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v'69 <br />ARTICLE VI <br />DANIAGE AND DESTRUCTION; <br />USE OF NET PROCEEDS <br />SECTION 6.1. Obligation of the Purchaser to Repair and Replace the Mortgaged <br />Property Unless applied to the payment in full or in part of the remaining Installment <br />Payments pursuant to Section 6.2, the Purchaser shall cause Net Proceeds to be applied to the <br />prompt repair, restoration or replacement of the Mortgaged Property Any repair, restoration, <br />modification, improvement or replacement paid for in whole or in part out of such Net Proceeds <br />shall be the property of the Purchaser, subject to the Deed of Trust and Permitted Encumbrances, <br />and shall be included as part of the Mortgaged Property under this Agreement. <br />SECTION 6.2. Insufficiency of Net Proceeds; Discharge of the Obligation of the <br />Purchaser to Repair the Mortgaged Property (a) If the Net Proceeds shall be insufficient to <br />pay in full the cost of repair, restoration or replacement of the Mortgaged Property, the Purchaser <br />may elect to complete the work and pay any cost in excess of the amount of the Net Proceeds, <br />and the Purchaser agrees that, if by reason of any such insufficiency of the Net Proceeds, the <br />Purchaser shall make any payments pursuant to the provisions of this subsection, the Purchaser <br />shall not be entitled to any reimbursement therefor from the Seller, nor shall the Purchaser be <br />entitled to any diminution of the Installment Payments payable under Section 4.1. <br />(b) If the Purchaser elects not to apply the Net Proceeds to the repair, restoration or <br />replacement of the Mortgaged Property, the Purchaser may apply the Net Proceeds of such <br />insurance policies to the payment of the Installment Payments in accordance with Section 4.1. In <br />the event the amount of such Net Proceeds exceeds the amount necessary to prepay the <br />remaining Installment Payments, such excess shall be paid to or retained by the Purchaser. <br />Within 90 days following the receipt of Net Proceeds, unless a further extension is <br />approved by the Seller, the Purchaser shall commence the repair, restoration or replacement of <br />the Mortgaged Property, or shall elect, by written notice to the Seller, to apply the Net Proceeds <br />to the payment of the Installment Payments under the provisions of Section 4. 1, in which case <br />such funds shall be set aside in escrow by the County to make such Installment Payments as they <br />become due and payable. For purposes of this subsection, "commence" shall include the <br />retention of an engineer in anticipation of the repair, restoration. modification, improvement or <br />replacement of the Mortgaged Property. <br />SECTION 6.3. Cooperation of the Seller The Seller shall cooperate fully with the <br />Purchaser in filing any proof of loss with respect to any insurance policy covering the events <br />specified in Article V. In no event shall the Seller or the Purchaser voluntarily settle, or consent <br />to the settlement of, any proceeding arising out of any insurance claim with respect to the <br />Mortgaged Property without the written consent of'the other. <br />12 <br />