LENDER PROMPT NOTICE OF ANY DAMAGE TO OR
DESTRUCTION OF THE MORTGAGED PROPERTY, AND:
(A)
IN CASE OF LOSS COVERED BY POLICIES OF INSURANCE, LENDER (OR,
AFTER FORECLOSURE, THE PURCHASER AT THE FORECLOSURE SALE) IS HEREBY AUTHORIZED
TO SETTLE AND ADJUST ANY CLAIM UNDER SUCH POLICIES WITHOUT THE CONSENT OF
BORROWER, PROVIDED LENDER SHALL ALLOW BORROWER ONE HUNDRED FIFTY (150) DAYS FROM
THE DATE OF THE LOSS TO SETTLE AND ADJUST WITH THE INSURANCE COMPANY OR
COMPANIES ON THE AMOUNT TO BE PAID UPON THE LOSS WITH LENDER'S APPROVAL;
PROVIDED, THAT BORROWER MAY ADJUST LOSSES AGGREGATING NOT IN EXCESS OF
$250,000.00 IF SUCH ADJUSTMENT IS CARRIED OUT IN A COMPETENT AND TIMELY MANNER,
AND PROVIDED THAT IN ANY CASE LENDER SHALL AND IS HEREBY AUTHORIZED TO COLLECT
AND RECEIPT FOR ANY SUCH INSURANCE PROCEEDS; AND THE EXPENSES INCURRED BY LENDER
IN THE ADJUSTMENT AND COLLECTION OF INSURANCE PROCEEDS SHALL BE SO MUCH
ADDITIONAL INDEBTEDNESS HEREBY SECURED AND SHALL BE REIMBURSED TO LENDER UPON
DEMAND.
(B)
IN THE EVENT OF ANY INSURED DAMAGE TO OR DESTRUCTION OF THE
MORTGAGED PROPERTY OR ANY PART THEREOF (HEREIN CALLED AN "INSURED CASUALTY")
WHICH IS A RESTORATION CASUALTY (HEREINAFTER DEFINED), THEN, THE PROCEEDS OF
INSURANCE SHALL BE APPLIED TO THE COST OF RESTORING, REPAIRING, REPLACING OR
REBUILDING THE MORTGAGED PROPERTY OR PART THEREOF
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SUBJECT TO SUCH RESTORATION CASUALTY, AS PROVIDED FOR BELOW; AND BORROWER HEREBY
COVENANTS AND AGREES TO COMMENCE AND DILIGENTLY PROSECUTE SUCH RESTORING,
REPAIRING, REPLACING OR REBUILDING; PROVIDED, THAT BORROWER SHALL PAY ALL COSTS
(AND IF REQUIRED BY LENDER, BORROWER SHALL DEPOSIT THE TOTAL THEREOF WITH LENDER
IN ADVANCE TO BE HELD IN A MONEY MARKET ACCOUNT AT LENDER AND FROM WHICH LENDER
SHALL APPROVE DRAW REQUESTS) OF SUCH RESTORING, REPAIRING, REPLACING OR
REBUILDING IN EXCESS OF THE NET PROCEEDS OF INSURANCE MADE AVAILABLE PURSUANT TO
THE TERMS HEREOF.
AS USED HEREIN, THE TERM "RESTORATION CASUALTY" SHALL MEAN AN
INSURED CASUALTY WHICH (I) OCCURS PRIOR TO THAT DATE THAT IS SIX (6) MONTHS
PRIOR TO THE MATURITY DATE, (II) OCCURS WHEN NO EVENT OF DEFAULT HAS OCCURRED
AND IS THEN CONTINUING, (III) LENDER IS NOT PROHIBITED FROM PERMITTING
RESTORATION PURSUANT TO A REGULATORY AUTHORITY, AND (IV) IN THE REASONABLE
JUDGMENT OF LENDER, (1)
THE MORTGAGED PROPERTY WILL BE FORECASTED TO MAINTAIN A
DEBT COVERAGE RATIO GREATER THAN OR EQUAL TO 1.15 TO 1.00 DURING THE PERIOD OF
RESTORATION AND (3) THE MORTGAGED PROPERTY CAN BE RESTORED WITHIN TWELVE (12)
MONTHS TO AN ECONOMIC UNIT NOT LESS VALUABLE THAN THE SAME WAS PRIOR TO THE
INSURED CASUALTY AND ADEQUATELY SECURING THE OUTSTANDING BALANCE OF THE LOAN.
(C)
EXCEPT AS PROVIDED ABOVE, THE PROCEEDS OF INSURANCE CONSEQUENT
UPON ANY INSURED CASUALTY (OR CONDEMNATION PROCEEDS AS SET FORTH IN SECTION 6.4
BELOW, OR OTHER FUNDS PAID WITHIN ONE HUNDRED TWENTY (120) DAYS FROM THE
OCCURRENCE OF AN INSURED CASUALTY OR CONDEMNATION) SHALL BE APPLIED TO THE
PAYMENT OF THE INDEBTEDNESS HEREBY SECURED WITHOUT A PREPAYMENT PENALTY OR
PREMIUM.
(D)
IN THE EVENT THAT PROCEEDS