RELATIVE TO THE FOREGOING WHICH RESULT FROM LENDER'S,
AND ITS SUCCESSORS' OR ASSIGNS', WILLFUL MISCONDUCT OR GROSS NEGLIGENCE.
ANY
AMOUNTS PAYABLE TO LENDER BY REASON OF THE APPLICATION OF THIS SECTION 12.01
SHALL CONSTITUTE A PART OF THE DEBT SECURED BY THIS SECURITY INSTRUMENT AND THE
OTHER LOAN DOCUMENTS AND SHALL BECOME IMMEDIATELY DUE AND PAYABLE AND SHALL BEAR
INTEREST AT THE DEFAULT RATE FROM THE DATE THE LIABILITY, OBLIGATION, CLAIM,
COST OR EXPENSE IS SUSTAINED BY LENDER, AS APPLICABLE, UNTIL PAID.
THE
PROVISIONS OF THIS SECTION 12.01 SHALL SURVIVE THE TERMINATION OF THIS SECURITY
INSTRUMENT WHETHER BY REPAYMENT OF THE DEBT, FORECLOSURE OR DELIVERY OF A DEED
IN LIEU THEREOF, ASSIGNMENT OR OTHERWISE.
IN CASE ANY ACTION, SUIT OR
PROCEEDING IS BROUGHT AGAINST ANY OF THE INDEMNIFIED PARTIES BY REASON OF ANY
OCCURRENCE OF THE TYPE SET FORTH IN (A) THROUGH (M) ABOVE, BORROWER SHALL, AT
BORROWER'S EXPENSE, RESIST AND DEFEND SUCH ACTION, SUIT OR PROCEEDING OR WILL
CAUSE THE SAME TO BE RESISTED AND DEFENDED BY COUNSEL AT BORROWER'S EXPENSE FOR
THE INSURER OF THE LIABILITY OR BY COUNSEL DESIGNATED BY BORROWER (UNLESS
REASONABLY DISAPPROVED BY LENDER PROMPTLY AFTER LENDER HAS BEEN NOTIFIED OF SUCH
COUNSEL); PROVIDED, HOWEVER, THAT NOTHING HEREIN SHALL COMPROMISE THE RIGHT OF
LENDER (OR ANY OTHER INDEMNIFIED PARTY) TO APPOINT ITS OWN COUNSEL AT BORROWER'S
EXPENSE FOR ITS DEFENSE WITH RESPECT TO ANY ACTION WHICH, IN THE REASONABLE
OPINION OF LENDER OR SUCH OTHER INDEMNIFIED PARTY, AS APPLICABLE, PRESENTS A
CONFLICT OR POTENTIAL CONFLICT BETWEEN LENDER OR SUCH OTHER INDEMNIFIED PARTY
THAT WOULD MAKE SUCH SEPARATE REPRESENTATION ADVISABLE.
ANY INDEMNIFIED PARTY
WILL GIVE BORROWER PROMPT NOTICE AFTER SUCH INDEMNIFIED PARTY OBTAINS ACTUAL
KNOWLEDGE OF ANY POTENTIAL CLAIM BY SUCH INDEMNIFIED PARTY FOR INDEMNIFICATION
HEREUNDER.
THE INDEMNIFIED PARTIES SHALL NOT SETTLE OR COMPROMISE ANY ACTION,
PROCEEDING OR CLAIM AS TO WHICH IT IS INDEMNIFIED HEREUNDER WITHOUT NOTICE TO
BORROWER.
NOTWITHSTANDING THE FOREGOING, SO LONG AS NO DEFAULT HAS OCCURRED AND
IS CONTINUING AND BORROWER IS RESISTING AND DEFENDING SUCH ACTION, SUIT OR
PROCEEDING AS PROVIDED ABOVE IN A PRUDENT AND COMMERCIALLY REASONABLE MANNER, IN
ORDER TO OBTAIN THE BENEFIT OF THIS SECTION 12.01 WITH RESPECT TO SUCH ACTION,
SUIT OR PROCEEDING, LENDER AND THE INDEMNIFIED PARTIES AGREE THAT THEY SHALL NOT
SETTLE SUCH ACTION, SUIT OR PROCEEDING WITHOUT OBTAINING BORROWER'S CONSENT
WHICH BORROWER AGREES NOT TO UNREASONABLY WITHHOLD, CONDITION OR DELAY;
PROVIDED, HOWEVER, (X) IF BORROWER IS NOT DILIGENTLY DEFENDING SUCH ACTION, SUIT
OR PROCEEDING IN A PRUDENT AND COMMERCIALLY REASONABLE MANNER AS PROVIDED ABOVE
AND LENDER HAS PROVIDED BORROWER WITH
84
THIRTY (30) DAYS' PRIOR WRITTEN NOTICE, OR SHORTER PERIOD IF MANDATED BY THE
REQUIREMENTS OF THE APPLICABLE LAW, AND BORROWER HAS FAILED TO CORRECT SUCH
FAILURE, OR (Y) FAILURE TO SETTLE COULD, IN LENDER'S REASONABLE JUDGMENT, EXPOSE
LENDER TO CRIMINAL LIABILITY, LENDER MAY SETTLE SUCH ACTION, SUIT OR PROCEEDING
WITHOUT THE CONSENT OF BUT UPON NOTICE TO BORROWER AND BE ENTITLED TO THE
BENEFITS OF THIS SECTION 12.01 WITH RESPECT TO THE