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D (Con�t nu d) � � � � o `'� � � �' Page 3
<br />Property in an amount sufficfent to avoid application of any coinsurance clause, and with a standard mortgagee
<br />clause in favor of Lender, together with such other hazard and liability insurance as Lender may reasonably require.
<br />Policies shall be written in form, amounts, coverages and basis reasonably acceptable to Lender and issued by a
<br />company or companies reasonably acceptable to Lender. Trustor, upon request of Lender, will deliver to Lender
<br />from time to Ume the policies ar certiflcates of insurance in for►n satisfactory to Lender, inGuding sttpulaUons that
<br />coverages will not be cancelled or diminished without at least ten (10) days prior written noUce to Lender. Each
<br />insurance policy also shall include an endo�sement providing that coverage in favor of Lender will not be impaired
<br />in any way by any act, omission or default of Trustor or any other person. Should the Real Property be located in
<br />an area designated by the Director of the Federal Emergency Management Agency as a special flood hazard area,
<br />Trustor agrees to obtain and maintain F�eral Flood Insurance, if available, for the full unpaid p�incipal balance of
<br />the loan and any prior Ifens on the property securing the loan, up to the maximum policy limits set under the
<br />National Flood insurance Program, or as othervvise required by Lender, and to maintain such insurance for the term
<br />of the loan.
<br />ApplicaUon of Proceeds. Trustor shall promptly notify Lender of any loss or damage to the Property. Lender may
<br />make proof of Ioss if Trustor fails to do so within fifteen (15) days of the casualty. Whefiher or not Lender's
<br />security is impaired, Lender may, at Lender's election, receive and retain the proceeds of any ir�surance and apply
<br />the proceeds to the reduction of the' Indebtedness, payment of any lien affecting the Property, or the restoraUon
<br />and repair of the Property. If Lender elects to apply the proceeds to restoraUon and repair, Trustor shall repafr or
<br />replace the damaged or desVoyed Improvements in a manner satisfactory to Lender. Lender shall, upon
<br />satisfactory proof of such expenditure, pay or reimbu�se Trustor from the proceeds for the reasonable cost of
<br />repair or restoraUon if Trustor is not in default under this Deed of Trust. Any proceeds which have not been
<br />disbursed within 180 days after their receipt and which Lender has not committed to the repair or restoration of
<br />the Property shall be used flrst to pay any amount owing to Lender under this Deed of Trust, then to pay accrued
<br />interest, and the remainder, if any, shall be applied to the principal balance of the Indebtedness. If Lender holds
<br />any proceeds after payment in full of the Indebtedness, such proceeds shall be paid to Trustor as Trustor's
<br />interests may appear.
<br />Compliance with Existing Indebtedness. During the perfod in which any Existing Indebtedness described below fs
<br />in effect, compliance with the insurance provfsions contalned 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 consUtute a duplication of insurance requirement. If any
<br />proceeds from the insurance become payable on loss, the provisions in this Deed of Trust for division of proceeds
<br />shall appiy only to that portion of the proceeds not payable to the holder of the Existing Indebtedness.
<br />LENDER'S EXPENDITURES. If Trustor fails (A) to keep the Property free of all taxes, Ifens, security interests,
<br />encumbrances, and other claims, (B) to provide any required insurance on the Property, (C) to make repairs to the
<br />Property or to comply with any obligation to maintain Existing Indebtedness in good standing as required betow, then
<br />Lender may do so. If any action or proc�eding is commenced that would materially affect Lender's interests in the
<br />Property, then Lender on Trustor's behalf may, but is not required to, take any action that Lender beUeves to be
<br />appropriate to protect Lender's interests. All expenses incurred or paid by Lender for such purposes witl then bear
<br />interest at the rate charged under the Note from the date incurred or paid by Lender to the date of repayment by
<br />Trustor. All such expenses will become a part of the Indebtedness and, at Lender's option, will (A) be payable on
<br />demand; (B) be added to the balance of the Note and be apportioned among and be payable with any installment
<br />payments to become due during either (1) the term of any applicable insurance 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 maturity. The Deed of
<br />Trust also will secure payment of these amounts. The rights provided for in this paragraph shall be in add�fon to any
<br />other �ighis or any remedies to which Lender maq be entiUed on account of any default My such ac4lon by Lender
<br />shall not be construed as curing the default so as to bar Lender from any remedy that it otherwfse would have had.
<br />WARRANTY; DEFENSE OF TITLE. The following provisions relating to ownership of the Property are a part of this Deed
<br />of Trust:
<br />Title. Trustor warrants that: (a) Trustor holds good and marketable Utle 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 in the
<br />Exfsting Indebtedness sectfon below or in any tlUe insurance policy, title report, or final Utle opinion issued 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 Title. Subject to the exception in the paragraph above, Trustor warrants and will forever defend the
<br />title to the Property against the lawful claims of all persons. In the event any action or proceeding is commenced
<br />that questions Trustor's title or the interest of Trustee or Lender under this Deed of Trust, Trustor shall defend the
<br />action at Trustor's expense. Trustor may be the nominal party in such proceedfng, but Lender shall be entitled to
<br />participate in the proceeding and to be represented in the proceeding by counsel of Lender's own chofce, and
<br />Trustor will deliver, or cause to be detivered, to Lender such instruments as Lender may request from Ume to time
<br />to permft such participation.
<br />Compliance With Laws. Trustor warrants that the Property and Trustor's use of the Property complies with all
<br />existing applicable laws, ordinances, and regulations of govemmental authorities.
<br />Survival of Promises. Ali promises, agreements, and statements Trustor has made fn this Deed of Trust shall
<br />survive the execuUon and delivery of this Deed of Trust, shall be contlnuing in nature and shall remain in full force
<br />and effect until such time as Borrower's Indebtedness is paid in full.
<br />EXISTING INDEBTEDNESS. The following provisions concernfng Existing Indebtedness are a part of this Deed of Trust:
<br />Existing Llen. The lien of this Deed of Trust securing the Indebtedness may be secondary and inferior to an
<br />existing lien. Trustor expressly c�venants and agrees to pay, or see to the payment of, the Existing Indebtedness
<br />and to prevent any default on such indebtedness, any default under the instruments evidencing such indebtedness,
<br />or any default under any security documents for such indebtedness.
<br />No ModiflcaUon. Trustor shalt not enter into any agreement with the holder of any mortgage, deed of trust, or
<br />other security agreement which has priority over this Deed of Trust by which that agreement is modffied,
<br />amended, extended, or renewed without the prior written consent of Lender. Trustor shall ne'ither request nor
<br />accept any future advances under any such securfty agreement without the prior written consent of Lender.
<br />CONDEMNATION. The following provisions relating to condemnation proceedings are a part of this Deed of Trust:
<br />Proceedings. If any proceeding in condemnation is filed, Trustor shall prompUy notify Lender in writing, and
<br />Trustor shall promptly take such steps as may be necessary to defend the action and obtein the award. Trustor
<br />may be the nominat party in such proceeding, but Lender shall tre entltled to participate in the proceeding and to be
<br />represented in the proceeding by counsel of its own choice, and Trustor will delNer or cause to be delivered to
<br />Lender such instruments and documentation as may be requested by Lender irom time to tfine to permit such
<br />participaUon.
<br />ApplicaUon of Net Proceeds. If all or any part of the Property is condemned by eminent domain proceedings or by
<br />any proceeding or purchase in Ifeu of condemnation, Lender may at its election require that all or any portion of the
<br />net proceeds of the award be applied to the Indebtedness or the repair or restoratlon of the Property. The net
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