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3. INSURANCE Trustor shall maintain fire and extended coverage insurance insuring the improvements and buildings constituting part of the Trust Estate for an amount no less than the amount of the unpaid principal balance of the Note, including all extensions or modifications thereof. The insurance policy shall contain a standard mortgage clause in favor of Beneficiary and shall not be cancelable, terminable, or modifiable without ten (10) days prior written notice to Beneficiary. A certificate showing proof of such insurance shall be delivered to Beneficiary. In the event Beneficiary so elects, Trustor shall pay the property taxes and insurance directly to the person owed payment prior to such obligations being due and shall provide proof of such payment to Beneficiary. In the event Trustor fails to pay the property taxes or insurance, Beneficiary, at Beneficiary's option, may pay for such items and such amounts shall be immediately due to Beneficiary from Trustor, together with interest thereon, at the rate of sixteen percent (16 %) per annum. 4. APPLICATION OF PAYMENTS. All payments received by Beneficiary under Paragraphs 1 and 2 shall be applied: First to any amounts payable under paragraph 2; second to interest due, third to principal due, and last to any late charges due under the Note. 5. REPAIRS Trustor shall promptly repair, maintain and replace the Trust Estate or any part thereof so that, except for ordinary wear and tear, the Trust Estate shall not deteriorate. In no event shall Trustor commit waste on or to the Trust Estate. Trustor shall pay when due all claims for labor performed on or materials furnished to the Trust Estate, and shall comply with all laws affecting the property or requiring any alterations or improvements to be made thereon. 6. ACTIONS AFFECTING TRUST ESTATE. Trustor shall appear in and contest any action or proceeding purporting to affect the security thereof or the rights or powers of Beneficiary or Trustee, and shall pay all costs and expenses, including cost of evidence of title and attorney's fees, in any such action or proceeding in which Beneficiary or Trustee may appear. Should Trustor fail to make any payment or to do any act as and in the manner provided in any of the Loan Documents, Beneficiary and/or Trustee, each in its won discretion, without obligation so to do and without notice to or demand upon Trustor and without releasing Trustor from any obligation, may make or do the same in such manner and to such extent as either may deem necessary to protect the security hereof. Trustor shall, immediately upon demand therefor by Beneficiary, pay all costs and expenses incurred by Beneficiary in connection with the exercise by Beneficiary of the foregoing rights, including without limitation costs of evidence to title, court costs, appraisals, surveys, and attorney's fees. Any such costs and expenses not paid within ten (10) days of written demand shall draw interest at the default rate provided in the Note. 7. EMINENT DOMAIN. Should the Trust Estate, or any part thereof or interest therein, be taken or damaged by reason of any public improvement or condemnation proceeding, or in any other manner including deed in lieu of Condemnation ( "Condemnation "), or should Trustor receive any notice or other information regarding such proceeding, Trustor shall give prompt written notice thereof to Beneficiary. Beneficiary shall be entitled to all compensation, awards and other payment or relief therefor, and shall be entitled at its option to commence, appear in and prosecute in its own name any action or proceeding. Beneficiary shall also be entitled to make any compromise or settlement in connection with such taking or damage. All such compensation, awards, damages, rights of action and proceeds awarded to Trustor (the "Proceeds ") are hereby assigned to Beneficiary and Trustor agrees to execute such further assignments of the Proceeds as Beneficiary or Trustee may require. 8. APPOINTMENT OF SUCCESSOR TRUSTEE. Beneficiary may, from time to time, substitute, in the manner prescribed by law, a successor or successors to the Trustee name herein or acting hereunder. The successor Trustee shall succeed to all the predecessor's title, rights, powers and duties without conveyance from the predecessor trustee. 9. SUCCESSORS AND ASSIGNS. This Deed of Trust applies to, inures to the benefit of and binds all parties hereto, their heirs, legatees, devisees, personal representatives, successors and assigns. The term `Beneficiary" shall mean the owner and holder of the Note, whether or not named as Beneficiary herein. 10. INSPECTIONS. Beneficiary, or its agents, representatives or workmen, are authorized to enter at any reasonable time upon or in any part to the Trust Estate for the purpose of inspecting the same and for the purpose of performing any of the acts it is authorized to perform under the terms of any of the Loan Documents. 11. CONSTRUCTION LOAN PROVISIONS. Trustor agrees to comply with the covenants and conditions of the Building Loan Agreement or Construction Loan Agreement ( "Agreement "), if any, which is hereby incorporated by reference in and made a part of this Instrument. All advances made by Beneficiary pursuant to the Agreement shall be indebtedness of Trustor secured by this Instrument, and such advances may be obligatory as provided in the Agreement. All sums disbursed by Beneficiary prior to completion of the improvements to protect the security of this Instrument up to the principal amount of the Note shall be treated as disbursements pursuant to the Agreement. All such sums shall bear interest in accordance with the provisions of the Note and the Agreement. From time to time as Beneficiary deems necessary to protect Beneficiary's interests, Trustor shall, upon request of Beneficiary, execute and deliver to Trustor, in such form as Trustor shall direct, assignments of any and all rights or claims which relate to the construction of the Property and which Trustor may have against any party supplying or who has supplied labor, materials or services in connection with construction of the Property. In case of breach by Trustor of the covenants and conditions of the Agreement, Beneficiary, at Beneficiary's option, with or without entry upon the Property, (a) may invoke any of the rights or remedies provided in the Agreement, (b) may accelerate the sums secured by this Instrument and invoke those remedies provided herein; or (c) my do both. 12. SECURITY AGREEMENT. The Trustor also irrevocably grants, bargains, conveys, assigns, transfers and sets over to Beneficiary a security interest in all of the machines, apparatus, equipment, furniture, chattels, building materials, appliances, construction contracts, plans and specifications, surveys, drawings, fixtures, and any other articles of personal property used in the construction of improvements upon the above described real property, used on or installed by for Trustor on the Property or on any improvements thereon. Any such articles of personal property which are not deemed to be real property shall be subject to the Uniform Commercial Code as enacted in the state where the Property is located, and the Deed of Trust shall constitute a security agreement with respect thereto. This grant of security interest in the afore - described items of personal property and fixtures is for the purpose of securing performance of all of Trustor's obligations under the Loan Documents. Trustor shall execute a financing statement and such other documents as Beneficiary may reasonable request sufficient in form for filing in accordance with the Uniform Commercial Code. With respect to such security interest, Beneficiary may exercise all rights granted or to be granted a secured party under the Uniform Commercial Code as enacted in the state where the Property is located and