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200507874
<br />deemed to be a trustee or other fiduciary with respect to its receipt of any such proceeds, which may be
<br />commingled with any other monies of Lender; provided, however, that Lender shall use such proceeds for the
<br />purposes and in the manner permitted by this Security Instrument. Any proceeds deposited with Lender shall be
<br />held by Lender in an interest- bearing account, but Lender makes no representation or warranty as to the rate or
<br />amount of interest, if any, which may accrue on such deposit and shall have no liability in connection therewith.
<br />Interest accrued, if any, on the proceeds shall be deemed to constitute a part of the proceeds for purposes of this
<br />Security Instrument. The provisions of this Section 3.03(b) shall survive the termination of this Security
<br />Instrument by foreclosure, deed in lieu thereof or otherwise as a consequence of the exercise of the rights and
<br />remedies of Lender hereunder after a Default.
<br />Section 3.04. Casualty Restoration. (a) (i) In the event of any damage to or destruction of the Property,
<br />Borrower shall give prompt written notice to Lender (which notice shall set forth Borrower's good faith estimate of
<br />the cost of repairing or restoring such damage or destruction, or if Borrower cannot reasonably estimate the
<br />anticipated cost of restoration, Borrower shall nonetheless give Lender prompt notice of the occurrence of such
<br />damage or destruction, and will diligently proceed to obtain estimates to enable Borrower to quantify the anticipated
<br />cost and time required for such restoration, whereupon Borrower shall promptly notify Lender of such good faith
<br />estimate) and, provided that restoration does not violate any Legal Requirements, Borrower shall promptly
<br />commence and diligently prosecute to completion the repair, restoration or rebuilding of the Property so damaged or
<br />destroyed to a condition such that the Property shall be at least equal in value to that immediately prior to the
<br />damage to the extent practicable, in full compliance with all Legal Requirements and the provisions of all Leases,
<br />and in accordance with Section 3.04(b) below. Such repair, restoration or rebuilding of the Property are sometimes
<br />hereinafter collectively referred to as the "Work".
<br />(ii) Borrower shall not adjust, compromise or settle any claim for Insurance Proceeds without
<br />the prior written consent of Lender, which shall not be unreasonably withheld or delayed and Lender shall
<br />have the right, at Borrower's sole cost and expense, to participate in any settlement or adjustment of
<br />Insurance Proceeds; provided, however, that, except during the continuance of an Event of Default,
<br />Lender's consent shall not be required and Lender shall not have the right to participate in any settlement or
<br />adjustment of Insurance Proceeds with respect to the adjustment, compromising or settlement of any claim
<br />for Insurance Proceeds in an amount less than $300,000.
<br />(iii) Subject to Section 3.04(a)(iv), Lender shall apply any Insurance Proceeds which it may
<br />receive towards the Work in accordance with Section 3.04(b) and the other applicable sections of this
<br />Article III.
<br />(iv) If (A) a Default shall have occurred and is then continuing, (B) Lender is not reasonably
<br />satisfied that the Debt Service Coverage, after substantial completion of the Work, will be at least equal to
<br />the Required Debt Service Coverage, (C) more than thirty percent (30 %) of the reasonably estimated fair
<br />market value of the Property is damaged or destroyed, (D) Lender is not reasonably satisfied that the Work
<br />can be completed six (6) months prior to Maturity or (E) Lender is not reasonably satisfied that the Work
<br />can be completed within six (6) months of the damage to or destruction of the Property (each, a
<br />"Substantial Casualty "), Lender shall have the option, in its sole discretion to apply any Insurance Proceeds
<br />it may receive pursuant to this Security Instrument (less any cost to Lender of recovering and paying out
<br />such proceeds incurred pursuant to the terms hereof and not otherwise reimbursed to Lender, including,
<br />without limitation, reasonable attorneys' fees and expenses) to the payment of the Debt, without any
<br />prepayment fee or charge of any kind (in which event, notwithstanding any other term or provision hereof
<br />and, provided no Event of Default has occurred and is continuing, Borrower shall have the right to repay,
<br />without any prepayment fee or charge of any kind, the Release Price with respect to the Property and obtain
<br />a Release of the Property), or to allow such proceeds to be used for the Work pursuant to the terms and
<br />subject to the conditions of Section 3.04(b) hereof and the other applicable sections of this Article III.
<br />(v) In the event that Lender elects or is obligated hereunder to allow Insurance Proceeds to
<br />be used for the Work, any excess proceeds remaining after completion of such Work shall be applied to the
<br />payment of the Debt without any prepayment fee or charge of any kind.
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