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200003557 priority and proportions as Lender in its discretion shall deem proper or, at the discretion of Lender, the same shall be paid, either in whole or in part, to Borrower. If Lender shall receive and retain Net Proceeds, the lien of this Security Instrument shall be reduced only by the amount received and retained by Lender and actually applied by Lender in reduction of the Debt. (e) Notwithstanding the foregoing provisions of this Section 3.8, should the K Mart Lease allow the tenant thereunderto use any insurance proceeds forthe restoration and repairof the Property, then such proceeds shall be made available to such tenant pursuant to the terms of the K Mart Lease. Lender acknowledges that if such tenant under the K Mart Lease is self- insuring its obligation to rebuild as allowed by the K Mart Lease, no insurance proceeds will be paid to Lender; provided, however, in the event the tenant under the K Mart Lease elects not to rebuild as set forth in the K Mart Lease, any reimbursements made by the tenant under the K Mart Lease on account of such self- insurance shall be deemed Net Proceeds. Section 3.9 Leases and Rents. (a) Lender acknowledges that a portion of the Real Property is currently leased to K Mart Corporation pursuant to the K Mart Lease. All proposed future leases of all or a portion of the Real Property shall be subject to the priorwritten approval of Lender. Upon request of Lender from time to time, Borrower shall provide Lender with complete copies of all Leases then in effect, which copies shall be deemed to be certified by Borrower to Lender as true, complete and accurate copies. (b) Borrower (i) shall observe and perform all obligations imposed upon the lessor under the Leases and shall not do or permit to be done anything to impair the value of the Leases as security for the Debt; (ii) shall promptly send copies to Lender of all notices of default which Borrower shall send or receive under any Lease; (iii) shall enforce in a commercially reasonable manner all of the terms, covenants and conditions contained in the Leases upon the part of the lessee thereunder to be observed or performed; (iv) shall not collect any of the Rents more than one (1) month in advance (provided that a security deposit shall not be deemed rent collected in advance); (v) shall not execute any other assignment of the lessor's interest in the Leases or the Rents; (vi) shall not (A) waive, modify or terminate the material terms of any Lease (including without limitation shortening the lease term, reducing rents or granting rent abatements, or accepting a surrender of all or any portion of the leased space) without, in each case, the prior written consent of Lender, which consent shall not be unreasonably withheld or delayed if the waiver, modification or termination does not materially and adversely affect the value of the Property taken as a whole and provided further that such Lease, as modified is otherwise in compliance with the requirements of this Security Instrument, or (B) cancel orterminate any Lease or accept a surrender thereof or convey ortransfer or suffer or permit a conveyance or transfer of the Land or of any interest therein so as to effect a merger of the estates and rights of, or a termination or diminution of the obligations of, lessees thereunder; (vii) shall not cancel or terminate, nor waive, modify or terminate the material terms of any guaranty, letter of credit or other credit support with respect to any Lease without the prior written consent of Lender; and (viii) shall not consent to any assignment of, or subletting under, any Lease not in accordance with express terms thereof, without the prior written consent of Lender. Notwithstanding the foregoing, subdivisions (ii), (vi), (vii) and (viii) shall not apply to residential Leases for space in a multifamily residential property; provided, that Borrower's actions are consistent with those of a prudent landlord of multifamily residential property. (c) Borrower represents and warrants that Borrower has not executed any prior assignment of the Rents or of the Leases (other than an assignment securing indebtedness that will be paid -off and discharged with the proceeds of the loan secured by this Security Instrument). Section 3.10 Maintenance of Property. Borrower shall cause the Property to be maintained in a good and safe condition and repair. The Improvements and the Personal Property shall not be removed, demolished or materially altered (except for normal replacement of the Personal Property) without the consent of Lender. Borrower shall promptly repair, replace or rebuild any part of the Property which may ATLANTA4181845.4 GMACCM (SLP) — DOT (8/98) 13 Grand Isle, Nebraska