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DEED OF TRUST 20001 i i68
<br />(Continued) Page 2
<br />Compliance with Governmental Requirements. Trustor shall promptly comply with all laws, ordinances, and regulations, now or hereafter
<br />in effect, of all governmental authorities applicable to the use or occupancy of the Property. Trustor may contest in good faith any such law,
<br />ordinance, or regulation and withhold compliance during any proceeding, including appropriate appeals, so long as Trustor has notified
<br />Lender in writing prior to doing so and so long as, in Lender's sole opinion, Lender's interests in the Property are not Jeopardized. Lender
<br />may require Trustor to post adequate security or a surety bond, reasonably satisfactory to Lender, to protect Lender's interest.
<br />Duty to Protect. Trustor agrees neither to abandon nor leave unattended the Property. Trustor shall do all other acts, in addition to those
<br />acts set forth above in this section, which from the character and use of the Property are reasonably necessary to protect and preserve the
<br />Property.
<br />TAXES AND LIENS. The following provisions relating to the taxes and liens on the Property are 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
<br />referred 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 Ilen 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
<br />sale under the lien. In any contest, Trustor shall defend itself and Lender and shall satisfy any adverse judgment before enforcement against
<br />the 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
<br />any 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
<br />will 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
<br />a fair value basis for the full insurable value covering all Improvements on the Real Property in an amount sufficient to avoid application of
<br />any coinsurance clause, and with a standard mortgagee clause in favor of Lender, together with such other hazard and liability insurance as
<br />Lender may reasonably require. Policies shall be written in form, amounts, coverages and basis reasonably acceptable to Lender and issued
<br />by a company or companies reasonably acceptable to Lender. Trustor, upon request of Lender, will deliver to Lender from time to time the
<br />policies or certificates of insurance in form satisfactory to Lender, including stipulations that coverages will not be cancelled or diminished
<br />without at least thirty (30) days prior written notice to Lender. Each insurance policy also shall include an endorsement providing that
<br />coverage in favor of Lender will not be impaired in any way by any act, omission or default of Trustor or any other person. Should the Real
<br />Property be located in an area designated by the Director of the Federal Emergency Management Agency as a special Hood hazard area,
<br />Trustor agrees to obtain and maintain Federal Flood Insurance, if available, within 45 days after notice is given by Lender that the Property is
<br />located in a special Hood hazard area, for the full unpaid principal balance of the loan and any prior liens on the property securing the loan,
<br />up to the maximum policy limits set under the National Flood Insurance Program, or as otherwise required by Lender, and to maintain such
<br />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
<br />Trustor fails to do so within fifteen (15) days of the casualty. Whether or not Lender's security is impaired, Lender may, at Lender's election,
<br />receive and retain the proceeds of any insurance and apply the proceeds to the reduction of the Indebtedness, payment of any lien affecting
<br />the Property, or the restoration and repair of the Property. If Lender elects to apply the proceeds to restoration and repair, Trustor shall
<br />repair or replace the damaged or destroyed Improvements in a manner satisfactory to Lender. Lender shall, upon satisfactory proof of such
<br />expenditure, pay or reimburse Trustor from the proceeds for the reasonable cost of repair or restoration if Trustor is not in default under this
<br />Deed of Trust. Any proceeds which have not been disbursed within 180 days after their receipt and which Lender has not committed to the
<br />repair or restoration of 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 any proceeds after payment
<br />in full of the Indebtedness, such 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
<br />this 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
<br />Property.
<br />Compliance with Existing Indebtedness. During the period in which any Existing Indebtedness described below is in effect, compliance
<br />with the insurance provisions contained in the instrument evidencing such Existing Indebtedness shall constitute compliance with the
<br />insurance provisions under this Deed of Trust, to the extent compliance with the terms of this Deed of Trust would constitute a duplication of
<br />insurance requirement. If any proceeds from the insurance become payable on loss, the provisions in this Deed of Trust for division of
<br />proceeds shall apply only to that portion of the proceeds not payable to the holder of the Existing Indebtedness.
<br />LENDER'S EXPENDITURES. If Trustor fails (A) to keep the Property free of all taxes, liens, security interests, encumbrances, and other claims,
<br />(B) to provide any required insurance on the Property, (C) to make repairs to the Property or to comply with any obligation to maintain Existing
<br />Indebtedness in good standing as required below, then Lender may do so. If any action or proceeding is commenced that would materially affect
<br />Lender's interests in the Property, then Lender on Trustor's behalf may, but is not required to, take any action that Lender believes to be
<br />appropriate to protect Lender's interests. All expenses incurred or paid by Lender for such purposes will then bear interest at the rate charged
<br />under the Note from the date incurred or paid by Lender to the date of repayment by Trustor. All such expenses will become a part of the
<br />Indebtedness and, at Lender's option, will (A) be payable on demand; (B) be added to the balance of the Note and be apportioned among and
<br />be payable with any installment payments to become due during either (1) the term of any applicable insurance policy; or (2) the remaining
<br />term of the Note; or (C) be treated as a balloon payment which will be due and payable at the Note's maturity. The Deed of Trust also will
<br />secure payment of these amounts. The rights provided for in this paragraph shall be in addition to any other rights or any remedies to which
<br />Lender may be entitled on account of any default. Any such action by Lender shall not be construed as curing the default so as to bar Lender
<br />from any remedy that 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 tifie
<br />insurance policy, title report, or final title opinion issued in favor of, and accepted by, Lender in connection with this Deed of Trust, and (b)
<br />Trustor has the 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
<br />the 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,
<br />but 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
<br />participation. t
<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 />Survival of Promises. All promises, agreements, and statements Trustor has made in this Deed of Trust shall survive the execution and
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