NOT IN RECEIPT
OF WRITTEN EVIDENCE THAT ALL INSURANCE REQUIRED HEREUNDER IS IN FULL FORCE AND
EFFECT, LENDER SHALL HAVE THE RIGHT, WITHOUT NOTICE TO BORROWER, TO TAKE SUCH
ACTION AS LENDER DEEMS NECESSARY TO PROTECT ITS INTEREST IN THE PROPERTY,
INCLUDING, WITHOUT LIMITATION, THE OBTAINING OF SUCH INSURANCE COVERAGE AS
LENDER IN ITS REASONABLE DISCRETION DEEMS APPROPRIATE AFTER THREE (3) BUSINESS
DAYS NOTICE TO BORROWER IF PRIOR TO THE DATE UPON WHICH ANY SUCH COVERAGE WILL
LAPSE OR AT ANY TIME LENDER DEEMS NECESSARY (REGARDLESS OF PRIOR NOTICE TO
BORROWER) TO AVOID THE LAPSE OF ANY SUCH COVERAGE.
ALL PREMIUMS INCURRED BY
LENDER IN CONNECTION WITH SUCH ACTION OR IN OBTAINING SUCH INSURANCE AND KEEPING
IT IN EFFECT SHALL BE PAID BY BORROWER TO LENDER UPON DEMAND AND, UNTIL PAID,
SHALL BE SECURED BY THE MORTGAGE AND SHALL BEAR INTEREST AT THE DEFAULT RATE.
IF BORROWER FAILS IN SO INSURING THE PROPERTY OR IN SO ASSIGNING AND DELIVERING
THE POLICY, LENDER MAY, AT ITS OPTION, OBTAIN SUCH INSURANCE USING SUCH CARRIERS
AND AGENCIES AS LENDER SHALL ELECT FROM YEAR TO YEAR AND PAY THE PREMIUMS
THEREFOR, AND BORROWER WILL REIMBURSE LENDER FOR ANY PREMIUM SO PAID, WITH
INTEREST THEREON AS STATED IN THE NOTE FROM THE TIME OF PAYMENT, ON DEMAND, AND
THE AMOUNT SO OWING TO LENDER SHALL BE SECURED BY THE MORTGAGE.
THE INSURANCE
OBTAINED BY LENDER MAY, BUT NEED NOT, PROTECT BORROWER'S INTEREST AND THE
COVERAGE THAT LENDER PURCHASES MAY NOT PAY ANY CLAIM THAT BORROWER MAKES OR ANY
CLAIM THAT IS MADE AGAINST BORROWER IN CONNECTION WITH THE PROPERTY.
SECTION 6.2
CASUALTY.
IF THE PROPERTY SHALL
BE DAMAGED OR DESTROYED, IN WHOLE OR IN PART, BY FIRE OR OTHER CASUALTY (A
"CASUALTY"), BORROWER (A) SHALL GIVE TO LENDER PROMPT NOTICE OF SUCH DAMAGE
REASONABLY ESTIMATED BY BORROWER TO COST MORE THAN TWO HUNDRED THOUSAND DOLLARS
($200,000.00) TO REPAIR, AND (B) SHALL PROMPTLY COMMENCE AND DILIGENTLY
PROSECUTE THE COMPLETION OF THE RESTORATION OF THE PROPERTY PURSUANT TO
SECTION 6.4 HEREOF AS NEARLY AS POSSIBLE TO THE CONDITION THE PROPERTY WAS IN
IMMEDIATELY PRIOR TO SUCH CASUALTY, WITH
63
SUCH ALTERATIONS AS MAY BE REASONABLY APPROVED BY LENDER AND OTHERWISE IN
ACCORDANCE WITH SECTION 6.4 HEREOF.
BORROWER SHALL PAY, OR CAUSE TO BE PAID,
ALL COSTS OF SUCH RESTORATION WHETHER OR NOT SUCH COSTS ARE COVERED BY
INSURANCE.
LENDER MAY, BUT SHALL NOT BE OBLIGATED TO MAKE PROOF OF LOSS IF NOT
MADE PROMPTLY BY BORROWER.
IN ADDITION, LENDER MAY PARTICIPATE IN ANY
SETTLEMENT DISCUSSIONS WITH ANY INSURANCE COMPANIES (AND SHALL APPROVE THE FINAL
SETTLEMENT, WHICH APPROVAL SHALL NOT BE UNREASONABLY WITHHELD OR DELAYED) WITH
RESPECT TO ANY CASUALTY IN WHICH THE NET PROCEEDS OR THE COSTS OF COMPLETING THE
RESTORATION ARE EQUAL TO OR GREATER THAN TWO HUNDRED THOUSAND AND 00/100 DOLLARS
($200,000.00) AND BORROWER SHALL DELIVER TO LENDER ALL INSTRUMENTS REQUIRED BY
LENDER TO PERMIT SUCH PARTICIPATION.
SECTION 6.3
CONDEMNATION.
BORROWER SHALL
PROMPTLY GIVE LENDER NOTICE OF THE ACTUAL OR THREATENED COMMENCEMENT OF ANY