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200112868
<br />expense, such other insurance as Lender may require in an amount satisfactory to Lender. All premiums
<br />on insurance policies shall be paid by Trustor making payment when due directly to the carrier.
<br />All insurance policies and renewals thereof shall be in a form acceptable to Lender and shall
<br />include a standard mortgagee loss payable clause in favor of and in form acceptable to Lender. Lender
<br />shall have the right to hold the policies, and Trustor shall promptly furnish to Lender all renewal notices
<br />and all receipts of paid premiums. At least thirty days prior to the expiration date of a policy, Trustor
<br />shall deliver to Lender a renewal policy in form satisfactory to Lender.
<br />In the event of any loss in excess of $100,000.00 covered by any insurance policies, Trustor shall
<br />give immediate written notice to the insurance carrier and to Lender, and with respect to such loss, Lender
<br />is hereby authorized and empowered (at Lender's option) to make proof of loss, to adjust and compromise
<br />any claim under insurance policies, to appear in and prosecute any action arising from such insurance
<br />policies, to collect and receive insurance proceeds, and to deduct therefrom Lender's expenses incurred in
<br />the collection of such proceeds; provided, however, that nothing contained in this paragraph shall require
<br />Lender to incur any expense or take any action hereunder. All insurance proceeds related to a loss in
<br />excess of $100,000.00 shall be paid by the insurance company to Lender to be held and disbursed in
<br />accordance with this Paragraph 5. Trustor further authorizes Lender, at Lender's option, (a) to hold the
<br />balance of such proceeds to be used to reimburse Trustor for the cost of reconstruction or repair of the
<br />Property, or (b) if the proceeds are insufficient to repair or reconstruct the improvements in the manner
<br />required in the next subparagraph, and if Borrowers are unable or unwilling to personally fund the
<br />shortfall, to apply the balance of such proceeds to the payment of the sums secured by this Instrument,
<br />whether or not then due, in the order of application set forth in paragraph 3 hereof, or (c) if a default
<br />exists under this Instrument or any of the Loan Documents, Lender shall be entitled to retain the proceeds
<br />and apply the same in the order as provided in Paragraph 3.
<br />6. PRESERVATION AND MAINTENANCE OF PROPERTY. Trustor (a) shall not
<br />commit waste or permit any physical deterioration of the Property; (b) shall not abandon the Property; (c)
<br />shall restore or repair promptly and in a good and workmanlike manner all or any part of the Property to
<br />the equivalent of its original condition, or such other condition as Lender may approve in writing, in the
<br />event of any damage, injury or loss thereto, whether or not insurance proceeds are available to cover in
<br />whole or in part the costs of such restoration or repair; (d) shall keep the Property, including
<br />improvements, fixtures, equipment, machinery and appliances therein, in good repair and shall replace
<br />fixtures, equipment, machinery and appliances on the Property when necessary to keep such items in
<br />good repair; (e) shall comply with all laws, ordinances, regulations and requirements of any governmental
<br />body applicable to the Property; (f) if Trustor does not manage the Property itself, Trustor shall provide
<br />for professional management of the Property by a rental property manager satisfactory to Lender pursuant
<br />to a contract approved by Lender in writing, unless such requirement shall be waived by Lender in
<br />writing; (g) shall generally operate and maintain the Property in a manner to maximize rentals and
<br />income; and (h) shall give notice in writing to Lender of and, unless otherwise directed in writing by
<br />Lender, appear in and defend any action or proceeding purporting to affect the Property, the security of
<br />this Instrument or the rights or powers of Lender. Neither Trustor nor any tenant or other person shall
<br />remove, demolish or alter any improvement now existing or hereafter erected on the Property or any
<br />fixture, equipment, machinery or appliance in or on the Property except to remodel, redecorate or other
<br />improvements in the ordinary course of business and when incident to the replacement of fixtures,
<br />equipment, machinery and appliances with items of like kind.
<br />7. USE OF PROPERTY. Unless required by applicable law or unless Lender has
<br />otherwise agreed in writing, Trustor shall not allow changes in the use for which all or any part of the
<br />Property was intended at the time this Instrument was executed. Trustor shall not initiate or acquiesce in
<br />a change in the zoning classification of the Property without Lender's prior written consent. Trustor shall
<br />not violate nor shall Trustor permit or authorize the breach or violation of the terms of any easements,
<br />covenants, or restrictions of record upon or affecting the Property. Trustor will not, except in accordance
<br />with applicable law, conduct, permit, or authorize the generation, storage, treatment, or disposal of any
<br />friable asbestos, hazardous waste, or toxic substance on or in a location that will adversely affect the
<br />Property and shall promptly provide Lender written notice of (a) its obtaining knowledge of any material
<br />release of any hazardous or toxic material or oil at or from the Property or any other site owned, occupied,
<br />or operated by Trustor or by any person for whose conduct Trustor is responsible or whose liability may
<br />result in a lien on the Property; (b) any Borrower's receipt of any notice to such effect from any federal,
<br />state, or other governmental authority; and (c) loss by such governmental authority in connection with the
<br />assessment, containment, or removal of any hazardous or toxic material or oil for which expense or loss
<br />Trustor may be liable or for which expense a lien may be imposed on the Property. "Trustor," as that
<br />term is used herein, includes Trustor's successors, assigns, agents, servants, and members.
<br />8. PROTECTION OF LENDER'S SECURITY. If Trustor fails to perform the covenants
<br />and agreements contained in this Instrument, or if any action or proceeding is commenced which affects
<br />Borrowers ownership of or rights in the Property, or the Property or title thereto or the interest of Lender
<br />therein, including, but not limited to, eminent domain, insolvency, building code enforcement, or
<br />arrangements or proceedings involving a bankruptcy or decedent, then Lender, at Lender's option, may
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