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 OR ANY OF ITS 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 ANY
INSURANCE POLICY REQUIRED TO BE CARRIED HEREUNDER UNLESS SUCH POLICY IS REPLACED
AS AFORESAID, OR MATERIALLY INCREASE THE PREMIUMS ON ANY SUCH POLICY ABOVE THE
NORMAL PREMIUM CHARGED FOR SUCH POLICY.
BORROWER SHALL COOPERATE WITH LENDER IN
OBTAINING FOR LENDER THE BENEFITS OF ANY INSURANCE PROCEEDS LAWFULLY OR
EQUITABLY PAYABLE TO LENDER IN CONNECTION WITH THE TRANSACTION CONTEMPLATED
HEREBY.
SECTION 3.06.
EVENT OF DEFAULT DURING RESTORATION.
NOTWITHSTANDING ANYTHING
TO THE CONTRARY CONTAINED IN THIS SECURITY INSTRUMENT INCLUDING, WITHOUT
LIMITATION, THE PROVISIONS OF THIS ARTICLE III, IF, AT THE TIME OF ANY CASUALTY
AFFECTING THE