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12316323v3 28 Section 5.10 Damage or Destruction. The Borrower agrees to notify the Trustee as soon as practicable in the case of damage exceeding $1,000,000 in amount to, or destruction of, the Project Facilities or any portion thereof resulting from fire or other casualty. In the event that any such damage or destruction does not exceed $1,000,000, the Borrower shall forthwith repair, reconstruct and restore the Project Facilities to substantially the same or an improved condition or value as existed prior to the event causing such damage and, to the extent necessary to accomplish such repair, reconstruction and restoration, the Borrower will apply the Net Proceeds of any insurance relating to such damage received by the Borrower to the payment or reimbursement of the costs thereof. Net Proceeds of any insurance relating to such damage up to $1,000,000 shall be paid directly to the Borrower. In the event the Project Facilities or any portion thereof is destroyed by fire or other casualty and the damage or destruction is estimated to exceed $1,000,000, then the Borrower shall within 90 days after such damage or destruction elect one of the following two options by written notice of such election to the Trustee: (a)Option A - Repair and Restoration. The Borrower may elect to repair, reconstruct and restore the damaged Project Facilities. In such event, the Borrower shall proceed forthwith to repair, reconstruct and restore the damaged or destroyed Project Facilities to substantially the same condition or value as existed prior to the event causing such damage or destruction and, to the extent necessary to accomplish such repair, reconstruction and restoration, the Borrower will apply the Net Proceeds of any insurance relating to such damage or destruction received by the Borrower from the Trustee to the payment or reimbursement of the costs thereof. So long as no Default exists, any Net Proceeds of insurance relating to such damage or destruction received by the Trustee shall be released from time to time by the Trustee to the Borrower upon the receipt of: (1)A Certificate of the Authorized Borrower Representative specifying the expenditures made or to be made or the indebtedness incurred in connection with such repair, reconstruction and restoration and stating that such Net Proceeds, together with any other moneys legally available for such purposes, will be sufficient to complete such repair, reconstruction and restoration; and (2)The written approval of such Certificate by an Independent Engineer. In the event the Borrower shall elect this Option A, the Borrower shall complete the repair, reconstruction and restoration of the Project Facilities, whether or not the Net Proceeds of insurance received by the Borrower for such purposes are sufficient to pay for the same. Net Proceeds not required for the repair, reconstruction and restoration of the Project Facilities shall be applied to the prepayment of the Bonds or used for such other purpose as the Borrower directs, based upon an opinion of Bond Counsel to the effect that such application of proceeds will not adversely affect the tax exempt status of interest on the Bonds. (b)Option B - Redemption of the Bonds. In the event that the Borrower shall determine that it is not practical or desirable to rebuild, repair or restore the Project Facilities, or, in case the Borrower is unable to deliver the certificates or reports necessary under Option A of