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<br />3, Construction of Improvements. Trustor shall complete in good and workmanlike manner any buildings, improvements or repairs
<br />relating thereto which may be begun on the Trust Property or contemplated by the loan evidenced by the Note secured hereby,
<br />to pay when due all costs and liabilities incurred therefore, and not to permit any construction lien against such Trust Property.
<br />In the event construction of buildings, improvements or repairs are contemplated, Trustor also agrees, anything in this Deed of
<br />Trust to the contrary notwithstanding; (a) to promptly commence any such work and to complete the proposed improvements
<br />promptly, (b) to complete the same in accordance with the plans and specifications as approved by Beneficiary, (c) to comply
<br />with all the terms of a building loan agreement, if any, between Trustor and Beneficiary, the terms of which are incorporated
<br />herein by reference and made a part hereof, (d) to allow Beneficiary to inspect the Trust Property at all times during
<br />construction, and (e) to replace any work or materials unsatisfactory to Beneficiary within fifteen (15) days after written notice
<br />from Beneficiary of such fact.
<br />4. Funds for Payment of Charges. Subject to applicable law or to a written waiver by Beneficiary, Trustor shall pay to Beneficiary
<br />on the first day of each month, or such other date each month as may be specified by Beneficiary, until the Indebtedness is paid
<br />in full, a sum (hereinafter called the "Funds ") equal to 1/12th of the yearly taxes and assessments which may attain priority over
<br />this Deed of Trust and ground rents on the Trust Property, if any, plus 1/12th of the yearly premium installments for hazard
<br />insurance, plus 1/12th of the yearly premium installments for mortgage insurance, if any, all as reasonably estimated initially and
<br />from time to time by Beneficiary on the basis of assessments and bills and reasonable estimates thereof. The Funds shall be
<br />held in an institution, the deposits or accounts of which are insured or guaranteed by a federal or state agency including
<br />Beneficiary. Beneficiary shall apply the Funds to pay said taxes, assessments, insurance premiums and ground rents.
<br />Beneficiary shall not be required to pay Trustor any interest or earnings on the Funds. Beneficiary shall give to Trustor, without
<br />charge, an annual accounting of the Funds showing credits and debits to the Funds and the purpose for which each debit to the
<br />Funds was made. The Funds are pledged as additional security for the Indebtedness secured by this Deed of Trust. If the
<br />amount of the Funds held by Beneficiary, together with the future monthly installments of Funds payable prior to the due dates
<br />of taxes, assessments, insurance premiums and ground rents, shall exceed the amount required to pay said taxes,
<br />assessments, insurance premiums and ground rents as they fall due, such excess shall be, at Trustor's option, either
<br />promptly repaid to Trustor or credited to Trustor against future monthly installments of Funds. If the amount of the Funds held
<br />by Beneficiary shall not be sufficient to pay taxes, assessments, insurance premiums and ground rents as they fall due, Trustor
<br />shall pay to Beneficiary any amount necessary to make up the deficiency within thirty days from the date notice is mailed by
<br />Beneficiary to Trustor requesting payment thereof. Upon payment in full of all Indebtedness, Beneficiary shall promptly refund to
<br />Trustor any Funds held by Beneficiary. If the Trust Property is sold under the power of sale or the Trust Property is otherwise
<br />acquired by Beneficiary, Beneficiary shall apply, immediately prior to the sale of the Trust Property or its acquisition by
<br />Beneficiary, any Funds held by Beneficiary at the time of application as a credit against the Indebtedness. If Beneficiary
<br />executes a written waiver of Trustor's obligations under this paragraph 4, Trustor covenants and agrees to pay, before the same
<br />become delinquent, all taxes, assessments, insurance premiums, ground rents, and all other charges whatsoever levied upon or
<br />assessed, placed or made against the Trust Property. Trustor further agrees, upon written request by Beneficiary, to promptly
<br />deliver to Beneficiary all receipts for the payment of such charges. Trustor likewise agrees to pay all taxes, assessments and
<br />other charges levied upon or assessed, placed or made against, or measured by, this Deed of Trust or the recordation hereof.
<br />5. Application of Payments. All payments received by Beneficiary as to any debt, liability or obligation owed to Beneficiary by
<br />Trustor may be applied by Beneficiary to the payment of the Indebtedness or to any such other debt, liability or obligation, in any
<br />order or manner of application which Beneficiary, in its absolute discretion, deems appropriate. Unless otherwise elected
<br />by Beneficiary, any such payment shall be deemed applied first to the payment of any debt, liability or obligation other
<br />than the Note.
<br />6. Charges; Liens. Trustor will keep the Trust Property free from all liens and encumbrances which in any way may, in the
<br />judgment of Beneficiary, have priority over, or impair the security of, this Deed of Trust but Trustor need not discharge any such
<br />lien so long as Trustor shall agree, in writing, to pay the obligation secured by such lien in a'manner acceptable to Beneficiary
<br />and shall in good faith contest such lien by appropriate legal proceedings effective to prevent the enforcement of the lien and the
<br />loss of any interest in or part of the Trust Property.
<br />7. Hazard Insurance. Trustor shall keep the buildings and other improvements now existing or hereafter erected on the Trust
<br />Property insured by insurance carriers satisfactory to Beneficiary against loss by fire, hazards included in the term "extended
<br />coverage" and such other hazards, casualties and contingencies as may be required by Beneficiary, in such amounts and for
<br />such periods as may be required by Beneficiary. The policy of insurance shall be in form acceptable to Beneficiary, provide that
<br />the same may not be canceled or modified without fifteen (15) days prior written notice to Beneficiary, and shall have loss
<br />payable provisions in favor of and in form acceptable to Beneficiary. All premiums on insurance policies shall be paid in the
<br />manner provided under paragraph 4 hereof or, it not paid in such manner, by Trustor making payment at least fifteen (15) days
<br />prior to the due date, directly to the insurance carrier. Beneficiary shall have the right to hold the policies and renewals thereof
<br />and Trustor shall promptly furnish to Beneficiary all renewal notices and all paid premium receipts received by it. In no event
<br />shall Beneficiary or Trustee be held responsible for failure to pay insurance premiums or for any loss or damage arising out of a
<br />defect in any policy or arising out of any failure of any insurance company to pay for any loss or damage insured against or for
<br />failure by Trustor to effect the insurance required hereunder. In the event of loss, Trustor shall give prompt notice by mail to
<br />the insurance carrier and Beneficiary. Beneficiary may make proof of loss if not made promptly or in proper form by Trustor. All
<br />policies of insurance and any and all refunds of unearned premiums are hereby assigned to Beneficiary as additional security
<br />for the payment of the Indebtedness. In the event of Beneficiary's exercise of the power of sale contained herein, or in the event
<br />of foreclosure, all right, title and interest of Trustor in and to any insurance policy then in force shall pass to the purchaser at the
<br />trustee's sale or foreclosure sale. In case of any loss, the insurance proceeds may, at the option of Beneficiary, be applied by
<br />Beneficiary upon the Indebtedness, or any part thereof, and in such order and amount as Beneficiary may determine; or said
<br />insurance proceeds, at the option of Beneficiary, may either be used in replacing or restoring the Trust Property partially or
<br />totally destroyed to a condition satisfactory to Beneficiary; or said insurance proceeds, or any portion thereof, may be released
<br />to Trustor. Unless Beneficiary and Trustor otherwise agree in writing, any such application of insurance proceeds shall not
<br />extend or postpone the due date of the Note, or any installments called for therein, or change the amount of such installments.
<br />If the Trust Property is acquired by Beneficiary pursuant to the exercise of the power of sale or other foreclosure, all right, title
<br />and interest of Trustor in and to any insurance proceeds payable as a result of damage to the Trust Property prior to the sale or
<br />acquisition shall pass to Beneficiary and shall be applied first to the costs and expenses, including attorney fees, incurred in
<br />collecting such proceeds, then in the manner and in the order provided herein.
<br />8. Preservation and Maintenance of Trust Property. Trustor will keep the buildings and other improvements now or hereafter
<br />erected on the Trust Property in good repair and condition and will not commit or permit waste, will not alter the design or
<br />structural character constituting any building now or hereafter erected on and constituting the Trust Property without the prior
<br />written consent of Beneficiary, will not do any act or thing which would unduly impair or depreciate the value of the Trust
<br />Property and will not abandon the Trust Property. Trustor will not remove any fixtures constituting the Trust Property unless the
<br />same are immediately replaced with like property subject to the lien and security interest of this Deed of Trust and of at least
<br />equal value and utility. Trustor will comply with all present and future ordinances. Regulations and requirements of any
<br />governmental body which are applicable to the Trust Property and to the occupancy and use thereof. If this Deed of Trust is on
<br />a unit in a condominium or a planned unit development, Trustor shall perform all of Trustor's obligations under the declarations
<br />or covenants creating or governing the condominium or the planned unit development, the bylaws and regulations of the
<br />condominium or planned unit development, and the constituent documents.
<br />9. Inspection. Beneficiary or its agents may, at all reasonable times, enter upon the Trust Property for the purpose of inspection.
<br />Beneficiary shall have no duty to make such inspection and shall not be liable to Trustor or to any person in possession if it
<br />makes or fails to make any such inspection.
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