THE FOREGOING.
SUBJECT TO APPLICABLE LAW AND SECTION 5.6(B), AND WITHOUT REGARD TO ANY
REQUIREMENT CONTAINED IN SUBPARAGRAPH (D) OF THAT CERTAIN SECTION ENTITLED
MAINTENANCE AND PRESERVATION OF THE SUBJECT PROPERTY,
12
MORTGAGEE MAY AT ITS DISCRETION APPLY ALL OR ANY OF THE PROCEEDS IT RECEIVES TO
ITS EXPENSES IN SETTLING, PROSECUTING OR DEFENDING ANY CLAIM AND MAY APPLY THE
BALANCE TO THE SECURED OBLIGATIONS IN ANY ORDER ACCEPTABLE TO MORTGAGEE.
MORTGAGEE MAY COMMENCE, APPEAR IN, DEFEND OR PROSECUTE ANY ASSIGNED CLAIM OR
ACTION AND MAY ADJUST, COMPROMISE, SETTLE AND COLLECT ALL CLAIMS AND AWARDS
ASSIGNED TO MORTGAGEE; PROVIDED, HOWEVER, IN NO EVENT SHALL MORTGAGEE BE
RESPONSIBLE FOR ANY FAILURE TO COLLECT ANY CLAIM OR AWARD, REGARDLESS OF THE
CAUSE OF THE FAILURE, INCLUDING, WITHOUT LIMITATION, ANY MALFEASANCE OR
NONFEASANCE BY MORTGAGEE OR ITS EMPLOYEES OR AGENTS.
(B)
NOTWITHSTANDING SECTION 5.6 (A), MORTGAGEE SHALL
PERMIT INSURANCE OR CONDEMNATION PROCEEDS HELD BY MORTGAGEE TO BE USED FOR
REPAIR OR RESTORATION BUT MAY CONDITION SUCH APPLICATION UPON REASONABLE
CONDITIONS, INCLUDING, WITHOUT LIMITATION:
(I) THE DEPOSIT WITH MORTGAGEE OF
SUCH ADDITIONAL FUNDS WHICH MORTGAGEE DETERMINES ARE NEEDED TO PAY ALL COSTS OF
THE REPAIR OR RESTORATION, (INCLUDING, WITHOUT LIMITATION, TAXES, FINANCING
CHARGES, INSURANCE AND RENT DURING THE REPAIR PERIOD); (II) THE ESTABLISHMENT OF
AN ARRANGEMENT FOR LIEN RELEASES AND DISBURSEMENT OF FUNDS ACCEPTABLE TO
MORTGAGEE (THE ARRANGEMENT CONTAINED IN THE LOAN AGREEMENT FOR OBTAINING LIEN
RELEASES AND DISBURSING LOAN FUNDS SHALL BE DEEMED REASONABLE WITH RESPECT TO
DISBURSEMENT OF INSURANCE OR CONDEMNATION PROCEEDS); (III) THE DELIVERY TO
MORTGAGEE OF PLANS AND SPECIFICATIONS FOR THE WORK, A CONTRACT FOR THE WORK
SIGNED BY A CONTRACTOR REASONABLY ACCEPTABLE TO MORTGAGEE, A COST BREAKDOWN FOR
THE WORK AND A PAYMENT AND PERFORMANCE BOND FOR THE WORK, ALL OF WHICH SHALL BE
REASONABLY ACCEPTABLE TO MORTGAGEE; AND (IV) THE DELIVERY TO MORTGAGEE OF
EVIDENCE REASONABLY ACCEPTABLE TO MORTGAGEE (AA) THAT AFTER COMPLETION OF THE
WORK THE INCOME FROM THE SUBJECT PROPERTY WILL BE SUFFICIENT TO PAY ALL EXPENSES
AND DEBT SERVICE FOR THE SUBJECT PROPERTY; (BB) OF THE CONTINUATION OF LEASES
REASONABLY ACCEPTABLE TO MORTGAGEE; (CC) THAT UPON COMPLETION OF THE WORK, THE
SIZE, CAPACITY AND TOTAL VALUE OF THE SUBJECT PROPERTY WILL BE AT LEAST AS GREAT
AS IT WAS BEFORE THE DAMAGE OR CONDEMNATION OCCURRED; (DD) THAT THERE HAS BEEN
NO MATERIAL ADVERSE CHANGE IN THE FINANCIAL CONDITION OR CREDIT OF MORTGAGOR
SINCE THE DATE OF THIS MORTGAGE; AND (EE) OF THE SATISFACTION OF ANY ADDITIONAL
CONDITIONS THAT MORTGAGEE MAY REASONABLY ESTABLISH TO PROTECT ITS SECURITY.
MORTGAGOR HEREBY ACKNOWLEDGES THAT THE CONDITIONS DESCRIBED ABOVE ARE
REASONABLE, AND, IF SUCH CONDITIONS HAVE NOT BEEN SATISFIED WITHIN THIRTY (30)
DAYS OF RECEIPT BY MORTGAGEE OF SUCH INSURANCE OR CONDEMNATION PROCEEDS, THEN
MORTGAGEE MAY APPLY SUCH INSURANCE OR CONDEMNATION PROCEEDS TO PAY THE SECURED
OBLIGATIONS IN SUCH ORDER AND AMOUNTS AS MORTGAGEE IN ITS SOLE DISCRETION MAY
CHOOSE.
5.7
MAINTENANCE AND PRESERVATION OF THE SUBJECT
PROPERTY.
SUBJECT TO THE PROVISIONS OF THE LOAN AGREEMENT, MORTGAGOR COVENANTS:
(A)