REQUIRED BY
40
LENDER, BORROWER SHALL DEPOSIT WITH LENDER CASH, OR OTHER SECURITY AS MAY BE
APPROVED BY LENDER, IN AN AMOUNT EQUAL TO 100% OF THE AMOUNT OF ALL DAMAGES,
COSTS, INTEREST AND PENALTIES THAT MAY BE ASSESSED AGAINST BORROWER AS A RESULT
OF SUCH NON-COMPLIANCE, AS REASONABLY DETERMINED BY LENDER, LESS ANY AMOUNT THAT
BORROWER HAS PAID TO ANY GOVERNMENTAL AUTHORITY IN CONNECTION WITH SUCH CONTEST
AS SECURITY FOR THE PAYMENT OF SUCH DAMAGES, COSTS, INTEREST AND PENALTIES.
4.1.2
TAXES AND OTHER CHARGES.
BORROWER SHALL PAY ALL TAXES AND OTHER
CHARGES NOW OR HEREAFTER LEVIED OR ASSESSED OR IMPOSED AGAINST THE PROPERTY OR
ANY PART THEREOF AS THE SAME BECOME DUE AND PAYABLE; PROVIDED, HOWEVER,
BORROWER'S OBLIGATION TO DIRECTLY PAY TAXES SHALL BE SUSPENDED FOR SO LONG AS
BORROWER COMPLIES WITH THE TERMS AND PROVISIONS OF SECTION 6.2 HEREOF. BORROWER
SHALL FURNISH TO LENDER RECEIPTS FOR THE PAYMENT OF THE TAXES AND THE OTHER
CHARGES PRIOR TO THE DATE THE SAME SHALL BECOME DELINQUENT; PROVIDED, HOWEVER,
THAT BORROWER IS NOT REQUIRED TO FURNISH SUCH RECEIPTS FOR PAYMENT OF TAXES IN
THE EVENT THAT SUCH TAXES HAVE BEEN PAID BY LENDER PURSUANT TO SECTION 6.2
HEREOF. SUBJECT TO BORROWER'S RIGHT TO CONTEST SET FORTH IN SECTION 3.6(B) OF
THE MORTGAGE,
BORROWER SHALL NOT PERMIT OR SUFFER AND SHALL PROMPTLY DISCHARGE
ANY LIEN OR CHARGE AGAINST THE PROPERTY OTHER THAN PERMITTED ENCUMBRANCES. AFTER
PRIOR NOTICE TO LENDER, BORROWER, AT ITS OWN EXPENSE, MAY CONTEST BY APPROPRIATE
LEGAL PROCEEDING, CONDUCTED IN GOOD FAITH AND WITH DUE DILIGENCE, THE AMOUNT OR
VALIDITY OF ANY TAXES OR OTHER CHARGES, PROVIDED THAT (I) NO EVENT OF DEFAULT
HAS OCCURRED AND REMAINS UNCURED; (II) SUCH PROCEEDING SHALL BE PERMITTED UNDER
AND BE CONDUCTED IN ACCORDANCE WITH ALL APPLICABLE STATUTES, LAWS AND
ORDINANCES; (III) NEITHER THE PROPERTY NOR ANY PART THEREOF OR INTEREST THEREIN
WILL BE IN DANGER OF BEING SOLD, FORFEITED, TERMINATED, CANCELED OR LOST; (IV)
BORROWER SHALL PROMPTLY UPON FINAL DETERMINATION THEREOF PAY THE AMOUNT OF ANY
SUCH TAXES OR OTHER CHARGES, TOGETHER WITH ALL COSTS, INTEREST AND PENALTIES
WHICH MAY BE PAYABLE IN CONNECTION THEREWITH; (V) UNLESS TAXES OR OTHER CHARGES
HAVE BEEN PREVIOUSLY PAID, SUCH PROCEEDING SHALL SUSPEND THE COLLECTION OF TAXES
OR OTHER CHARGES FROM THE PROPERTY; AND (VI) TO THE EXTENT THAT BORROWER HAS NOT
PAID TO OR DEPOSITED WITH THE APPLICABLE TAXING AUTHORITY THE FULL AMOUNT OF THE
CONTESTED TAXES OR OTHER CHARGES OR IF BORROWER IS PAYING TAXES TO LENDER
PURSUANT TO SECTION 6.2 HEREOF AND HAS REQUESTED LENDER TO NOT PAY THE CONTESTED
AMOUNT OF THE TAXES DURING THE CONTINUANCE OF THE LEGAL PROCEEDING (IN WHICH
EVENT LENDER SHALL NOT PAY SUCH AMOUNT OF THE TAXES DURING THE CONTINUANCE OF
SUCH PROCEEDING), BORROWER SHALL DEPOSIT WITH LENDER CASH, OR OTHER SECURITY AS
MAY BE APPROVED BY LENDER, IN AN AMOUNT EQUAL TO ONE HUNDRED TWENTY-FIVE PERCENT
(125%) OF THE UNPAID CONTESTED AMOUNT, TO INSURE THE PAYMENT OF ANY SUCH TAXES
OR OTHER CHARGES, TOGETHER WITH ALL