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200507874
<br />Section 3.05. Compliance with Insurance Re uirements. Borrower promptly shall comply with, and shall
<br />cause the Property to comply with, all Insurance Requirements, even if such compliance requires structural changes
<br />or improvements or would result in interference with the use or enjoyment of the Property or any portion thereof
<br />provided Borrower shall have a right to contest in good faith and with diligence such Insurance Requirements
<br />provided (a) no Default shall exist during such contest and such contest shall not subject the Property or any portion
<br />thereof to any lien or affect the priority of the lien of this Security Instrument, (b) failure to comply with such
<br />Insurance Requirements will not subject Lender, "Trustee or any of their agents, employees, officers or directors to
<br />any civil or criminal liability, (c) such contest will not cause any reduction in insurance coverage, (d) such contest
<br />shall not affect the ownership, use or occupancy of the Property, (e) the Property or any part thereof or any interest
<br />therein shall not be in any danger of being sold, forfeited or lost by reason of such contest by Borrower, (f) Borrower
<br />has given Lender prompt notice of such contest and, upon request by Lender from time to time, notice of the status
<br />of such contest by Borrower and/or information of the continuing satisfaction of the conditions set forth in clauses
<br />(a) through (e) of this Section 3.05, (g) upon a final determination of such contest, Borrower shall promptly comply
<br />with the requirements thereof, and (h) prior to and during such contest, Borrower shall furnish to Lender security
<br />satisfactory to Lender, in its reasonable discretion, against loss or injury by reason of such contest or the non-
<br />compliance with such Insurance Requirement (and if such security is cash, Lender shall deposit the same in an
<br />interest- bearing account and interest accrued thereon, if any, shall be deemed to constitute a part of such security for
<br />purposes of this Security Instrument, but Lender (i) makes no representation or warranty as to the rate or amount of
<br />interest, if any, which may accrue thereon and shall have no liability in connection therewith and (ii) shall not be
<br />deemed to be a trustee or fiduciary with respect to its receipt of any such security and any such security may be
<br />commingled with other monies of Lender). If Borrower shall use the Property or any portion thereof in any manner
<br />which could permit the insurer to cancel any insurance required to be provided hereunder, Borrower immediately
<br />shall obtain a substitute policy which shall satisfy the requirements of this Security Instrument and which shall be
<br />effective on or prior to the date on which any such other insurance policy shall be canceled. Borrower shall not by
<br />any action or omission invalidate any insurance policy required to be carried hereunder unless such policy is
<br />replaced as aforesaid, or materially increase the premiums on any such policy above the normal premium charged
<br />for such policy. Borrower shall cooperate with Lender in obtaining for Lender the benefits of any Insurance
<br />Proceeds lawfully or equitably payable to Lender in connection with the transaction contemplated hereby.
<br />Section 3.06. Event of Default During Restoration. Notwithstanding anything to the contrary contained in
<br />this Security Instrument including, without limitation, the provisions of this Article III, if, at the time of any casualty
<br />affecting the Property or any part thereof, or at any time during any Work, or at any time that Lender is holding or is
<br />entitled to receive any Insurance Proceeds pursuant to this Security Instrument, a Default exists and is continuing
<br />(whether or not it constitutes an Event of Default), Lender shall then have no obligation to make such proceeds
<br />available for Work and Lender shall have the right and option, to be exercised in its sole and absolute discretion and
<br />election, with respect to the Insurance Proceeds, either to retain and apply such proceeds in reimbursement for the
<br />actual costs, fees and expenses incurred by Lender in accordance with the terms hereof in connection with the
<br />adjustment of the loss and any balance toward payment of the Debt in such priority and proportions as Lender, in its
<br />sole discretion, shall deem proper, or towards the Work, upon such terms and conditions as Lender shall determine,
<br />or to cure any Event of Default, or to any one or more of the foregoing as Lender, in its sole and absolute discretion,
<br />may determine. If Lender shall receive and retain such Insurance Proceeds, the lien of this Security Instrument shall
<br />be reduced only by the amount thereof received, after reimbursement to Lender of expenses of collection, and
<br />actually applied by Lender in reduction of the principal sum payable under the Note in accordance with the Note.
<br />Section 3.07. Application of Proceeds to Debt, Reduction. (a) No damage to the Property, or any part
<br />thereof, by fire or other casualty whatsoever, whether such damage be partial or total, shall relieve Borrower from its
<br />liability to pay in full the Debt and to perform its obligations under this Security Instrument and the other Loan
<br />Documents.
<br />(b) If any Insurance Proceeds are applied to reduce the Debt, Lender shall apply the same in
<br />accordance with the provisions of the Note.
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