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06- 02-2000 200004840 DEED OF TRUST Page 3
<br />Loan No (Continued)
<br />TAXES AND LIENS. The following provisions relating to the taxes and liens on the Property are a part of this Deed of Trust.
<br />Payment. Trustor shall pay when due (and in all events prior to delinquency) all taxes, special taxes, assessments, charges (including water
<br />and sewer), fines and impositions levied against or on account of the Property, and shall pay when due all claims for work done on or for
<br />services rendered or material furnished to the Property. Trustor shall maintain the Property free of all liens having priority over or equal to the
<br />interest of Lender under this Deed of Trust, except for the lien of taxes and assessments not due, except for the existing indebtedness referred
<br />to below, and except as otherwise provided in this Deed of Trust.
<br />Right To Contest. Trustor may withhold payment of any tax, assessment, or claim in connection with a good faith dispute over the obligation
<br />to pay, so long as Lender's interest in the Property is not jeopardized. If a lien arises or is filed as a result of nonpayment, Trustor shall within
<br />fifteen (15) days after the lien arises or, if a lien is filed, within fifteen (15) days after Trustor has notice of the filing, secure the discharge of the
<br />lien, or if requested by 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 lien plus any costs and attorneys' fees or other charges that could accrue as a result of a foreclosure or sale
<br />under the lien. In any contest, Trustor shall defend itself and Lender and shall satisfy any adverse judgment before enforcement against the
<br />Property. Trustor shall name Lender as an additional obligee under any surety bond furnished in the contest proceedings.
<br />Evidence of Payment. Trustor shall upon demand furnish to Lender satisfactory evidence of payment of the taxes or assessments and shall
<br />authorize the appropriate governmental official to deliver to Lender at any time a written statement of the taxes and assessments against the
<br />Property.
<br />Notice of Construction. Trustor shall notify Lender at least fifteen (15) days before any work is commenced, any services are furnished, or any
<br />materials are supplied to the Property, if any mechanic's lien, materialmen's lien, or other lien could be asserted on account of the work,
<br />services, or materials. Trustor will upon request of Lender furnish to Lender advance assurances satisfactory to Lender that Trustor can and will
<br />pay the cost of such improvements.
<br />PROPERTY DAMAGE INSURANCE. The following provisions relating to insuring the Property are a part of this Deed of Trust.
<br />Maintenance of Insurance. Trustor shall procure and maintain policies of fire insurance with standard extended coverage endorsements on a
<br />replacement basis for the full insurable value covering all Improvements on the Real Property in an amount sufficient to avoid application of any
<br />coinsurance clause, and with a standard mortgagee clause in favor of Lender, together with such other hazard and liability insurance as Lender
<br />may reasonably require. 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 from time to time the policies
<br />or certificates of insurance in form satisfactory to Lender, including stipulations that coverages will not be cancelled or diminished without at
<br />least ten (10) days' prior written notice to Lender. Each insurance policy also shall include an endorsement providing that coverage in favor of
<br />Lender will not be impaired in any way by any act, omission or default of Trustor or any other person. Should the Real Property at any time
<br />become located in an area designated by the Director of the Federal Emergency Management Agency as a special flood hazard area, Trustor
<br />agrees to obtain and maintain Federal Flood Insurance for the full unpaid principal balance of the loan and any prior liens on the property
<br />securing the loan, up to the maximum policy limits set under the National Flood Insurance Program, or as otherwise required by Lender, and to
<br />maintain such insurance for the term of the loan.
<br />Application of Proceeds. Trustor shall promptly notify Lender of any loss or damage to the Property. Lender may make proof of loss if Trustor
<br />fails to do so within fifteen (15) days of the casualty. Whether or not Lender's security is impaired, Lender may, at its election, receive and retain
<br />the proceeds of any insurance and apply the proceeds to the reduction of the Indebtedness, payment of any lien affecting the Property, or the
<br />restoration and repair of the Property. If Lender elects to apply the proceeds to restoration and repair, Trustor shall repair or replace the
<br />damaged or destroyed Improvements in a manner satisfactory to Lender. Lender shall, upon satisfactory proof of such expenditure, pay or
<br />reimburse Trustor from the proceeds for the reasonable cost of repair or restoration if Trustor is not in default under this Deed of Trust. Any
<br />proceeds which have not been 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 first to pay any amount owing to Lender under this Deed of Trust, then to pay accrued interest, and the remainder, if
<br />any, shall be applied to the principal balance of the Indebtedness. if Lender holds any proceeds after payment in full of the Indebtedness, such
<br />proceeds shall be paid to Trustor as Trustor's interests may appear.
<br />Unexpired Insurance at Sale. Any unexpired insurance shall inure to the benefit of, and pass to, the purchaser of the Property covered by this
<br />Deed of Trust at any trustee's sale or other sale held under the provisions of this Deed of Trust, or at any foreclosure sale of such Property.
<br />Compliance with Existing Indebtedness. During the period in which any Existing Indebtedness described below is in effect, compliance with
<br />the insurance provisions contained in the instrument evidencing such Existing Indebtedness shall constitute compliance with the insurance
<br />provisions under this Deed of Trust, to the extent compliance with the terms of this Deed of Trust would constitute a duplication of insurance
<br />requirement. If any proceeds from the insurance become payable on loss, the provisions in this Deed of Trust for division of proceeds shall
<br />apply only to that portion of the proceeds not payable to the holder of the Existing Indebtedness.
<br />TAX AND INSURANCE RESERVES. Subject to any limitations set by applicable law, Lender may require Trustor to maintain with Lender reserves
<br />for payment of annual taxes, assessments, and insurance premiums, which reserves shall be created by advance payment or monthly payments of a
<br />sum estimated by Lender to be sufficient to produce amounts at least equal to the taxes, assessments, and insurance premiums to be paid. The
<br />reserve funds shall be held by Lender as a general deposit from Trustor, which Lender may satisfy by payment of the taxes, assessments, and
<br />insurance premiums required to be paid by Trustor as they become due. Lender shall have the right to draw upon the reserve funds to pay such
<br />items, and Lender shall not be required to determine the validity or accuracy of any item before paying it. Nothing in the Deed of Trust shall be
<br />construed as requiring Lender to advance other monies for such purposes, and Lender shall not incur any liability for anything it may do or omit to
<br />do with respect to the reserve account. Subject to any limitations set by applicable law, if the reserve funds disclose a shortage or deficiency, Trustor
<br />shall pay such shortage or deficiency as required by Lender. All amounts in the reserve account are hereby pledged to further secure the
<br />Indebtedness, and Lender is hereby authorized to withdraw and apply such amounts on the Indebtedness upon the occurrence of an Event of
<br />Default. Lender shall not be required to pay any interest or earnings on the reserve funds unless required by law or agreed to by Lender in writing.
<br />Lender does not hold the reserve funds in trust for Trustor, and Lender is not Trustor's agent for payment of the taxes and assessments required to
<br />be paid by Trustor.
<br />EXPENDITURES BY LENDER. If Trustor fails to comply with any provision of this Deed of Trust, including any obligation to maintain Existing
<br />Indebtedness in good standing as required below, or if any action or proceeding is commenced that would materially affect Lender's interests in the
<br />Property, Lender on Trustor's behalf may, but shall not be required to, take any action that Lender deems appropriate. Any amount that Lender
<br />expends in so doing will bear interest at the rate provided for in the Note from the date incurred or paid by Lender to the date of repayment by
<br />Trustor. All such expenses, at Lender's option, will (a) be payable on demand, (b) be added to the balance of the Note and be apportioned among
<br />and be payable with any installment payments to become due during either (i) the term of any applicable insurance policy or (ii) the remaining term
<br />of the Note, or (c) be treated as a balloon payment which will be due and payable at the Note's maturity. This Deed of Trust also will secure
<br />payment of these amounts. The rights provided for in this paragraph shall be in addition to any other rights or any remedies to which Lender may be
<br />entitled on account of the default. Any such action by Lender shall not be construed as curing the default so as to bar Lender from any remedy that
<br />it otherwise would have had.
<br />WARRANTY; DEFENSE OF TITLE. The following provisions relating to ownership of the Property are a part of this Deed of Trust.
<br />Title. Trustor warrants that: (a) Trustor holds good and marketable title of record to the Property in fee simple, free and clear of all liens and
<br />encumbrances other than those set forth in the Real Property description or in the Existing Indebtedness section below or in any title insurance
<br />policy, title report, or final title opinion issued in favor of, and accepted by, Lender in connection with this Deed of Trust, and (b) Trustor has the
<br />full right, power, and 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 title to the Property against the
<br />lawful claims of all persons. In the event any action or proceeding is commenced that questions Trustor's title or the interest of Trustee or
<br />Lender under this Deed of Trust, Trustor shall defend the action at Trustor's expense. Trustor may be the nominal party in such proceeding, but
<br />Lender shall be entitled to participate in the proceeding and to be represented in the proceeding by counsel of Lender's own choice, and
<br />Trustor will deliver, or cause to be delivered, to Lender such instruments as Lender may request from time to time to permit such participation.
<br />Compliance With Laws. Trustor warrants that the Property and Trustor's use of the Property complies with all existing applicable laws,
<br />ordinances, and regulations of governmental authorities.
<br />EXISTING INDEBTEDNESS. The following provisions concerning existing indebtedness (the "Existing Indebtedness ") are a part of this Deed of
<br />Trust.
<br />Existing Lien. The lien of this Deed of Trust securing the Indebtedness may be secondary and inferior to an existing lien. Trustor expressly
<br />covenants and agrees to pay, or see to the payment of, the Existing Indebtedness and to prevent any default on such indebtedness, any default
<br />under the instruments evidencing such indebtedness, or any default under any security documents for such indebtedness.
<br />Default. If the payment of any installment of principal or any interest on the Existing Indebtedness is not made within the time required by the
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