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200107752 2. Payment of Indebtedness. Trustor shall promptly pay or cause to be paid when due the Obligations and all other indebtedness. The Trustor shall also promptly and faithfully observe all of its obligations under any other deed of trust encumbering all or part of the Trust Property and, if applicable, any promissory note, guaranty, or other term of contractual indebtedness secured by such other deed of trust, whether junior or senior to the lien of this Deed of Trust, and any other obligations secured by a lien on the Trust Property, whether arising consensually or by operation of law. 3. Construction of Improvements. Trustor shall complete in good and workmanlike manner any buildings, improvements or repairs relating thereto which may be begun on the Trust Property or contemplated by the Obligations secured hereby, to pay when due all costs and liabilities incurred therefor, and not to permit any construction lien against such Trust Property. In the event construction of buildings, improvements or repairs are contemplated, Trustor also agrees, anything in this Deed of Trust to the contrary notwithstanding, (a) to promptly commence any such work and to complete the proposed improvements promptly, (b) to complete the same in accordance with the plans and specifications as approved by Beneficiary, (c) to comply with all the terms of a building loan agreement, if any, between Trustor and Beneficiary, the terms of which are incorporated herein by reference and made a part hereof, (d) to allow Beneficiary to inspect the Trust Property at all times during construction, and (e) to replace any work or materials unsatisfactory to Beneficiary within fifteen (15) days after written notice from Beneficiary of such fact. 4. Funds for Payment of Charges. if requested at any time or from time to time by the Beneficiary, Trustor shall pay to Beneficiary on the first day of each month, or such other date each month as may be specified by Beneficiary, until the Obligations are paid in full, a sum (hereinafter the "Funds ") equal to 1 112th of the yearly taxes and assessments which may attain priority over this Deed of Trust and ground rents on the Trust Property, if any, plus 1 112th of the yearly premium installments for hazard insurance, plus 1 112th of the yearly premium installments for mortgage insurance, if any, all as reasonably estimated initially and from time to time by Beneficiary on the basis of assessments and bills and reasonable estimates thereof. The Funds shall be held in an institution, the deposits or accounts of which are insured or guaranteed by a federal or state agency including Beneficiary. Beneficiary shall apply the Funds to pay said taxes, assessments, insurance premiums and ground rents. Beneficiary shall not be required to pay Trustor any interest or earnings on the Funds. Beneficiary shall give to Trustor, without charge, an annual accounting of the Funds showing credits and debits to the Funds and the purpose for which each debit to the Funds was made. The Funds are pledged as additional security for the Obligations secured by this Deed of Trust. if the amount of the Funds held by Beneficiary, together with the future monthly installments of Funds payable prior to the due dates of taxes, assessments, insurance premiums and ground rents, shall exceed the amount required to pay said taxes, assessments, insurance premiums and ground rents as they fall due, such excess shall be, at Trustor's option, either promptly repaid to Trustor or credited to Trustor against future monthly installments of Funds. If the amount of the Funds held by Beneficiary shall not be sufficient to pay taxes, assessments, insurance premiums and ground rents as they fall due, Trustor shall pay to Beneficiary any amount necessary to make up the deficiency within thirty days from the date notice is mailed by Beneficiary to Trustor requesting payment thereof. Upon payment in full of all Obligations, Beneficiary shall promptly refund to Trustor any Funds held by Beneficiary. if the Trust Property is sold under the power of sale or the Trust Property is otherwise acquired by Beneficiary, Beneficiary shall apply, immediately prior to the sale of the Trust Property or its acquisition by Beneficiary, any Funds held by Beneficiary at the time of application as a credit against the Obligations. If Beneficiary executes a written waiver of Trustor's obligations under this Section, Trustor covenants and agrees to pay, before the same become delinquent, all taxes, assessments, insurance premiums, ground rents, and all other charges whatsoever levied upon or assessed, placed or made against the Trust Property. Trustor further agrees, upon written request by Beneficiary, to promptly deliver to Beneficiary all receipts for the payment of such charges. Trustor likewise agrees to pay all taxes, assessments and other charges levied upon or assessed, placed or made against, or measured by, this Deed of Trust or the recordation hereof. 5. Application of Payments. All payments received by Beneficiary as to any debt, liability or obligation owed to Beneficiary by Trustor may be applied by Beneficiary to the payment of the Obligations in any order or manner of application which Beneficiary, in its absolute discretion, deems appropriate. 6. Charges; Liens. Trustor will keep the Trust Property free from all liens and encumbrances, whether prior or subordinate to this Deed of Trust, other than the lien of current real estate taxes and installments of official assessments with respect to which no penalty is yet payable; provided, however, that Trustor need not discharge any such lien so long as Trustor shall agree, in writing, to pay the obligation secured by such lien in a manner acceptable to Beneficiary and shall in good faith contest such lien by appropriate legal proceedings effective to prevent the enforcement of the lien or the loss of any interest in or part of the Trust Property, and shall also give such reasonable security to Beneficiary as may be demanded by Beneficiary to insure compliance therewith. The Beneficiary may in its sole discretion defend the lien of this Deed of Trust and all costs and attorneys' fees incurred by Beneficiary in said defense shall be reimbursed by Trustor or added to the Obligations. 7. Hazard Insurance. Trustor shall keep the buildings and other improvements now existing or hereafter erected on the Trust Property insured by insurance carriers satisfactory to Beneficiary against loss by fire, hazards included in the term "extended coverage" and such other hazards, casualties and contingencies, including war damage insurance, as may be required by Beneficiary, in such amounts and for such periods as may be required by Beneficiary. The policy of insurance shall be in form acceptable to Beneficiary and shall not contain a defense based on coinsurance, and shall contain the standard provision that no act of the Beneficiary or of the Beneficiary's agents or representatives will render the policy void as to the Beneficiary or affect the Beneficiary's right to- recover incase of loss, and the policy or policies shall provide that the same may not be canceled or modified without fifteen (15) days prior written notice to Beneficiary, and have loss payable provisions in favor of and in form acceptable to Beneficiary. All premiums on insurance policies shall be paid in the manner provided under the Section entitled "Funds for Payment of Charges" herein or, if not paid in such manner, by Trustor making payment at least fifteen (15) days prior to the due date, directly to the insurance carrier. Beneficiary shall have the right to hold the policies and renewals thereof and Trustor shall promptly furnish to Beneficiary all renewal notices and all paid premium receipts received by it. In no event shall Beneficiary or Trustee be held responsible for failure to pay insurance premiums or for any loss or damage arising out of a 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 failure by Trustor to effect the insurance required hereunder. In the event of loss, Trustor shall give prompt notice by mail to the insurance carrier and Beneficiary. Beneficiary may make proof of loss if not made promptly or in proper form by Trustor. A# policies of insurance and any and a# refunds of unearned premiums are hereby assigned to Beneficiary as additional security for the payment of the Obligations. In the event of Beneficiary's exercise of the power of sale contained herein, or in the event of foreclosure, all right, title and interest of Trustor in and to any insurance policy then in force shat/ pass to the purchaser at the trustee's sale or foreclosure sale. In case of any loss, the insurance proceeds may, at the option of Beneficiary, be applied by Beneficiary upon the Obligations, or any part thereof, and in such order and amount as Beneficiary may determine, or said insurance proceeds, at the option of Beneficiary, may either be used in replacing or restoring the Trust Property partially or totally destroyed to a condition satisfactory to Beneficiary; or said insurance proceeds, or any portion thereof, may be released to Trustor. Unless Beneficiary and Trustor otherwise agree in writing, any such application of insurance proceeds shall not extend or postpone the due date of any note or agreement evidencing the Obligations, or any installments called for therein, or change the amount of such installments. if the Trust Property is acquired by Beneficiary pursuant to the exercise of the power of sale or other foreclosure, all right, title 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 acquisition shall pass to Beneficiary and shall be applied first to the costs and expenses, including attorneys' fees, incurred in collecting such proceeds, then in the manner and in the order provided herein. Notwithstanding anything contained in this Section to the contrary, if this Deed of Trust is on a condominium or a town house and there is a master insurance policy in force covering the common areas and facilities and all condominiums and town houses located in that development, then, unless otherwise notified in writing by the Beneficiary, the Trustor shall have no obligation to maintain the insurance required hereunder, and will assign all benefits and proceeds received thereon to the Beneficiary and, in the Beneficiary's sole discretion, name the Beneficiary as the named insured on said policy. Whenever such insurance is in force (regardless of whether requested by the Beneficiary or not) the Trustor hereby authorizes the Beneficiary to cancel such insurance whenever the Beneficiary determines that such insurance does not adequately protect the Beneficiary's interest. 8. Preservation and Maintenance of Trust Property. Trustor will keep the buildings and other improvements now or hereafter erected on the Trust Property in good repair and condition, ordinary depreciation excepted, and shall provide all utility services necessary for the operation and preservation of the Trust Property. Trustor will not commit or permit waste, will not alter the design or structural character constituting any building now or hereafter erected on and constituting the Trust Property without the prior written consent of Beneficiary, will not do any act or thing which would unduly impair or depreciate the value of the Trust Property and will not abandon the Trust Property. Trustor will not remove any fixtures constituting the Trust Property unless the same are immediately replaced with like property subject to the lien and security interest of this Deed of Trust and of at least equal value and utility. Trustor will comply with all present and future ordinances, regulations and requirements of any governmental body which are applicable to the Trust Property and to the occupancy and use thereof if this Deed of Trust is on a unit in a condominium or a planned unit development, Trustor shall perform all of Trustor's obligations under the declarations or covenants creating or governing the condominium or the planned unit development, the bylaws and regulations of the condominium or planned unit development, and the constituent documents. 9. Inspection. Beneficiary or its agents may, at all reasonable times, enter upon the Trust Property for the purpose of inspection including, but not limited to environmental testing. Beneficiary shall have no duty to make such inspection and shall not be liable to Trustor or to any person in possession if it makes or fails to make any such inspection. 10. Protection of Security. if Trustor fails to perform any of the covenants and agreements contained in this Deed of Trust, or if any action or proceeding is commenced which does or may adversely affect the Trust Property or the interest of Trustor or Beneficiary therein or the title of Trustor thereto, then Beneficiary, at its option, may perform such covenants and agreements, make such appearances, defend against and /or investigate such action or proceeding and take such other action as Beneficiary deems necessary to protect its interest including, but not limited to, disbursement of reasonable attorneys' fees and entry upon the Trust Property to make repairs. Any amounts disbursed or incurred by Beneficiary pursuant to this Section, including, but not limited to, reasonable attorneys' fees, with interest thereon, shall constitute additional Obligations secured by this Deed of Trust. Beneficiary is hereby given an irrevocable power of attorney (which power is coupled with an interest for purposes of security) to enter upon the Trust Property as the Trustor's agent and in the Trustor's name to perform any and all covenants and agreements to be performed by the Trustor as herein provided. Unless Trustor and Beneficiary agree to other terms of payment, such amounts shall be payable upon notice from Beneficiary to Trustor requesting payment thereof, and shall bear interest from the date of disbursement or the date incurred at the rate set forth in the Note or the rate provided in the most recent obligation covered by the Guaranty, unless payment of interest at such rate would be contrary to applicable law, in which event such amounts shag bear interest at the highest rate permitted by applicable law. Nothing contained in this paragraph shall require Beneficiary to incur any expense or take any action hereunder. Beneficiary shall, at its option, be subrogated to any encumbrance, lien, claim or demand and to all rights and securities for the payment thereof paid or discharged by Beneficiary under the provisions hereof and any such subrogation rights