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200110903 Default has occurred and is continuing, in the event of a casualty to all or any portion of the Premises in connection with which insurance proceeds shall have been paid, then Grantor shall be entitled to collect such amounts from the applicable insurers directly (or from Beneficiary if such proceeds shall have been paid to Beneficiary by such insurer) for application to the costs of repairing, replacing or rebuilding the Premises (or reimbursing Grantor or Beneficiary for its payment of the costs thereof). (d) Repair Uneconomic. Notwithstanding anything to the contrary in this Section 3.08, where such damage, destruction, or loss is substantial and Grantor determines, consistent with a good faith business judgment, that (A) the Premises so damaged, destroyed or lost is no longer desirable for the operation of Grantor's business or (B) it would be uneconomic for Grantor to restore, replace or rebuild the Premises, then Grantor shall not be required to restore, replace or rebuild the Premises, and Beneficiary shall be entitled to apply all Awards relating thereto in accordance with subsection (b) of this Section 3.08. (e) Effect on the Secured Obligations. Notwithstanding any loss, damage or destruction referred to in this Section, Grantor shall continue to pay and perform the Secured Obligations as provided herein. Any reduction in the Secured Obligations resulting from such application shall be deemed to take effect only on the date of receipt by Beneficiary of such insurance proceeds and application against the Secured Obligations, provided that if prior to the receipt by Beneficiary of such insurance proceeds the Trust Property shall have been sold on foreclosure of this Deed of Trust, or shall have been transferred by deed in lieu of foreclosure of this Deed of Trust, Beneficiary shall have the right to receive the same to the extent of any deficiency found to be due upon such sale, with legal interest thereon together with attorneys' fees and disbursements incurred by Beneficiary in connection with the collection thereof. SECTION 3.09. Contest. Notwithstanding anything to the contrary contained herein, Grantor shall have the right to contest in good faith and at its own expense the validity or applicability of any duty or obligation described in Section 3.03 or 3.12(b), the validity of any lien, encumbrance, charge or security referred to in Section 3.06 and any Imposition imposed upon the Premises (a "Contest ") by an appropriate legal proceeding which proceeding must operate to prevent the enforcement of such duty or obligation or the collection of such Impositions or other realization thereon and the sale or forfeiture of the Trust Property or any part thereof to satisfy the same; provided, however, that if at any time performance of such duty or obligation or payment of any Imposition which is the subject of such a Contest shall become necessary to prevent (i) the delivery of a tax deed conveying the Trust Property because of non - performance or non - payment or (ii) the imposition of any civil or criminal penalty or liability on Beneficiary or the holders of the Secured Obligations, Grantor shall pay the same in sufficient time to avoid the delivery of such tax deed or the imposition of any such penalty or liability. SECTION 3.10. Condemnation. (a) Grantor's Obligations; Proceedings. Grantor, promptly upon obtaining knowledge of any pending or threatened institution of any proceedings for the condemnation of the Premises (or any portion thereof), or of any right of eminent domain which, in either event, would materially adversely affect the use and operation NYDOCS03/596673.1 11 HALL COUNTY, NEBRASKA