KIND) IN SUCH PRIORITY AND
PROPORTIONS AS LENDER, IN ITS SOLE DISCRETION, SHALL DEEM PROPER, OR TOWARDS THE
WORK, UPON SUCH TERMS AND CONDITIONS AS LENDER SHALL DETERMINE, OR TO CURE SUCH
DEFAULT, OR TO ANY ONE OR MORE OF THE FOREGOING AS LENDER, IN ITS SOLE AND
ABSOLUTE DISCRETION, MAY DETERMINE. IF LENDER SHALL RECEIVE AND RETAIN SUCH
INSURANCE PROCEEDS, THE LIEN OF THIS SECURITY INSTRUMENT SHALL BE REDUCED ONLY
BY THE AMOUNT THEREOF RECEIVED, AFTER REIMBURSEMENT TO LENDER OF EXPENSES OF
COLLECTION, AND ACTUALLY APPLIED BY LENDER IN REDUCTION OF THE PRINCIPAL SUM
PAYABLE UNDER THE NOTE IN ACCORDANCE WITH THE NOTE.
SECTION 3.07. APPLICATION OF PROCEEDS TO DEBT REDUCTION. (A) NO DAMAGE TO THE
PROPERTY, OR ANY PART THEREOF, BY FIRE OR OTHER CASUALTY WHATSOEVER, WHETHER
SUCH DAMAGE BE PARTIAL OR TOTAL, SHALL RELIEVE BORROWER FROM ITS LIABILITY TO
PAY IN FULL THE DEBT AND TO PERFORM ITS OBLIGATIONS UNDER THIS SECURITY
INSTRUMENT AND THE OTHER LOAN DOCUMENTS.
(b)
If any Insurance Proceeds are applied to reduce the Debt, Lender
shall apply the same in accordance with the provisions of the Note.
SECTION 3.08. INVESTMENT OF LOSS PROCEEDS. NOTWITHSTANDING ANYTHING CONTAINED IN
THIS SECURITY INSTRUMENT, INCLUDING, WITHOUT LIMITATION, THIS ARTICLE III,
SECTION 5.03 OR ARTICLE VI, IN THE EVENT THAT LOSS PROCEEDS ARE TO BE DEPOSITED
INTO AN INTEREST-BEARING ACCOUNT PURSUANT TO THE TERMS HEREOF, LENDER SHALL, BUT
ONLY AFTER RECEIVING A WRITTEN REQUEST THEREFOR FROM BORROWER, WHICH REQUEST
MUST BE GIVEN AFTER THE CASUALTY OR TAKING WITH RESPECT TO WHICH THE LOSS
PROCEEDS RELATE, INVEST, AND REINVEST LOSS PROCEEDS FROM TIME TO TIME IN
PERMITTED INVESTMENTS AS INSTRUCTED BY BORROWER (WHICH INSTRUCTION MAY BE MADE
NO MORE THAN ONE TIME PER MONTH), PROVIDED THAT (A) IF BORROWER FAILS TO SO
INSTRUCT LENDER, LENDER MAY (BUT SHALL NOT BE OBLIGED TO) INVEST OR DIRECT THE
BANK TO INVEST AND REINVEST SUCH BALANCE IN PERMITTED INVESTMENTS AS LENDER
SHALL DETERMINE IN ITS SOLE DISCRETION AND BORROWER SHALL NOT BE ENTITLED TO ANY
EARNINGS THEREON IN EXCESS OF THAT WHICH WOULD BE EARNED IF SUCH SUMS WERE
DEPOSITED INTO AN INTEREST-BEARING ACCOUNT, (B) THE MATURITIES OF THE PERMITTED
INVESTMENTS ON LOSS PROCEEDS SHALL, TO THE EXTENT SUCH DATES ARE ASCERTAINABLE,
BE SELECTED AND COORDINATED TO BECOME DUE NOT LATER THAN THE DAY BEFORE ANY
DISBURSEMENTS THEREOF MUST BE MADE, (C) ALL SUCH PERMITTED INVESTMENTS SHALL BE
HELD IN THE NAME AND BE UNDER THE SOLE DOMINION AND CONTROL OF LENDER, AS
SECURED PARTY, AND (D) NO PERMITTED INVESTMENT SHALL BE MADE UNLESS LENDER SHALL
RETAIN A PERFECTED FIRST PRIORITY LIEN IN SUCH PERMITTED INVESTMENT SECURING THE
DEBT AND ALL FILINGS AND OTHER ACTIONS NECESSARY TO ENSURE THE VALIDITY,
PERFECTION, AND PRIORITY OF SUCH LIEN HAVE BEEN TAKEN. ALL LOSS PROCEEDS THAT
ARE INVESTED IN A PERMITTED INVESTMENT ARE DEEMED TO BE HELD IN THE CENTRAL
ACCOUNT FOR ALL PURPOSES OF THIS SECURITY INSTRUMENT AND THE OTHER LOAN
DOCUMENTS. LENDER SHALL NOT HAVE ANY LIABILITY FOR ANY LOSS IN INVESTMENTS