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18 <br /> (b) Except as provided in subsection (a) above, the County will not directly or <br /> indirectly create, incur, assume or suffer to exist any mortgage, pledge, lien, charge, en- <br /> cumbrance or claim on or with respect to the Mortgaged Property, except Permitted En- <br /> cumbrances. The County will promptly, at its own expense, take appropriate action to <br /> discharge any encumbrance or claim not excepted above which it has created, incurred or <br /> suffered to exist. <br /> (c) The County will reimburse the Lender for any expense incurred by the <br /> Lender to discharge or remove any encumbrance or claim, together with interest at an an- <br /> nual rate of 4.00%. <br /> ARTICLE VI <br /> CONDEMNATION OR LOSS OF TITLE; <br /> USE OF NET PROCEEDS <br /> 6.1. Damage, Destruction or Condemnation. The County will promptly noti- <br /> fy the Lender if(a) the Mortgaged Property (or any portion) is destroyed or damaged by <br /> fire or other casualty, (b) any governmental authority takes, or notifies the County of any <br /> intent to take, title to, or the temporary or permanent use of the Mortgaged Property (or <br /> any portion), or the estate of the County or the Lender in the Mortgaged Property (or any <br /> portion), under the power of eminent domain, (c) a material defect in the construction of <br /> the Pledged Facilities becomes apparent, or (d) title to or the use of all or any portion of <br /> the Mortgaged Property is lost by reason of a defect in title. <br /> Each notice must describe generally the nature and extent of such damage, de- <br /> struction or taking. The County will provide any additional information concerning such <br /> matter as the Lender may reasonably request. <br /> The County will file its claims under insurance coverages and claims for awards or <br /> payments in the nature of condemnation awards resulting from any such damage, destruc- <br /> tion or taking. The County will prosecute all such claims for such awards or payments in <br /> good faith and with due diligence. Any Net Proceeds received by the County will be used <br /> as provided in Section 6.2. <br /> 6.2. Security Interest in Net Proceeds; Deposit and Disbursement. <br /> (a) If the Net Proceeds arising from any single event, or any single series of relat- <br /> ed events, is not more than $100,000, then the County has no obligation to account to the <br /> Lender or any other person or entity with respect to the use of those Net Proceeds. The <br /> County, however, acknowledges that its use of such funds may be constrained by the re- <br /> quirements of the Code and the County's obligations under Section 7.1(i). <br /> 11 <br />