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8 <br /> established in this Agreement are hereby made subordinate and subject to the rights and <br /> interests of the City under the City Deed of Trust. <br /> For purposes of this Section, the lien or interest with "lesser priority" is the one with <br /> the higher numerical designation, so that, for example, "fifth priority" is a "lesser priority" <br /> than"fourth priority." <br /> The Parties agree that the Lenders do not have any obligation to each other to advance <br /> funds or to see to the application of their respective loan proceeds and that any application of <br /> such proceeds contrary to the terms of any loan documents shall not defeat the subordinations <br /> granted herein in whole or in part. <br /> The Parties agree that except for such obligations as the Authority may have to other <br /> Parties hereto pursuant to agreements with such Parties (i)the Parties do not have any <br /> obligations to each other to advance funds or to see to the application of their respective loan <br /> proceeds, (ii)any application of such proceeds contrary to the terms of any loan documents <br /> shall not defeat the subordinations granted herein in whole or in part, and (iii)nothing <br /> contained in this Agreement shall impair the right of any Party to pursue any right or remedy <br /> available to it in any of the agreements, covenants, regulatory agreements, deeds of trust or <br /> options referenced herein. <br /> Notwithstanding any other provisions of this Agreement, the priorities established <br /> hereunder shall not apply to nor affect the security position of any security agreement or <br /> pledge of cash accounts or other property to which only one Party hereto has been granted a <br /> security interest. <br /> 2. Insurance or Condemnation Proceeds. Notwithstanding any provision of the Bank <br /> Documents,the HTF Documents,the City Loan Documents, or the County Loan Documents to <br /> the contrary,so long as the Bank Loan is outstanding, in the event of any damage to, destruction <br /> of, or taking or condemnation (including deed in lieu thereof) of the Property or any portion <br /> thereof, the application of any insurance or condemnation proceeds shall be governed by the <br /> tenns of the Bank Deed of Trust. Any funds to be applied to repair or restoration shall be held <br /> and administered by Bank in accordance with the Bank Documents, and the Bank shall be <br /> entitled to reasonable compensation for its services in connection with the administration of such <br /> funds, as set forth in the Bank Deed of Trust, provided that if applicable law does not permit a <br /> Lender to hold such proceeds then the Bank shall have the right to designate an insurance trustee <br /> to administer the proceeds consistent with the Bank Deed of Trust subject to applicable law. For <br /> so long as the Bank Loan is outstanding,the Bank shall have all approval,consent,and oversight <br /> rights in connection with any insurance claims relating to the Property and any decisions <br /> regarding the use of insurance or condemnation proceeds after a casualty loss or condemnation <br /> • notwithstanding any rights of Commerce pursuant to the HTF Documents, any rights of the <br /> City pursuant to the City Loan Documents, or any rights of the County pursuant to the County <br /> Loan Documents. <br /> Silver Lake Cottages <br /> Priority and Subordination Agreement Page 5 <br /> 87 <br />