <br />19.4. Application of Casualty Insurance Proceeds. Subject to the rights of the <br />Senior Lender, any proceeds collected (the "Proceeds") under any casualty insurance <br />policy described in this Agreement shall be disbursed to Developer as provided below, but <br />only upon fulfillment of each of the following conditions (the "Restoration Conditions") <br />within ninety (90) days (unless extended by mutual agreement of Developer and City) <br />following the occurrence of the damage for which the Proceeds are collected: <br />(a) Developer shall demonstrate to City's reasonable satisfaction that <br />the Proceeds (together with amounts deposited by Developer pursuant to subparagraph (b)) <br />will be adequate to repair the Improvements and to restore the fair market value of the <br />Property, within two years (or such longer time period reasonably determined by City), to <br />at least the value it had immediately prior to sustaining the damage. Such demonstration <br />shall include delivery to City of: (i) plans and specifications reasonably satisfactory to City; <br />and, (ii) a construction contract in form and content, and with a contractor, reasonably <br />satisfactory to City. <br />(b) To the extent that the Proceeds are insufficient to accomplish the <br />restoration required above, Developer shall deliver to City (the "Shortfall Funds") in the <br />amount of such shortfall, which funds shall be assigned to City as security for Developer's <br />obligation hereunder and held and disbursed in the same manner as the Proceeds. <br />(c) Developer shall execute such documents as City reasonably requires <br />to evidence and secure Developer's obligation to use all amounts disbursed for the diligent <br />restoration of the Property. <br />(d) No Event of Default shall remain uncured. <br />19.5. Method of Disbursement and Undisbursed Funds. Any Proceeds and <br />Shortfall Funds to be disbursed to Developer shall be held by City and disbursed in <br />accordance with then customary disbursement procedures and related provisions. Any <br />amounts remaining undisbursed following completion of such restoration shall be returned <br />to Developer up to the amount of any Shortfall Funds deposited by Developer, and any <br />other amounts remaining shall either be paid to Developer or applied by City against any <br />obligations to City that are secured by a lien on the Property, as they elect in their sole and <br />absolute discretion. <br />19.6. Failure to Satisfy Conditions. In the event that Developer fails to fulfill <br />44 <br />The Crossroads at Washington <br />City NSP Loan Agreement <br />