Common use of Fidelity Bond Coverage Clause in Contracts

Fidelity Bond Coverage. Borrower covenants and agrees that, as long as any Advance is outstanding, Borrower shall maintain, at its own expense, a blanket fidelity bond and an errors and omissions insurance policy, in form and substance satisfactory to Lender, with loss payable to Lender under the blanket fidelity bond and additional insured with respect to the negligent acts of Borrower under the errors and omissions insurance policy, and with broad coverage with responsible companies on Borrower and all officers and employees acting in any capacity with regard to a Pledged Mortgage Loan who handle funds, money, documents and papers relating to a Pledged Mortgage Loan. Any such fidelity bond and errors and omissions insurance shall protect and insure Borrower and Lender, as loss payee under the blanket fidelity bond and additional insured with respect to the negligent acts of Borrower under the errors and omissions policy, against losses, including forgery, theft, embezzlement, fraud, errors and omissions and negligent acts of such Persons. No provision of this Section requiring such fidelity bond and errors and omissions insurance shall diminish or relieve Borrower from its duties and obligations as set forth in this Agreement. The minimum coverage under any such bond and insurance policy shall be in such amounts as required by Lender in its sole discretion. Upon request of Lender, Borrower shall cause to be delivered to Lender a certified true copy of such fidelity bond and insurance policy and a statement from the surety and the insurer that such fidelity bond or insurance policy shall in no event be terminated without thirty (30) calendar days’ prior written notice to Lender. Borrower shall give Lender written evidence of renewal of such insurance policy thirty (30) calendar days in advance of the expiration date of such policy. Borrower also covenants that (i) it will not, without the prior written consent of Lender, materially modify any insurance coverage required by this Section 5.03 and (ii) it will, upon receipt of notice (whether from the related insurer or otherwise) promptly, but in any event within one (1) Business Day of its receipt of notice, provide Lender with notice of any material modification to any insurance coverage required by this Section 5.03.