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- 8 - 200512344 $500,000, the Trustor shall give prompt notice thereof to the Beneficiary and shall cause all Casualty or Condemnation Proceeds, as the case may be, to be paid to the Beneficiary as additional collateral security hereunder subject to the Lien of this Deed of Trust. Upon receipt by the Beneficiary of any such proceeds (including, without limitation, any Casualty Proceeds payable directly to the Beneficiary as loss payee under the respective policies maintained pursuant to paragraph (a) of this Section 1.05), the Beneficiary shall deposit the same into a cash collateral account (the "Restoration Account") in the name and under the control of the Beneficiary. The balance from time to time in the Restoration Account shall constitute part of the Trust Estate hereunder and shall not constitute payment ofthe Obligations until applied as hereinafter provided. (d) Application of Proceeds. Following the occurrence of any Casualty or Condemnation involving the Trust Estate or any part thereof resulting in a loss in excess of $500,000, but without limiting its obligations under Section 1.07 to restore and repair any Improvements and Fixtures affected by such event, the Trustor may, at its option, to be exercised by delivery of notice to the Beneficiary within thirty days of such Casualty or Condemnation, elect to either apply any Casualty or Condemnation Proceeds received as a result of such event: (i) to the restoration and repair of that part of the Trust Estate affected by such Casualty or Condemnation (the "Affected Property"); or (ii) to the prepayment of the Loans or other indebtedness constituting the Obligations hereunder in the manner and to the extent specified in Section 2.08(b) ofthe Credit Agreement and, to the extent not required to be prepaid under Section 2.08(b) of the Credit Agreement, to be paid to the Trustor or to the repayment of Indebtedness under Section 2.08(a) ofthe Credit Agreement. Failure ofthe Trustor to make such an election within thirty days from the date of the respective Casualty or Condemnation shall automatically constitute an election to so apply the respective Casualty or Condemnation Proceeds to the prepayment as aforesaid ofthe indebtedness secured hereby. If the Trustor elects to so restore and repair the Affected Property, any amounts (and any earnings thereon) held in the Restoration Account shall be applied by the Beneficiary to the restoration and repair of the Affected Property and advanced to the Trustor in periodic installments upon compliance by the Trustor with such reasonable conditions to disbursement as may be imposed by the Beneficiary, including, but not limited to, reasonable retention amounts and receipt of lien releases. Anything in this Section 1.05 to the contrary notwithstanding, the Beneficiary shall have no obligation to release any amounts held in the Restoration Account to the Trustor for restoration or repair of the Affected Property if a Default (as defined in Section 4.01), or any event that with lapse oftime or with notice and lapse of time would become a Default, has occurred and is continuing. If a Default, or any event that with lapse of time or with notice and lapse oftime would become a Default, has occurred and is continuing, the Beneficiary may, in Deed of Trust NY3:#7374669