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DEED OF TRUST Loan No: 776666 (Continued) 200301981 Page 3 Maintenance of Insurance. Trustor shall procure and maintain policies of fire Insurance with standard extended coverage endorsements on a fair value basis for the full insurable value covering all Improvements on the Real Property in an amount sufficient to avoid application of any coinsurance clause, and with a standard mortgagee clause in favor of Lender, together wUh such other hazard and liability insurance as Lender may reasonably require. Policies shall be written in form, amounts, coverages and basis reasonably acceptable to Lender and issued by a company or companies reasonably acceptable to Lender. Toaster, upon request of Lender, will deliver to Lander from time to time the policies or certificates of insurance in form satisfactory to Lender, including stipulations that coverages will not be cancelled or diminished without at least ten (10) days prior written notice to Lender. Each insurance policy also shall include an endorsement providing that coverage In favor of Lender will not be impaired in any way by any art, omission or default of Truster or any other person. Should the Real Property be located in an area designated by the Director of the Federal Emergency Management Agency as a special flood hazard area, Trustor agrees to obtain and maintain Federal Flood Insurance. If available, within 45 days after notice is given by Lender that the Property is located in a special flood hazard area, for the full unpaid principal balance of the loan and any prior liens on the property securing the loan, up to the maximum policy limits set Linder the National Flood Insurance Program, or as otherwise required by Lender, and to maintain such insurance for the term of the Application of Proceeds. Truster shall promptly notify Lender of any loss or damage to the Property. Lender may make proof of loss If Truster fails to do so within fifteen 1151 days of the casualty. Whether or not Lenders security is impaired, Lander 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 Lander elects to apply the proceeds to restoration and repair, Truster shall 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 cost of repair or restoration If Trustor is not in default under this Deed 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, shall be replied to the principal balance of the Indebtedness. If Lander holds any proceeds ever payment in full of the Indebtedness, such proceeds shall be paid to Trustor as Truster's interests may appear. LENDER'S EXPENDITURES. If Trustor fails (A) to keep the Property free of all taxes, liens, security Interests, encumbrances, and other claims, (B) to provide any required Insurance on the Property, or ICI to make repairs to the Property then Lender may do so. If any action or proceeding is commenced that would materially affect Lender's interests in the Property, then Lender on Truster 'a behalf may, but is not required to take any action that Lander believes to be appropriate to protect Lender's interests. All expenses incurretl 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 become a pert of the Indebtedness and, at Lender's option, will (A) be payable on demand; (BI be added to The balance of the Note and be apportioned among and be payable with any installment payments to become due during either (11 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 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 from any remedy that it otherwise would have had. WARRANTY; DEFENSE OF TITLE. The followmg provisions relating to ownership of the Property are a part of this Decd of Trust: Title. Trustor warrants Thee (a1 Trustor holds good and marketable title of record to the Property in fee simple, tree and clear of all liens and encumbrances other than those set forth in the Real Property description or in any Title Insurance policy, Title report, or final title opinion issued in favor of, and accepted dy. Lender in connection with this Deed of Trust, and Ibl 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 title to the Property against the lawful claims of all persons. In the event any action or proceeding is ced that questions Tructoi s title or the interest of Trustee or Lander under this Deed of Trust, Trustor shall defend the action at Trustor'a expense. Truster may be the party in such proceeding, but Lander shall be entitled to participate in the proceeding and to be represented in the proceeding by nominal unsel of Lenders own choice, and Trustor will deliver, or cause to be delivered, to Lender such instruments as Lender may request from time to time to permit such participated. Compliance With Laws. Trustor warrants that the Property and Troster'a use of the Property complies with all existing applicable laws, ordinances, and regulations of governmental authorities. Survival of Promises, All promises, agreements, and statements Trustor has made In this Deed of Trust shall survive the execution and delivery of this Deed of Trust, shall be continuing in nature and shall remain in full force and effect until such time es Borrower's Indebtedness Is paid in full. CONDEMNATION. The following provisions relating to condemnation proceedings are a part of this Deed 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 Lander shall be emitted to participate in the proceeding and to be represented in the proceeding by counsel of its awn choice, and Trustor will deliver or cause to be delivered to Lender such instruments and documentation as may be requested by Lender from time to Time to permit such participation. Application of Net Proceeds. If all or any part of Tho Property is 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 m n the award after payment of a reasonable costs, expenses, and attorneys' fees incurred by Trustee or Lender in connection with the contlemnation. IMPOSITION OF TAXES, FEES AND CHARGES BY GOVERNMENTAL AUTHORITIES. The following provisions relating Ta governmental Taxes, fees and charges are a part of this Deed of Trust: