SHALL BE
ACCOUNTABLE ONLY FOR SUCH FUNDS AS ARE ACTUALLY RECEIVED BY MORTGAGEE.
4.7
POSSESSION AND USE OF COLLATERAL.
EXCEPT AS
OTHERWISE PROVIDED IN THIS SECTION OR THE OTHER LOAN DOCUMENTS (AS DEFINED IN
THE LOAN AGREEMENT), SO LONG AS NO DEFAULT EXISTS UNDER THIS MORTGAGE OR ANY OF
THE LOAN DOCUMENTS, MORTGAGOR MAY POSSESS, USE, MOVE, TRANSFER OR DISPOSE OF ANY
OF THE COLLATERAL IN THE ORDINARY COURSE OF MORTGAGOR'S BUSINESS AND IN
ACCORDANCE WITH THE LOAN AGREEMENT.
ARTICLE 5.
RIGHTS AND DUTIES OF THE PARTIES
5.1
TITLE.
MORTGAGOR REPRESENTS AND WARRANTS THAT,
EXCEPT AS DISCLOSED TO MORTGAGEE IN (A) IN THE PRELIMINARY TITLE REPORTS
PREPARED BY TITLE GUARANTY OF HAWAII, INCORPORATED, FOR THE SUBJECT PROPERTY OR
(B) A WRITING WHICH REFERS TO THIS WARRANTY, MORTGAGOR LAWFULLY HOLDS AND
POSSESSES FEE SIMPLE OR LEASEHOLD TITLE TO THE SUBJECT PROPERTY WITHOUT
LIMITATION ON THE RIGHT TO ENCUMBER, AND THAT THIS MORTGAGE IS A FIRST AND PRIOR
LIEN ON THE SUBJECT PROPERTY.
5.2
TAXES AND ASSESSMENTS.
SUBJECT TO MORTGAGOR'S RIGHTS
TO CONTEST PAYMENT OF TAXES AS MAY BE PROVIDED IN THE LOAN AGREEMENT, MORTGAGOR
SHALL PAY PRIOR TO DELINQUENCY ALL TAXES, ASSESSMENTS, LEVIES AND CHARGES
IMPOSED BY ANY PUBLIC OR QUASI-PUBLIC AUTHORITY OR UTILITY COMPANY WHICH ARE OR
WHICH MAY BECOME A LIEN UPON OR CAUSE A LOSS IN VALUE OF THE SUBJECT PROPERTY OR
ANY INTEREST THEREIN.
MORTGAGOR SHALL ALSO PAY PRIOR TO DELINQUENCY ALL TAXES,
ASSESSMENTS, LEVIES AND CHARGES IMPOSED BY ANY PUBLIC AUTHORITY UPON MORTGAGEE
BY REASON OF ITS INTEREST IN ANY SECURED OBLIGATION OR IN THE SUBJECT PROPERTY,
OR BY REASON OF ANY PAYMENT MADE TO MORTGAGEE PURSUANT TO ANY SECURED
OBLIGATION; PROVIDED, HOWEVER, MORTGAGOR SHALL HAVE NO OBLIGATION TO PAY TAXES
WHICH MAY BE IMPOSED FROM TIME TO TIME UPON MORTGAGEE AND WHICH ARE MEASURED BY
AND IMPOSED UPON MORTGAGEE'S NET INCOME.
5.3
TAX AND INSURANCE IMPOUNDS.
AT ANY TIME FOLLOWING
THE OCCURRENCE OF A DEFAULT, AT MORTGAGEE'S OPTION AND UPON ITS DEMAND,
MORTGAGOR, SHALL, UNTIL ALL SECURED OBLIGATIONS
11
HAVE BEEN PAID IN FULL, PAY TO MORTGAGEE MONTHLY, ANNUALLY OR AS OTHERWISE
DIRECTED BY MORTGAGEE AN AMOUNT ESTIMATED BY MORTGAGEE TO BE EQUAL TO: (A) ALL
TAXES, ASSESSMENTS, LEVIES AND CHARGES IMPOSED BY ANY PUBLIC OR QUASI-PUBLIC
AUTHORITY OR UTILITY COMPANY WHICH ARE OR MAY BECOME A LIEN UPON THE SUBJECT
PROPERTY OR COLLATERAL AND WILL BECOME DUE FOR THE TAX YEAR DURING WHICH SUCH
PAYMENT IS SO DIRECTED; AND (B) PREMIUMS FOR FIRE, HAZARD AND INSURANCE REQUIRED
OR REQUESTED PURSUANT TO THE LOAN DOCUMENTS WHEN SAME ARE NEXT DUE. IF MORTGAGEE
DETERMINES THAT ANY AMOUNTS PAID BY MORTGAGOR ARE INSUFFICIENT FOR THE PAYMENT
IN FULL OF SUCH TAXES, ASSESSMENTS, LEVIES, CHARGES AND/OR INSURANCE PREMIUMS,
MORTGAGEE SHALL NOTIFY MORTGAGOR OF THE INCREASED AMOUNTS REQUIRED TO PAY ALL
AMOUNTS WHEN DUE, WHEREUPON MORTGAGOR SHALL PAY TO MORTGAGEE WITHIN THIRTY (30)
DAYS THEREAFTER THE ADDITIONAL AMOUNT AS STATED IN MORTGAGEE'S NOTICE. ALL SUMS
SO PAID SHALL NOT BEAR INTEREST, EXCEPT TO THE EXTENT AND IN ANY