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200313159 reimbursed to Beneficiary first out of the Condemnation proceeds prior to other payments or disbursements. Trustor shall deliver all Condemnation proceeds to Beneficiary within five (5) days of receipt thereof and shall at Beneficiary's request direct the condemning authority to deliver the Condemnation proceeds to Beneficiary. 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 Beneficiary. In the event Beneficiary does not make Condemnation proceeds available for restoration and applies the Condemnation proceeds to payment of debt, no prepayment fee shall be due on the Condemnation proceeds so applied and the monthly installment payments of principal and interest set forth in the Note shall be adjusted to an amount sufficient to reamortize the then unpaid principal balance of the Note together with interest in equal monthly installment payments over the then remaining portion of the original amortization period. SECTION 5.3 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, the restoration or repair shall be done under the supervision of an architect acceptable to Beneficiary (or, at Beneficiary's discretion, an engineer acceptable to Beneficiary) and pursuant to site and building plans and specifications approved by Beneficiary. The proceeds from insurance or Condemnation, after payment of costs and expenses of collection ( "Net Proceeds "), shall be held by Beneficiary for such purposes and will from time to time be disbursed by Beneficiary to defray the costs of such restoration or repair under such safeguards and controls as Beneficiary may require and in accordance with standard construction loan procedures. Net Proceeds may at the option of Beneficiary be disbursed through a title insurance company selected by Beneficiary and at the sole cost of Trustor. Prior to making Net Proceeds available for the payment of costs of repair or restoration of the improvements upon the Premises, Beneficiary 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 Deed of Trust, the Note, or other Loan Documents. (b) Satisfactory proof that all improvements have been fully restored, or that the expenditure of Net Proceeds will be sufficient to repair, restore or rebuild the improvements located on the Premises, free and clear of all liens, except the lien of this Deed of Trust. In the event Net Proceeds shall be insufficient to repair, restore or rebuild the improvements, Trustor shall deposit with Beneficiary funds equaling such deficiency, which, together with the Net Proceeds, shall be sufficient to pay for restoration, repair and rebuilding the Premises. (c) A statement of Trustor's architect, certifying the extent of the repair and restoration completed to the date thereof, and that such repairs, restoration and rebuilding have been performed to date in conformity with the plans and specifications that have been approved by Beneficiary, together with appropriate evidence of payment for labor or materials furnished to the Premises, and total or partial lien waivers substantiating such payments. 15311/53;09/30/03 - 15 -