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DEED OF TRUST <br />(Continued) Page 3 <br />2®2101472 <br />and repair of the Property. If Lender elects to apply the proceeds to restoration and repair, Trustor shall repair or <br />replace the damaged or destroyed Improvements in a manner satisfactory to Lender. Lender shall, upon <br />satisfactory proof of such expenditure, pay or reimburse Trustor from the proceeds for the reasonable cost of <br />repair or restoration if Trustor is not in default under this Deed of Trust. Any proceeds which have not been <br />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 <br />interest, and the remainder, if any, shall be applied to the principal balance of the Indebtedness. If Lender holds <br />any proceeds after payment in full of the Indebtedness, such proceeds shall be paid to Trustor as Trustor's <br />interests may appear. <br />Trustor's Report on Insurance. Upon request of Lender, however not more than once a year, Trustor shall furnish <br />to Lender a report on each existing policy of insurance showing: (1) the name of the insurer; (2) the risks <br />insured; (3) the amount of the policy; (4) the property insured, the then current replacement value of such <br />property, and the manner of determining that value; and (5) the expiration date of the policy. Trustor shall, upon <br />request of Lender, have an independent appraiser satisfactory to Lender determine the cash value replacement cost <br />of the Property. <br />LENDER'S EXPENDITURES. If any action or proceeding is commenced that would materially affect Lender's interest in <br />the Property or if Trustor fails to comply with any provision of this Deed of Trust or any Related Documents, including <br />but not limited to Trustor's failure to discharge or pay when due any amounts Trustor is required to discharge or pay <br />under this Deed of Trust or any Related Documents, Lender on Trustor's behalf may (but shall not be obligated to) take <br />any action that Lender deems appropriate, including but not limited to discharging or paying all taxes, liens, security <br />interests, encumbrances and other claims, at any time levied or placed on the Property and paying all costs for insuring, <br />maintaining and preserving the Property. All such expenditures incurred or paid by Lender for such purposes will then <br />bear interest at the rate charged under the Note from the date incurred or paid by Lender to the date of repayment by <br />Trustor. All such expenses will become a part of the Indebtedness and, at Lender's option, will (A) be payable on <br />demand; (B) be added to the balance of the Note and be apportioned among and be payable with any installment <br />payments to become due during either (1) the term of any applicable insurance policy; or (2) the remaining term of <br />the Note; or (C) be treated as a balloon payment which will be due and payable at the Note's maturity. The Deed of <br />Trust also will secure payment of these amounts. Such right shall be in addition to all other rights and remedies to <br />which Lender may be entitled upon the occurrence of any Event of Default. <br />WARRANTY; DEFENSE OF TITLE. The following provisions relating to ownership of the Property are a part of this Deed <br />of Trust: <br />Title. Trustor warrants that: (a) Trustor holds good and marketable title of record to the Property In fee simple, <br />free and clear of all liens and encumbrances other than those set forth in the Real Property description or in any <br />title insurance policy, title report, or final title opinion issued in favor of, and accepted by, Lender In connection <br />with this Deed of Trust, and (b) Trustor has the full right, power, and authority to execute and deliver this Deed of <br />Trust to Lender. <br />Defense of Title. Subject to the exception in the paragraph above, Trustor warrants and will forever defend the <br />title to the Property against the lawful claims of all persons. In the event any action or proceeding is commenced <br />that questions Trustor's title or the interest of Trustee or Lender under this Deed of Trust, Trustor shall defend the <br />action at Trustor's expense. Trustor may be the nominal party In such proceeding, but Lender shall be entitled to <br />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 <br />to permit such participation. <br />Compliance With Laws. Trustor warrants that the Property and Trustor's use of the Property complies with all <br />existing applicable laws, ordinances, and regulations of governmental authorities. <br />Survival of Representations and Warranties. All representations, warranties, and agreements made by Trustor in <br />this Deed of Trust shall survive the execution and delivery of this Deed of Trust, shall be continuing in nature, and <br />shall remain in full force and effect until such time as Trustor's Indebtedness shall be paid in full. <br />CONDEMNATION. The following provisions relating to condemnation proceedings are a part of this Deed of Trust: <br />Proceedings. If any proceeding in condemnation is filed, Trustor shall promptly notify Lender in writing, and <br />Trustor shall promptly take such steps as may be necessary to defend the action and obtain the award. Trustor <br />may be the nominal party in such proceeding, but Lender shall be entitled to participate in the proceeding and to be <br />represented in the proceeding by counsel of its own choice, and Trustor will deliver or cause to be delivered to <br />Lender such instruments and documentation as may be requested by Lender from time to time to permit such <br />participation. <br />Application of Net Proceeds. If all or any part of the Property is condemned by eminent domain proceedings or by <br />any proceeding or purchase in lieu of condemnation, Lender may at its election require that all or any portion of the <br />net proceeds of the award be applied to the Indebtedness or the repair or restoration of the Property. The net <br />proceeds of the award shall mean the award after payment of all reasonable costs, expenses, and attorneys' fees <br />incurred by Trustee or Lender in connection with the condemnation. <br />IMPOSITION OF TAXES, FEES AND CHARGES BY GOVERNMENTAL AUTHORITIES. The following provisions relating <br />to governmental taxes, fees and charges are a part of this Deed of Trust: <br />Current Taxes, Fees and Charges. Upon request by Lender, Trustor shall execute such documents in addition to <br />this Deed of Trust and take whatever other action is requested by Lender to perfect and continue Lender's lien on <br />the Real Property. Trustor shall reimburse Lender for all taxes, as described below, together with all expenses <br />incurred in recording, perfecting or continuing this Deed of Trust, including without limitation all taxes, fees, <br />documentary stamps, and other charges for recording or registering this Deed of Trust. <br />Taxes. The following shall constitute taxes to which this section applies: (1) a specific tax upon this type of <br />Deed of Trust or upon all or any part of the Indebtedness secured by this Deed of Trust; (2) a specific tax on <br />Trustor which Trustor is authorized or required to deduct from payments on the Indebtedness secured by this type <br />of Deed of Trust; (3) a tax on this type of Deed of Trust chargeable against the Lender or the holder of the Note; <br />and (4) a specific tax on all or any portion of the Indebtedness or on payments of principal and interest made by <br />Trustor. <br />Subsequent Taxes. If any tax to which this section applies is enacted subsequent to the date of this Deed of <br />Trust, this event shall have the same effect as an Event of Default, and Lender may exercise any or all of its <br />available remedies for an Event of Default as provided below unless Trustor either (1) pays the tax before it <br />becomes delinquent, or (2) contests the tax as provided above in the Taxes and Liens section and deposits with <br />Lender cash or a sufficient corporate surety bond or other security satisfactory to Lender. <br />SECURITY AGREEMENT; FINANCING STATEMENTS. The following provisions relating to this Deed of Trust as a <br />security agreement are a part of this Deed of Trust: <br />Security Agreement. This instrument shall constitute a Security Agreement to the extent any of the Property <br />constitutes fixtures, and Lender shall have all of the rights of a secured party under the Uniform Commercial Code <br />as amended from time to time. <br />