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200800520 tJ! 2'tf(1)j 3 2 2 clauses satisfactory to Beneficiary, and clauses providing for not less than thirty (30) days' prior written notice to Beneficiary of cancellation or material modification of such policies attached thereto in favor of Beneficiary and successors and assigns of each. All of the above-mentioned original insurance policies or certified copies of such policies and certificates of such insurance satisfactory to Beneficiary, together with receipts for the payment of premiums thereon, shall be delivered to and held by Beneficiary, which delivery shall constitute an assignment to Beneficiary of all return premiums to be held as additional security hereunder. The liability insurance policies required hereunder shall name Beneficiary as additional insured and loss payee. All renewal and replacement policies shall be delivered to Beneficiary at least thirty (30) days before the expiration of the expiring policies. Grantor agrees that any loss paid to Beneficiary under any of such policies shall, subject to the terms of the Fazoli's Lease, be applied, at the option of Beneficiary, toward pre-payment of the Loan or any of the Secured Obligations, or to the rebuilding or repairing of the damaged or destroyed Improvements or other Collateral, as Beneficiary in its sole and unreviewable discretion may elect; provided, however, that any proceeds of insurance made available for the rebuilding or repairing of the damaged or destroyed Improvements or other Collateral shall be subject to Beneficiary's construction lending conditions and to such other conditions as Beneficiary may in its sole and absolute discretion impose; and provided further that no election made by Beneficiary under this Section 1.7 shall relieve Grantor of the duty to repair and restore. Grantor hereby empowers Beneficiary, in its sole and absolute discretion, to settle, compromise and adjust any and all claims or rights under any insurance policy maintained by Grantor relating to the Collateral. In the event of foreclosure of this Deed of Trust, transfer of title to the' Premises by deed in lieu of foreclosure or other transfer of title to the Premises in extinguishment, in whole or in part, of the Secured Obligations all right, title and interest of Grantor in and to any insurance policies then in force shall pass to the purchaser or grantee. Nothing contained in this Deed of Trust shall create any responsibility or obligation on Beneficiary to collect any amounts owing on any insurance policy or resulting from any condemnation, to rebuild or replace any damaged or destroyed Improvements or other Collateral or to perform any other act hereunder. Beneficiary shall not by the fact of approving, disapproving, accepting, preventing, obtaining or failing to obtain any insurance, incur any liability for or with respect to the amount of insurance carried, the form or legal sufficiency of insurance contracts, solvency of insurance companies, or payment or defense of lawsuits, and Grantor hereby expressly assumes full responsibility therefor and all liability, if any, with respect thereto. Notwithstanding the foregoing, should the Premises be located in an area designated by the Director of the Federal Emergency Management Agency as a special flood hazard area, Grantor agrees to obtain and maintain Federal Flood Insurance, if available, within forty.five (45) days after notice is given by Beneficiary that the Premises are located in a special flood hazard area, for the full unpaid balance of the Loan, and any prior liens on the Premises securing the Loan, up to the maximum policy limits set under the National Flood Insurance Program, or as otherwise required by Beneficiary, and to maintain such insurance for the term of the Loan. Notwithstanding the foregoing provisions of this Section 1.7, Grantor shall be in compliance with the insurance requirements of this Section 1.7 so long as the current tenant of the Premises maintains all insurance coverage required under the Fazoli's Lease. WARNING 9 NEWY1\8176568.2