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200001684 REPRESENTATIONS AND OBLIGATIONS CONCERNING THE PROPERTY We promise that except for the "Exceptions" listed in any title insurance policy which insures Merrill Lynch's rights in the Property: (a) we lawfully own the Property; (b) we have the right to grant and convey the Property to Trustee; and (c) there are no outstanding claims or charges against the Property. We give a general warranty of title to Merrill Lynch. This means that we will be fully responsible for any losses which Merrill Lynch suffers because someone other than us has some of the rights in the Property which we promise that we have. We promise that we will defend our ownership of the Property against any claims of such rights. We further promise that we will neither take nor permit any action to partition or subdivide all or part of the Property, or change in any way the condition of title to all or part of the Property. PROVISIONS OF THE AGREEMENT We understand that the Agreement calls for a variable interest rate, and that Merrill Lynch may, prior to the end of the term of the Agreement and under certain circumstances specified in the Agreement, cancel its obligation to make future advances, and /or require accelerated repayment of the outstanding balance, under the Agreement. The Agreement provisions below relate to the variable interest rate. The paragraph in the Agreement, entitled "Interest," provides, in part, as follows: (a) ANNUAL INTEREST RATE. The annual interest rate applied to our Outstanding Principal Balance is calculated daily and equals the Prime Rate plus one and one half percent (1.50 %) (b) PRIME RATE. The Prime Rate for any date is the "prime rate" published by The Wall Street Journal for that date. If a "prime rate" range is published by The Wall Street Journal, then the highest rate of that range will be used. If The Wall Street Journal does not publish a prime rate or a prime rate range for any date, then the prime rate or the highest rate of the prime rate range published by The Wall Street Journal for the most recent day within four (4) days prior to that date, for which The Wall Street Journal does publish a prime rate or a prime rate range, will be used. If The Wall Street Journal fails to publish a prime rate or a prime rate range for any date or for any day within four (4) days prior to that date, Merrill Lynch will use a substitute index, to be determined at that time, that has an historical movement substantially similar to that of the prime rate published in The Wall Street Journal, and that would result in an annual percentage rate substantially similar to the rate in effect at the time the prime rate published in The Wall Street Journal becomes unavailable. (c) VARIABLE INTEREST RATE. This Agreement provides that the annual interest rate will change when the Prime Rate changes, which means that an increase or decrease in the annual interest rate will take effect on the day the Prime Rate changes. The maximum corresponding (nominal) ANNUAL PERCENTAGE RATE will not exceed 16 .25 percent. Decreases in the annual interest rate are mandatory as the Prime Rate decreases. We understand that we will not be provided with any advance notice of changes in the annual interest rate or the prime rate. PROMISES AND AGREEMENTS We agree with Merrill Lynch as follows: 1. Payment of Principal and Interest. Except as limited by paragraph 10 of this Deed of Trust, we shall promptly pay when required by the Agreement, the principal and interest due under the Agreement, together with any late charges and other charges imposed under the Agreement. 2. Application of Payments. Unless prohibited by law, all payments received by Merrill Lynch under the Agreement and this Deed of Trust shall be applied by Merrill Lynch first to reduce any sums outstanding under the line of credit secured by this Deed of Trust (the "Account") which are in excess of the credit available under the Account, then in payment of the amounts payable to Merrill Lynch by us under paragraphs 6 and 27 of this Deed of Trust, then to charges payable under the Agreement (other than those specifically identified in this paragraph 2), then to interest, and then to the principal payable under the Agreement. 3. Prior Morteages and Djd &jffi #A; ja! j$rges• Liens We shall fully and timely perform all of our obligations � -ors —r under any mortgage, deed of trust or other security agreement which is prior to this Deed of Trust, including our obligations to make any payments when due. We shall pay or cause to be paid, at least ten (10) calendar days before delinquency, all taxes, assessments and other charges, fines and impositions relating to the Property and all encumbrances, charges, loans, and liens (other than any prior mortgage or deed of trust) on the Property which may become prior to this Deed of Trust, and leasehold payments or ground rents, if any. We shall deliver to Merrill Lynch, upon its request, receipts evidencing such payment. If, at the time Merrill Lynch elects to terminate the Account as provided in paragraph 15 below, there is an assessment which is payable in installments at our election or at the election of the lessee of the Property, that assessment will nevertheless be considered entirely due and payable on the day the first instalhaent becomes due or payable or a lien. -2-