PAYING ABILITY RATING AND/OR FINANCIAL
STRENGTH RATING, AS APPLICABLE, OF NOT LESS THAN "A" (OR ITS EQUIVALENT), OR
SUCH LOWER CLAIMS PAYING ABILITY RATING AND/OR FINANCIAL STRENGTH RATING, AS
APPLICABLE, AS LENDER SHALL, IN ITS SOLE AND ABSOLUTE DISCRETION, CONSENT TO,
FROM A RATING AGENCY (ONE OF WHICH, AFTER A SECURITIZATION IN WHICH STANDARD &
POOR'S RATES ANY SECURITIES ISSUED IN CONNECTION WITH SUCH SECURITIZATION, SHALL
BE STANDARD & POOR'S), BUT AS TO SUCH RATING FROM A RATING AGENCY FOR ANY
EARTHQUAKE OR FLOOD COVERAGE, SUCH RATING MAY BE LESS THAN "A" (OR ITS
EQUIVALENT) PROVIDED THAT SUCH RATING IS REASONABLY ACCEPTABLE TO LENDER.
ORIGINALS OR CERTIFIED COPIES OF ALL INSURANCE POLICIES SHALL BE DELIVERED TO
AND HELD BY LENDER. ALL SUCH POLICIES (EXCEPT POLICIES FOR WORKER'S
COMPENSATION) SHALL NAME LENDER, ITS SUCCESSORS AND/OR ASSIGNS AS AN ADDITIONAL
NAMED INSURED, SHALL PROVIDE FOR LOSS PAYABLE TO
50
LENDER (OTHER THAN LIABILITY POLICIES), ITS SUCCESSORS AND/OR ASSIGNS AND SHALL
CONTAIN (OR HAVE ATTACHED):
(I) STANDARD "NON-CONTRIBUTORY MORTGAGEE"
ENDORSEMENT OR ITS EQUIVALENT RELATING, INTER ALIA, TO RECOVERY BY LENDER
NOTWITHSTANDING THE NEGLIGENT OR WILLFUL ACTS OR OMISSIONS OF BORROWER; (II) A
WAIVER OF SUBROGATION ENDORSEMENT AS TO LENDER; (III) AN ENDORSEMENT INDICATING
THAT NEITHER LENDER NOR BORROWER SHALL BE OR BE DEEMED TO BE A CO-INSURER WITH
RESPECT TO ANY CASUALTY RISK INSURED BY SUCH POLICIES AND SHALL PROVIDE FOR A
DEDUCTIBLE PER LOSS OF AN AMOUNT NOT MORE THAN THE LESSER OF (X) $100,000 AND
(Y) FIVE PERCENT (5%) OF THE ADJUSTED NET CASH FLOW (OTHER THAN FOR EARTHQUAKE
COVERAGE, WHICH MAY BE UP TO 5% OF THE INSURED VALUE), AND (IV) A PROVISION THAT
SUCH POLICIES SHALL NOT BE CANCELED, TERMINATED, DENIED RENEWAL OR AMENDED TO
MATERIALLY REDUCE THE SCOPE OR LIMITS OF COVERAGE, WITHOUT AT LEAST THIRTY (30)
DAYS' PRIOR WRITTEN NOTICE TO LENDER IN EACH INSTANCE. NOT LESS THAN TEN (10)
DAYS PRIOR TO THE EXPIRATION DATES OF THE INSURANCE POLICIES OBTAINED PURSUANT
TO THIS SECURITY INSTRUMENT, OR AS SOON AS AVAILABLE, BUT IN NO EVENT LATER THAN
SUCH DATE OF EXPIRATION, ORIGINALS OR CERTIFIED COPIES OF RENEWALS OF SUCH
POLICIES (OR CERTIFICATES EVIDENCING SUCH RENEWALS) BEARING NOTATIONS EVIDENCING
THE PAYMENT OF PREMIUMS OR ACCOMPANIED BY OTHER REASONABLE EVIDENCE OF SUCH
PAYMENT (WHICH PREMIUMS SHALL NOT BE PAID BY BORROWER THROUGH OR BY ANY
FINANCING ARRANGEMENT WHICH WOULD ENTITLE AN INSURER TO TERMINATE A POLICY)
SHALL BE DELIVERED BY BORROWER TO LENDER. BORROWER SHALL NOT CARRY SEPARATE
INSURANCE, CONCURRENT IN KIND OR FORM OR CONTRIBUTING IN THE EVENT OF LOSS, WITH
ANY INSURANCE REQUIRED UNDER THIS ARTICLE III.
(b)
If Borrower fails to maintain and deliver to Lender the original
policies or certificates of insurance required by this Security Instrument,
Lender may, at its option, procure such insurance, and Borrower shall pay or, as
the case may be, reimburse Lender for, all premiums thereon promptly, upon
demand by Lender, with interest thereon at the Default Rate from the date paid
by Lender to the date of repayment