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DEED OF TRUST Loan No: 771781 (Continued) 200301550 Page 3 liens on the property securing the loan, up to the maximum policy limits set under the National Rood Insurance Program, or as otherwise required by Lander, and to maintain such insurance for the term of the loan. Application of Proceeds. Truster shall promptly notify Lentler of any loss or damage to the Property. Lender may make proof of loss If Truster fails to do so within fifteen (16) days of the casualty. Whether or not Lender's security is impaired, Lender may, at Lender's election, receive and retain the proceeds of any insurance and apply the proceeds to the reduction of the Indebtedness, payment of any lien affecting the Property, or the restoration and repair of the Property. If Lender elects to apply the proceeds to restoration and repair, Truster shell repair or replace the damaged or destroyed Improvements in a manner satisfactory to Lender. Lender shall, upon satisfactory proof of such expenditure, pay or reimburse Truster from the proceeds for the reasonable coal of repair or restoration if Trustor is not in default under this Dead of Trust. Any proceeds which have not been disbursed within 180 days after their receipt and which Lender has not committed to the 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 interest, and the remainder, if any, shell be applied to the principal balance of the Indebtedness. If Lender holds any proceeds after payment in full of the Indebtedness, such proceeds shall be paid to Trustor as Truslor's interests may appear. Unexpired Insurance at Sale. Any unexpired insurance shall inure to the benefit of, and pass to, the purchaser of the Property covered by this Dead of Trust at any trustee's sale or other wile held under the provisions of this Dead of Trust, or at any foreclosure sale of such Property. LENDER'S EXPENDITURES. If Trustor fails (A) to keep the Property free of all taxes, lions, security Interests, encumbrances, and other claims, (B) to provide any required insurance on the Property, or (C) to make repairs to the Property then Lender may do so. If any acted or proceeding is commenced that would materially affect Lenders interests in the Property, than Lender on Trustor's behalf may, but is not required lo, take any action that Lender believes to be appropriate to protect Lender's interests. All expenses incurred or paid by Lender for such purposes will then bear interest at the rate charged under the Note from the date incurred or paid by Lender to the date of repayment by Trustor. All such expenses will became a pad of the Indebtedness and, at Lenders option, will (A) be payable on demand; (B) be added to the balance of the Note and be apportioned among and be payable with any installment payments to become due during either (1) the term of any applicable insurance policy; or (2) the remaining 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 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 Lentler 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 from any remedy that it otherwise would have had. WARRANTY; DEFENSE OF TITLE. The following provisions relating to ownership of the Property are a part of this Dead of Trust: Title. Truster warrants that: (a) Truster holds good and marketable title of record to the Property in lee simple, free and clear of all liens and encumbrances other than those set forth in the Real Property description or in any fire Insurance policy, the report, or final title opinion issued In favor of, and accepted by, Lander in connection with this Dead of Trust, and dd Trustor has the full right, power, and authority to execute and deliver this Deed of Trust to Lender. Defense of Title. Subject to the exception in the paragraph above, Trustor warrants and will forever defend the btu to the Property against the lawful claims of all persons. In the event any action or proceeding is commenced that questions Trustca s title or the interest of Trustee or Lender under this Dead of Trust, Trustor shall defend the action at Trustors expense. Trustor may be the nominal party In such proceeding, but Lender shall be entitled to participate in the proceeding and to be reprimanded in the proceeding by counsel of Lender's own choice, and Trustor will deliver, or cause to be delivered, to Lender such Instruments as Lander may request from time to time to permit such participation. Compliance With Lewis. Trustor warrants that the Property and Trustor's use of the Property complies with all existing applicable laws, ordinances, and regulations of governmental authorities. Survlval of Promises. All promises, agreements, and statements Truster has made in this Dead of Trust shall survive the execution and delivery of this Dead of Trust, shall be continuing in nature and shall remain in full force and efleot left such time as Trustor's Indebtedness is paid in full. CONDEMNATION. The following provisions relating to condemnation proceedings are a pad of this Dead of Trust: Proceedings. If any proceeding in condemnation is filed, Trustor shall promptly notify Lender in writing, and Trustor shall promptly take such steps as may be necessary to defend the action and obtain the award. Trustor may be the nominal party in such proceeding, but Lender shall be worked to participate in the proceeding and to be represented in the proceeding by counsel of its own choice, and Trustor will deliver ar cause to be delivered to Lender such Instruments and documentation as may be requested by Lander from time to time to permit such participation. Application of Net Proceeds. If all or any pad of the Properly a condemned by eminent domain proceedings or by any proceeding or purchase in lieu of condemnation, Lender may at its election require that all or any portion of the net proceeds of the award be applied to the Indebtedness or the repair or restoration of the Property. The net proceeds of the award shall mean the award after payment of all reasonable costs, expenses, and aftorneys' fees incurred by Trustee or Lender in connection with the condemnation. IMPOSITION OF TAXES, FEES AND CHARGES BY GOVERNMENTAL AUTHORITIES. The following provisions relating to governmental texas, fees and charges are a pad of this Deed of Trust: Current Taxes, Fees and Charges. Upon request by Lender, Trustor shall execute such documents in addition to this Deed of Trust and Mks whatever other action Is requested by Lender to perfect and continue Lander's lien on the Real Property. Trustor shall reimburse Lender for all taxes, as described below, together with all expenses Incurred In recording, perfecting or continuing this Dead of Trust, including without limitation all taxes, fees, documentary stamps, and other charges for recording or registering this Deed of Trust. Tares. The following shall constitute taxes to which this section applies: (1) a specific tax upon this type of Deed of Trust or upon all or any pad of the Indebtedness secured by this Deed of Trust; (2) a specific tax on Trustor which Trustor is authorized or required to deduct from payments on the Indebtedness secured by this type of Deed of Trust; (3) a tax on this type of Deed of Trust chargeable against the Lander or the holder of the Note; and (4) a specific tax on all or any portion of the Indebtedness or on payments of principal and Interest made by Truster.