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88-100020 I" SECTION 1.12 Destruction; Condemnation. 1.12.1 Destruction; Insurance Proceeds. In case of any damage to, or loss or d~struction of, the Improvements and Personal Property or any part thereof (each, a IIDestructionll), Mortgagor shall promptly send to Beneficiary a notice setting forth the nature and extent of such Destruction. The proceeds of any insurance payable in re~pect of such Destruction are hereby assigned and shall be paid to Beneficiary. Beneficiary is hereby authorized and empowered by Mortgagor to settle, adjust or compro- mise any claims for such damage or destruction. All such pro- ceeds, less the amount of any expenses incurred in litigating, arbitrating, compromising or settling any claim arising out of such Destruction (IINet Proceeds II ), shall be applied as set forth in Sections 1.12.3 and 1.12,4 hereof. 1.12.2 Cond~:r:nation; Assignment of Award. In the event of any taking of the Mortgaged Property or any part thereof, in or by condemnation or other eminent domain proceedings pursuant to any law, general or special, or by reason of the temporary requisi tion of the use or occupancy of the r'10rtgaged Property or any part hereof, by any governmental authority, civil or military, or any sale pursuant to the threat of condemnation or other eminent domain proceeding2 (each, a IITaking"), Mortgagor shall immediately notify Beneficiary upon receiving notice of such Taking or commencement of proceedings therefor. Benefici ary is hereby authorized and empowered by Mortgagor to settle, adjust or compromise any claims for the proceeds in respect of any Taking. All proceeds or any award or payment in respect of any Taking are hereby assigned and shall be paid to Beneficiary and Mortgagor shall take all steps necessary to notify the condemning authority of such assignment. Such aHard or payment, less the amount of any expenses incurred in litigating, arbitrating, compromising or settling any claim arising out of such Taking ("Net Award"), shall be applied as if such award or payment were insurance proceeds in accordance with Sections 1.12.3 and 1.12.4 hereof. 1.12.3 Restoration. In the event of a Taking or Destruction, Mortgagor shall be required to restore or rebuild (IIRestorationll) any Personal Property or Improvement that is damaged, taken or destroyed under the terms and provisions herein- after provided. The Net Award and Net Proceeds shall be paid to the Beneficiary; provided however that so long as no Event of Default shall have occurred and be continuing, Net Proceeds and Net Awards in amounts less than $10,000 per occurrence shall be delivered to the Mortgagor to pay for the Restoration. Wi th respect to occurrences giving rise to Net Proceeds and Net Awards in excess of $10,000, all such Net Pro- ceeds and Net Awards may be applied by the Beneficiary, at its discretion, to the prepayment of the Indebtedness. In the event the Net Proceeds or Net A"ard are used for Restoration, Benefi- ciary shall not release any part of the Net Award or the Net Proceeds except in accordance with the provisions of Section -14- L L L .-J ~ j j / ~..