FOR SUCH POLICIES (THE "INSURANCE PREMIUMS") AS THE SAME
BECOME DUE AND PAYABLE AND FURNISH TO LENDER EVIDENCE OF THE RENEWAL OF EACH OF
THE POLICIES TOGETHER WITH (UNLESS SUCH INSURANCE PREMIUMS HAVE BEEN PAID BY
LENDER PURSUANT TO SECTION 3.3 HEREOF) RECEIPTS FOR OR OTHER EVIDENCE OF THE
PAYMENT OF THE INSURANCE PREMIUMS REASONABLY SATISFACTORY TO LENDER. IF BORROWER
DOES NOT FURNISH SUCH EVIDENCE AND RECEIPTS AT LEAST THIRTY (30) DAYS PRIOR TO
THE EXPIRATION OF ANY EXPIRING POLICY, THEN LENDER MAY, BUT SHALL NOT BE
OBLIGATED TO, PROCURE SUCH INSURANCE AND PAY THE INSURANCE PREMIUMS THEREFOR,
AND BORROWER SHALL REIMBURSE LENDER FOR THE COST OF SUCH INSURANCE PREMIUMS
PROMPTLY ON DEMAND, WITH INTEREST ACCRUING AT THE DEFAULT RATE. BORROWER SHALL
DELIVER TO LENDER A CERTIFIED COPY OF EACH POLICY WITHIN THIRTY (30) DAYS AFTER
ITS EFFECTIVE DATE. WITHIN THIRTY (30) DAYS AFTER REQUEST BY LENDER, BORROWER
SHALL OBTAIN SUCH INCREASES IN THE AMOUNTS OF COVERAGE REQUIRED HEREUNDER AS MAY
BE REASONABLY REQUESTED BY LENDER, TAKING INTO CONSIDERATION CHANGES IN THE
VALUE OF MONEY OVER TIME, CHANGES IN LIABILITY LAWS, CHANGES IN PRUDENT CUSTOMS
AND PRACTICES, AND THE LIKE.
7.2
CASUALTY.
7.2.1
NOTICE; RESTORATION. IF THE PROPERTY IS DAMAGED OR DESTROYED, IN
WHOLE OR IN PART, BY FIRE OR OTHER CASUALTY (A "CASUALTY"), BORROWER SHALL GIVE
PROMPT NOTICE THEREOF TO LENDER. FOLLOWING THE OCCURRENCE OF A CASUALTY,
BORROWER, REGARDLESS OF WHETHER INSURANCE PROCEEDS ARE AVAILABLE (UNLESS LENDER
HAS BREACHED ITS OBLIGATION (IF ANY) TO MAKE SUCH INSURANCE PROCEEDS AVAILABLE
PURSUANT TO SECTION 7.4.1), SHALL PROMPTLY PROCEED TO RESTORE, REPAIR, REPLACE
OR REBUILD THE PROPERTY IN ACCORDANCE WITH LEGAL REQUIREMENTS TO BE OF AT LEAST
EQUAL VALUE AND OF SUBSTANTIALLY THE SAME CHARACTER AS PRIOR TO SUCH DAMAGE OR
DESTRUCTION.
7.2.2
SETTLEMENT OF PROCEEDS. IF A CASUALTY COVERED BY ANY OF THE POLICIES
(AN "INSURED CASUALTY") OCCURS WHERE THE LOSS DOES NOT EXCEED $2,000,000,
PROVIDED NO EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING, BORROWER MAY SETTLE
AND ADJUST ANY CLAIM WITHOUT THE PRIOR CONSENT OF LENDER; PROVIDED SUCH
ADJUSTMENT IS CARRIED OUT IN A COMPETENT AND TIMELY MANNER, AND BORROWER IS
HEREBY AUTHORIZED TO COLLECT AND RECEIPT FOR THE INSURANCE PROCEEDS (THE
"PROCEEDS"). IN THE EVENT OF AN INSURED CASUALTY WHERE THE LOSS EXCEEDS
$2,000,000 (A "SIGNIFICANT CASUALTY"), BORROWER MAY SETTLE AND ADJUST ANY CLAIM
WITH THE PRIOR WRITTEN CONSENT OF LENDER (WHICH CONSENT SHALL NOT BE
UNREASONABLY WITHHELD OR DELAYED) UNLESS EITHER (I) AN EVENT OF DEFAULT HAS
OCCURRED AND IS CONTINUING OR (II) THE LOSS EQUALS OR EXCEEDS $5,000,000, IN
WHICH EITHER SUCH CASE LENDER MAY, IN ITS SOLE DISCRETION, SETTLE AND ADJUST ANY
CLAIM WITHOUT THE
57
CONSENT OF BORROWER AND AGREE WITH THE INSURER(S) ON THE AMOUNT TO BE PAID ON
THE LOSS, AND THE PROCEEDS SHALL BE DUE AND PAYABLE SOLELY TO LENDER AND HELD BY
LENDER IN THE CASUALTY/CONDEMNATION SUBACCOUNT AND DISBURSED IN ACCORDANCE
HEREWITH. IF BORROWER OR ANY PARTY OTHER THAN LENDER IS A PAYEE ON ANY CHECK
REPRESENTING PROCEEDS WITH