ISSUED TO
BORROWER COVERING THE PROPERTY PROVIDED THAT, IN EACH CASE, THE POLICIES
OTHERWISE COMPLY WITH THE PROVISIONS OF THIS
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SECURITY INSTRUMENT AND ALLOCATE TO THE PROPERTY, FROM TIME TO TIME (BUT IN NO
EVENT LESS THAN ONCE A YEAR), THE COVERAGE SPECIFIED BY THIS SECURITY
INSTRUMENT, WITHOUT POSSIBILITY OF REDUCTION OR COINSURANCE BY REASON OF DAMAGE
TO ANY OTHER PROPERTY (REAL OR PERSONAL) NAMED THEREIN.
IF THE INSURANCE
REQUIRED BY THIS SECURITY INSTRUMENT SHALL BE EFFECTED BY ANY SUCH BLANKET OR
UMBRELLA POLICIES, BORROWER SHALL FURNISH TO LENDER (I) ORIGINAL POLICIES OR
CERTIFIED COPIES THEREOF, OR AN ORIGINAL CERTIFICATE OF INSURANCE TOGETHER WITH
REASONABLE ACCESS TO THE ORIGINAL OF SUCH POLICY TO REVIEW SUCH POLICY'S
COVERAGE OF THE PROPERTY, WITH SCHEDULES ATTACHED THERETO SHOWING THE AMOUNT OF
THE INSURANCE PROVIDED UNDER SUCH POLICIES APPLICABLE TO THE PROPERTY AND (II)
AN OFFICER'S CERTIFICATE SETTING FORTH (A) THE NUMBER OF PROPERTIES COVERED BY
SUCH POLICY, (B) THE LOCATION BY CITY (IF AVAILABLE, OTHERWISE, COUNTY) AND
STATE OF THE PROPERTIES, (C) THE AVERAGE SQUARE FOOTAGE OF THE PROPERTIES, (D) A
BRIEF DESCRIPTION OF THE TYPICAL CONSTRUCTION TYPE INCLUDED IN THE BLANKET
POLICY AND (E) SUCH OTHER INFORMATION AS LENDER MAY REASONABLY REQUEST.
SECTION 3.03.
ASSIGNMENT OF POLICIES.
(A) BORROWER HEREBY ASSIGNS TO LENDER
THE PROCEEDS OF ALL INSURANCE (OTHER THAN WORKER'S COMPENSATION AND LIABILITY
INSURANCE) OBTAINED PURSUANT TO THIS SECURITY INSTRUMENT, ALL OF WHICH PROCEEDS
SHALL BE PAYABLE TO LENDER AS COLLATERAL AND FURTHER SECURITY FOR THE PAYMENT OF
THE DEBT AND THE PERFORMANCE OF BORROWER'S OBLIGATIONS HEREUNDER AND UNDER THE
OTHER LOAN DOCUMENTS, AND BORROWER HEREBY AUTHORIZES AND DIRECTS THE ISSUER OF
ANY SUCH INSURANCE TO MAKE PAYMENT OF SUCH PROCEEDS DIRECTLY TO LENDER.
EXCEPT
AS OTHERWISE EXPRESSLY PROVIDED IN SECTION 3.04 OR ELSEWHERE IN THIS ARTICLE
III, LENDER SHALL HAVE THE OPTION, IN ITS DISCRETION, AND WITHOUT REGARD TO THE
ADEQUACY OF ITS SECURITY, TO APPLY ALL OR ANY PART OF THE PROCEEDS IT MAY
RECEIVE PURSUANT TO THIS ARTICLE IN SUCH MANNER AS LENDER MAY ELECT TO ANY ONE
OR MORE OF THE FOLLOWING:
(I) THE PAYMENT OF THE DEBT, WHETHER OR NOT THEN DUE,
IN ACCORDANCE WITH THE PROVISIONS OF THE NOTE, (II) THE REPAIR OR RESTORATION OF
THE PROPERTY, (III) THE CURE OF ANY DEFAULT OR (IV) THE REIMBURSEMENT OF THE
COSTS AND EXPENSES OF LENDER INCURRED PURSUANT TO THE TERMS HEREOF IN CONNECTION
WITH THE RECOVERY OF THE INSURANCE PROCEEDS.
SUBJECT TO SECTION 15.03(A),
NOTHING HEREIN CONTAINED SHALL BE DEEMED TO EXCUSE BORROWER FROM REPAIRING OR
MAINTAINING THE PROPERTY AS PROVIDED IN THIS SECURITY INSTRUMENT OR RESTORING
ALL DAMAGE OR DESTRUCTION TO THE PROPERTY, REGARDLESS OF THE SUFFICIENCY OF THE
INSURANCE PROCEEDS, AND THE APPLICATION OR RELEASE BY LENDER OF ANY INSURANCE
PROCEEDS SHALL NOT CURE OR WAIVE ANY DEFAULT OR NOTICE OF DEFAULT.
(B)
IN THE EVENT OF THE FORECLOSURE OF THIS SECURITY INSTRUMENT OR ANY
OTHER TRANSFER OF TITLE OR ASSIGNMENT OF ALL OR ANY PART OF THE PROPERTY IN
EXTINGUISHMENT, IN