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200507874
<br />case may be, reimburse Lender for, all premiums thereon promptly, upon demand by Lender, with interest thereon
<br />at the Default Rate from the date paid by Lender to the date of repayment and such sum shall constitute a part of
<br />the Debt.
<br />(c) Borrower shall notify Lender of the renewal premium of each insurance policy and Lender shall
<br />be entitled to pay such amount on behalf of Borrower from the Basic Carrying Costs Sub - Account. With respect
<br />to insurance policies which require periodic payments (i.e., monthly or quarterly) of premiums, Lender shall be
<br />entitled to pay such amounts fifteen (15) days (or such lesser number of days as Lender shall determine) prior to
<br />the respective due dates of such installments.
<br />(d) The insurance required by this Security Instrument may, at the option of Borrower, be effected by
<br />blanket and/or umbrella policies issued to Borrower covering the Property provided that, in each case, the policies
<br />otherwise comply with the provisions of this Security Instrument and allocate to the Property, from time to time
<br />(but in no event less than once a year), the coverage specified by this Security Instrument, without possibility of
<br />reduction or coinsurance by reason of, or damage to, any other property (real or personal) named therein. If the
<br />insurance required by this Security Instrument shall be effected by any such blanket or umbrella policies,
<br />Borrower shall furnish to Lender (i) original policies or certified copies thereof, or an original certificate of
<br />insurance together with reasonable access to the original of such policy to review such policy's coverage of the
<br />Property, with schedules attached thereto showing the amount of the insurance provided under such policies
<br />applicable to the Property and (ii) an Officer's Certificate setting forth (A) the number of properties covered by
<br />such policy, (B) the location by city (if available, otherwise, county) and state of the properties, (C) the average
<br />square footage of the properties, (D) a brief description of the typical construction type included in the blanket
<br />policy and (E) such other information as Lender may reasonably request.
<br />Section 3.03. Assignment of Policies. (a) Borrower hereby assigns to Lender the proceeds of all insurance
<br />(other than worker's compensation and liability insurance) obtained pursuant to this Security Instrument, all of
<br />which proceeds shall be payable to Lender as collateral and further security for the payment of the Debt and the
<br />performance of the Cross - collateralized Borrowers' obligations hereunder and under the other Loan Documents, and
<br />Borrower hereby authorizes and directs the issuer of any such insurance to make payment of such proceeds directly
<br />to Lender. Except as otherwise expressly provided in Section 3.04 or elsewhere in this Article III, Lender shall have
<br />the option, in its discretion, and without regard to the adequacy of its security, to apply all or any part of the
<br />proceeds it may receive pursuant to this Article in such manner as Lender may elect to any one or more of the
<br />following: (i) the payment of the Debt, whether or not then due, in any proportion or priority as Lender, in its
<br />discretion, may elect, (ii) the repair or restoration of the Property, (iii) the cure of any Default or (iv) the
<br />reimbursement of the costs and expenses of Lender incurred pursuant to the terms hereof in connection with the
<br />recovery of the Insurance Proceeds. Nothing herein contained shall be deemed to excuse Borrower from repairing
<br />or maintaining the Property as provided in this Security Instrument or restoring all damage or destruction to the
<br />Property, regardless of the sufficiency of the Insurance Proceeds, and the application or release by Lender of any
<br />Insurance Proceeds shall not cure or waive any Default or notice of Default.
<br />(b) In the event of the foreclosure of this Security Instrument or any other transfer of title or
<br />assignment of all or any part of the Property in extinguishment, in whole or in part, of the Debt, all right, title and
<br />interest of Borrower in and to all policies of insurance required by this Security Instrument shall inure to the
<br />benefit of the successor in interest to Borrower or the purchaser of the Property. If, prior to the receipt by Lender
<br />of any proceeds, the Property or any portion thereof shall have been sold on foreclosure of this Security
<br />Instrument or by deed in lieu thereof or otherwise, or any claim under such insurance policy arising during the
<br />term of this Security Instrument is not paid until after the extinguishment of the Debt, and Lender shall not have
<br />received the entire amount of the Debt outstanding at the time of such extinguishment, whether or not a deficiency
<br />judgment on this Security Instrument shall have been sought or recovered or denied, then, the proceeds of any
<br />such insurance to the extent of the amount of the Debt not so received, shall be paid to and be the property of
<br />Lender, together with interest thereon at the Default Rate, and the reasonable attorney's fees, costs and
<br />disbursements incurred by Lender in connection with the collection of the proceeds which shall be paid to Lender
<br />and Borrower hereby assigns, transfers and sets over to Lender all of Borrower's right, title and interest in and to
<br />such proceeds. Notwithstanding any provisions of this Security Instrument to the contrary, Lender shall not be
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