WITH RESPECT TO ANY PORTION OF THE
58
PROPERTY OR THE INSURANCE POLICIES REQUIRED TO BE MAINTAINED HEREUNDER, AND TO
ENDORSE ANY CHECKS, DRAFTS OR OTHER INSTRUMENTS REPRESENTING ANY INSURANCE
PROCEEDS WHETHER PAYABLE BY REASON OF LOSS THEREUNDER OR OTHERWISE.
SECTION 3.05.
COMPLIANCE WITH INSURANCE REQUIREMENTS.
BORROWER PROMPTLY SHALL
COMPLY WITH, AND SHALL CAUSE THE PROPERTY TO COMPLY WITH, ALL INSURANCE
REQUIREMENTS, EVEN IF SUCH COMPLIANCE REQUIRES STRUCTURAL CHANGES OR
IMPROVEMENTS OR WOULD RESULT IN INTERFERENCE WITH THE USE OR ENJOYMENT OF THE
PROPERTY OR ANY PORTION THEREOF PROVIDED BORROWER SHALL HAVE A RIGHT TO CONTEST
IN GOOD FAITH AND WITH DILIGENCE SUCH INSURANCE REQUIREMENTS PROVIDED (A) NO
EVENT OF DEFAULT SHALL EXIST DURING SUCH CONTEST AND SUCH CONTEST SHALL NOT
SUBJECT THE PROPERTY OR ANY PORTION THEREOF TO ANY LIEN OR AFFECT THE PRIORITY
OF THE LIEN OF THIS SECURITY INSTRUMENT, (B) FAILURE TO COMPLY WITH SUCH
INSURANCE REQUIREMENTS WILL NOT SUBJECT LENDER, TRUSTEE OR ANY OF THEIR AGENTS,
EMPLOYEES, OFFICERS OR DIRECTORS TO ANY CIVIL OR CRIMINAL LIABILITY, (C) SUCH
CONTEST WILL NOT CAUSE ANY REDUCTION IN INSURANCE COVERAGE, (D) SUCH CONTEST
SHALL NOT AFFECT THE OWNERSHIP, USE OR OCCUPANCY OF THE PROPERTY, (E) THE
PROPERTY OR ANY PART THEREOF OR ANY INTEREST THEREIN SHALL NOT BE IN ANY DANGER
OF BEING SOLD, FORFEITED OR LOST BY REASON OF SUCH CONTEST BY BORROWER, (F)
BORROWER HAS GIVEN LENDER PROMPT NOTICE OF SUCH CONTEST AND, UPON REQUEST BY
LENDER FROM TIME TO TIME, NOTICE OF THE STATUS OF SUCH CONTEST BY BORROWER
AND/OR INFORMATION OF THE CONTINUING SATISFACTION OF THE CONDITIONS SET FORTH IN
CLAUSES (A) THROUGH (E) OF THIS SECTION 3.05, (G) UPON A FINAL DETERMINATION OF
SUCH CONTEST, BORROWER SHALL PROMPTLY COMPLY WITH THE REQUIREMENTS THEREOF, AND
(H) PRIOR TO AND DURING SUCH CONTEST, BORROWER SHALL FURNISH TO LENDER SECURITY
SATISFACTORY TO LENDER, IN ITS REASONABLE DISCRETION, AGAINST LOSS OR INJURY BY
REASON OF SUCH CONTEST OR THE NON-COMPLIANCE WITH SUCH INSURANCE REQUIREMENT
(AND IF SUCH SECURITY IS CASH, LENDER SHALL DEPOSIT THE SAME IN AN
INTEREST-BEARING ACCOUNT AND INTEREST ACCRUED THEREON, IF ANY, SHALL BE DEEMED
TO CONSTITUTE A PART OF SUCH SECURITY FOR PURPOSES OF THIS SECURITY INSTRUMENT,
BUT LENDER (I) MAKES NO REPRESENTATION OR WARRANTY AS TO THE RATE OR AMOUNT OF
INTEREST, IF ANY, WHICH MAY ACCRUE THEREON AND SHALL HAVE NO LIABILITY IN
CONNECTION THEREWITH AND (II) SHALL NOT BE DEEMED TO BE A TRUSTEE OR FIDUCIARY
WITH RESPECT TO ITS RECEIPT OF ANY SUCH SECURITY AND ANY SUCH SECURITY MAY BE
COMMINGLED WITH OTHER MONIES OF LENDER).
IF BORROWER SHALL USE THE PROPERTY OR
ANY PORTION THEREOF IN ANY MANNER WHICH COULD PERMIT THE INSURER TO CANCEL ANY
INSURANCE REQUIRED TO BE PROVIDED HEREUNDER, BORROWER IMMEDIATELY SHALL OBTAIN A
SUBSTITUTE POLICY WHICH SHALL SATISFY THE REQUIREMENTS OF THIS SECURITY
INSTRUMENT AND WHICH SHALL BE EFFECTIVE ON OR PRIOR TO THE DATE ON WHICH ANY
SUCH OTHER INSURANCE POLICY SHALL BE CANCELED.
BORROWER SHALL NOT BY ANY ACTION
OR OMISSION INVALIDATE