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<br />of the Premises as required hereunder (a "Material Proceeding "), will notify Beneficiary of the
<br />threat or pendency thereof. If an Event of Default shall have occurred and be continuing,
<br />Beneficiary may participate in any such Material Proceeding, and Grantor from time to time will
<br />execute and deliver to Beneficiary all instruments requested by Beneficiary or as may be required
<br />to permit such participation. Grantor shall, at its expense, diligently prosecute any such Material
<br />Proceeding, and, if an Event of Default shall have occurred and be continuing, (i) shall deliver to
<br />Beneficiary copies of all papers served in connection therewith and shall consult and cooperate
<br />with Beneficiary, its attorneys and agents, in the carrying on and defense of any such Material
<br />Proceeding and (ii) shall not settle any such Material Proceeding without Beneficiary's consent.
<br />(b) BeneficiM's Rights; Application of Awards. Beneficiary shall have the
<br />right to apply any Awards in respect of any Material Proceeding, first, to reimburse Beneficiary
<br />and the holders of the Secured Obligations for all reasonable costs and expenses, including
<br />reasonable appraiser and attorneys' fees and disbursements, incurred in connection with the
<br />collection of such proceeds, and, second, subject to subsections (c) and (d) below, the remainder
<br />of such Awards shall be applied, at Beneficiary's option, in payment (without premium or
<br />penalty) of all or any part of the Secured Obligations, in the order and manner determined by
<br />Beneficiary (provided that to the extent that any portion of the Secured Obligations shall remain
<br />outstanding after such application, such unpaid portion of the Secured Obligations shall continue
<br />in full force and effect and Grantor shall not be excused from the payment thereof), or to the cure
<br />of any then current default hereunder, or to the restoration, replacement or rebuilding, in whole or
<br />in part, of the portion of the Premises so taken or condemned provided that any Awards held by
<br />Beneficiary to be applied to the restoration, replacement or rebuilding of the Premises shall be so
<br />held without payment or allowance of interest thereon and shall be paid out from time to time
<br />upon compliance by Grantor with such provisions and requirements as may reasonably be
<br />imposed by Beneficiary. Subject to subsection (c) below, in the event that Grantor shall have
<br />received all or any portion of such Awards, Grantor, upon demand from Beneficiary, shall pay to
<br />Beneficiary an amount equal to the amount so received by Grantor, to be applied as Beneficiary
<br />shall have the right pursuant to this subsection. Notwithstanding anything herein or at law or in
<br />equity to the contrary, none of the Awards paid to Beneficiary under this Section shall be deemed
<br />trust funds and Beneficiary shall be entitled to dispose of the same as provided in this Section.
<br />(c) Grantor's Rights if No Event of Default; Application of Awards.
<br />Notwithstanding the foregoing (but subject to subsection (d) below), so long as no Event of
<br />Default shall have occurred and be continuing, in the event a payment of Awards from any
<br />Material Proceeding, Beneficiary shall be entitled to collect such Awards directly from the
<br />relevant authorities (or from Trustee, if such Awards have already been paid to Trustee) for
<br />application to the costs of replacing, or restoring and repairing, the Premises.
<br />(d) Repair Uneconomic or Not Permitted Under Lease. Notwithstanding
<br />anything to the contrary in this Section 3. 10, where a substantial portion of the Premises is
<br />condemned or taken and Grantor determines, consistent with a good faith business judgment, that
<br />(A) the portion of the Premises subject to such condemnation or taking is no longer desirable for
<br />the operation of Grantor's business or (B) it would be uneconomic for Grantor to replace or, if
<br />applicable, restore or repair such portion of the Premises, then Grantor shall not be required to
<br />NYDOCS03/596673.1 12 HALL COUNTY, NEBRASKA
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