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Mortgage, Assignment of Rents, Security Agreement and Fixture Filing Page 18 into any agreements with the condemning authority permitting or consenting to the taking of the Premises unless prior written consent of Governmental Lender is obtained. Any expenses incurred by Governmental Lender in intervening in such action or collecting Condemnation proceeds (including the cost of any independent appraisal) shall be reimbursed to Governmental Lender first out of the Condemnation proceeds prior to other payments or disbursements. Borrower shall deliver all Condemnation proceeds to Governmental Lender within five (5) days of receipt thereof and shall at Governmental Lender’s request direct the condemning authority to deliver the Condemnation proceeds to Governmental Lender. The Condemnation proceeds or any part thereof shall be applied upon or in reduction of the Indebtedness then most remotely to be paid, whether due or not, or to the restoration or repair of the Premises, the choice of application to be solely at the discretion of Governmental Lender. In the event Governmental Lender does not make Condemnation proceeds available for restoration and applies the Condemnation proceeds to payment of debt, no prepayment premium shall be due. Notwithstanding anything to the contrary in this Section 4.1, Governmental Lender shall allow Borrower to use the Condemnation proceeds to repair or restore the Premises, provided that (i) the Condemnation action involves the taking of a portion of the Premises that is worth less than ten percent (10%) of the fair market value of the Premises at the time the Condemnation action is commenced; and (ii) Borrower satisfies all of the conditions of Section 4.3. 4.2 Disbursement of Insurance and Condemnation Proceeds. Should any insurance or condemnation proceeds be applied to the restoration or repair of the Premises in accordance with this Article 5, and any other applicable Financing Document, the restoration or repair shall be done under the supervision of an architect reasonably acceptable to the Governmental Lender and pursuant to site and building plans and specifications approved by the Governmental Lender. The proceeds from insurance and Condemnation, after payment of costs and expenses of collection (hereinafter referred to as the “Net Proceeds”), shall be held by the Governmental Lender for such purposes and will from time to time be disbursed by the Governmental Lender on a periodic basis as such restoration or repairs are completed through a title company acceptable to the Governmental Lender to defray the costs of such restoration or repair under such safeguards and controls as the Governmental Lender may require and in accordance with standard construction loan procedures. All costs and expenses associated with the disbursement of such proceeds shall be paid by Borrower. Prior to making Net Proceeds available for the payment of costs of repair or restoration of the improvements upon the Premises, the Governmental Lender shall be entitled to receive the following: (a) Evidence that no Event of Default exists under any of the terms, covenants and conditions of this Security Instrument, the Project Note, or other collateral security documents. (b) Evidence that all leasing requirements for the Premises as established by the Governmental Lender have been met. (c) Satisfactory proof that such improvements have been fully restored, or that the expenditure of Net Proceeds will be sufficient to repair, restore or rebuild the Premises, free and clear of all liens, except the lien of this Security Instrument. In