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DEED OF TRUST
<br />(Continued) Page 3
<br />dispute over the obligation to pay, so long as Lender's interest in the Property is not jeopardized. If a lien arises or
<br />is filed as a result of nonpayment, Trustor shall within fifteen (15) deys after the lien erises or, if a lien is filed,
<br />within fifteen (15) days after Trustor has notice of the filing, secure the discherge of the Ifen, or if requested by
<br />Lender, deposit with Lender cash or a sufficient corporate surety bond or other security satisfactory to Lender in an
<br />amount sufficient to discharge the Ifen plus any costs and ettorneys' fees, or other charges that could accrue as a
<br />result of a foreclosure or sele under the lien. In any contest, Trustor shall defend itself and Lender and shall satisfy
<br />any adverse judgment before enforcement agelnat the Property. Trustor shell name Lender es an additional obligee
<br />under any surety bond furnished (n the contest proceedings.
<br />Evidence of Payment. Trustor shall upon demand furnish to Lender satisfactory evidence of payment of the taxes
<br />or assessments and shall authorize the eppropriate governmental off(cial to deliver to Lender et any time a written
<br />statement of the taxes and assessments against the Property.
<br />Notice of Construction. Trustor shall notify Lender at least fifteen (15) days before any work is commenced, any
<br />services are furnished, or any materials are supplied to the Property, if any mechanic's lien, materialmen's lien, or
<br />other lien could be asserted on account of the work, services, or materials. Trustor wilt upon request of Lender
<br />furnish to Lender edvance assurances satlsfactory to Lender that Trustor can and will pay the cost of such
<br />improvements.
<br />PROPERTY DAMAGE INSURANCE. The following provisions relating to fnsuring the Property are a part of this Deed of
<br />Trust
<br />Maintenance of Insurance. Trustor shall procure and maintafn policies of fire insurance with stendard extended
<br />coverage endorsements on a fair value besis for the full insureble velue covering all Improvements on the Real
<br />Property in an amount sufficient to avoid application of any coinsurance clause, and with a standard mortgagee
<br />clause in favor of Lender. Trustor shall also procure end meintain comprehensive general liability insurance in such
<br />coverage amounts as Lender may request with Trustee and Lender being named es addittonal insureds in such
<br />liability insurance policies. Additlonally, Trustor shall maintain such other insurance, (ncluding but not limited to
<br />hazard, business interruption, and boiler insurance, as Lender may reasonebly require. Policies shall be wrttten in
<br />form, amounts, coverages and basis reasonably acceptable to Lender and issued by a company or companies
<br />reasonably acceptable to Lender. Trustor, upon request of Lender, will deliver to Lender from time to time tha
<br />policies or certificates of insurance in form satisfactory to Lender, including stipulaUons that covereges will not be
<br />cancelled or diminished without et least thirty (30) days prior written notice to Lender. Each insurance policy also
<br />shall include en endorsement providing that coverage in favor of Lender will not be impaired in any way by eny act,
<br />omission or default of Trustor or eny other person. Should the Real Property be located in an area designated by
<br />the Director of the Federal Emergency Management Agency as a apecial flood hazard area, Trustor agrees to obtain
<br />and maintain Federal Flood Insurance, if available, for the full unpaid principal balance of the loen and eny prior
<br />liens on the property securing the loan, up to the maximum policy Iimits set under the National Flood Insurence
<br />Program, or as otherwise required by Lender, and to maintain such insurence for the term of the toen.
<br />AppUcat(on of Proceeds. Trustor shall promptly notffy Lender of eny loss or demage to the Property. Lender may
<br />make proof of loss if Trustor fails to do so within fifteen (16) days of the casualty. Whethar or not Lender's
<br />security is impaired, Lender may, at Lender's electfon, receive and retain the proceeds of any insurance and apply
<br />the proceeds to the reduction of the Indebtedness, payment of any lien affecting the Properry, or the restoraUon
<br />and repair of the Property. If Lender elects to apply the proceeds to restoration and repair, Trustor shall repeir or
<br />replace the damaged or destroyed Improvements in a manner setisfactory to Lertder. Lender shell, upon
<br />satisfactory proof of such expenditure, pay or reimburse Trustor from the proceeds for the reasonabla cost of
<br />repair or restoration if Trustor is not in default under this Deed of Trust. Any proceeda which have not been
<br />disbursed within 180 days efter their receipt and which Lender has not committed to the repair or restoration of
<br />the Property shell be used first to pey any amount owing to Lender under this Deed of Trust, then to pay accrued
<br />interest, and the remainder, if any, shell be applied to the principel balance of the Indebtedness. If Lender holds
<br />any proceeds after payment in full of the Indebtedness, such proceeds shell be paid to Trustor as Trustor's
<br />interests may appear.
<br />Compllance with Existing Indebtedness. Durfng the period in which any Existing Indebtedness described below is
<br />in effect, compliance with the insurance provisions contained in the instrument evidencing such Existing
<br />Indebtedness shall constitute compliance with the insurance provisions under this Deed of Trust, to the extent
<br />compliance with the terms of this Deed of Trust would constitute a duplication of insurance requirement. If any
<br />proceeds from the insurance become payable on loss, the provisions (n this Deed of Trust for division of proceeds
<br />shall apply only to that portion of the proceeds not payeble to the holder of the Existing Indebtedness.
<br />Trustor's Report on Insurence. Upon request of Lender, however not more than once e year, Trustor shall furnish
<br />to Lender a report on each existing policy of insurance showing: (1) the name of the insurer; (2) the risks
<br />insured; (3) the amount of the policy; (4) the property insured, the then current replacement velue of such
<br />property, and the manner of determining that value; end (5) the expiration date of the policy. Trustor shall, upon
<br />request of Lender, have an independent appralser satisfactory to Lender determine the cash velue replacement cost
<br />of the Property.
<br />LENDER'S EXPENDITURES. If any action or proceeding is commenced thet would materielly affect Lender's interest in
<br />the Property or if Trustor fails to comply with any provision of this Deed of Trust or any Related Documents, Includfng
<br />but not limited to Trustor's failure to comply with any obligation to meintain Existing Indebtedness in good stending es
<br />required below, or to discharge or pay when due any amounts Trustor is required to discharge or psy under this Deed of
<br />Trust or any Related Documents, Lender on Trustor's behalf may (but shall not be obligated to) take any action that
<br />Lender deems appropriate, including but not Iimited to discharging or paying ell taxes, Uens, security interests,
<br />encumbrances and other claims, at any time levfed or placed on the Property and paying ell costs for insuring,
<br />maintaining and preserving the Property. All such expenditures incurred or peid by Lender for such purposea will then
<br />bear interest at the rete charged under the Note from the date incurred or peid by Lender to the date of repeyment by
<br />Trustor. All such expenses will become a part of the Indebtedness end, at Lender's option, wfll (A) be payeb�e on
<br />demand; (B) be added to the balance of the Note end be apportioned among and be payable with any installment
<br />payments to become due during either (1) the term of any applicable insurence policy; or (2) the remaining, term of
<br />the Note; or (C) be treated as a balloon payment which will be due and payable at the Note's maturfty. The Deed of
<br />Trust also will secure payment of these amounts. Such right shell be in addition to all other rights and remedies to
<br />which Lender may be entitled upon Default.
<br />WARRANTY; DEFENSE OF TITLE. The following provislons relating to ownership of the Property are a pert of this Deed
<br />of Trust:
<br />Title. Trustor warrents that: (a) Trustor holds good and marketable title of record to the Property in fee simple,
<br />free and clear of all liens and encumbrances other than those set forth in the Real Property description or fn the
<br />Existing Indebtedness section below or In eny t(tle insurence policy, title report, or finel title opinion iasued in favor
<br />of, and accepted by, Lender in connection with this Deed of Trust, and (b) Trustor has the full right, power, and
<br />authority to execute and deliver this Deed of Trust to Lender.
<br />Defense of Tttle. Subject to the exception fn the paragreph above, Trustor werrants and will forever defend the
<br />title to the Property against the lewful cla(ms of all persons. In the event any action or proceeding la commenced
<br />that questions Trustor's title or the fnterest of Trustee or Lender under this Deed of Truat, Trustor shall defend the
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