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3. Maintenance of the Security. 200702204 3.1 Trustor shall keep the security in good condition and repair, shall not commit or suffer waste, shall not do or allow anything to be done which will increase the risk of fire or other casualty to the premises or diminish the value of the security except reasonable wear and tear, and shall not alter the design or structural character of any building or add any building within the security without the written consent of Beneficiary. 3.2 If the security or any part thereof is damaged by fire or other cause including condemnation, Trustor shall give immediate written notice of the event to Beneficiary. Trustor shall use any proceeds of compensation for the damage from insurance, condemnation award or otherwise to restore or replace the proceeds to Beneficiary at the option of Beneficiary. If part of the security is damaged, Trustor shall restore, repair, or alter the remaining property in a manner satisfactory to Beneficiary. 3.3 Beneficiary or its representative is hereby authorized to make or cause to be made reasonable entries upon and inspections of the premises. 3.4 Trustor shall promptly comply with all present and future laws, ordinances, rules and regulations of any governmental authority affecting the premises or any part thereof. This shall apply to any construction upon the premises as well as the operation of any business upon the premises. 4. Insurance. 4.1 Trustor shall keep the security insured against: (1) loss by perils covered by standard fire policy with standard extended coverage endorsement, in an amount equal to 100% of the full replacement value ofthe security without deduction for depreciation, if any improvements are present; (2) liability insurance for the benefit of Beneficiary and Trustee to protect Beneficiary and Trustee from any and all claims of personal injury or property damage arising from or out of the premises; and (3) other insurance normal and customary for owners and operators of similar property. Further, Beneficiary may require any other reasonable insurance to protect the security. All insurance shall be paid for by Trustor, shall be in form and by company approved by Beneficiary, shall insure Beneficiary, Trustee and Trustor as their interests appear, and shall provide that the insurance company shall notify Beneficiary in writing at least thirty (30) days before any cancellation or termination becomes effective as to Beneficiary. 4.2 Trustor shall provide Beneficiary proof of the insurance required by this Agreement at least fifteen (15) days before advancement of funds under the Promissory Note. Trustor shall provide proof of renewal policies at least fifteen (15) days before expiration of any policy. If Trustor fails to provide insurance, Beneficiary may declare the loan and Deed of Trust in default. Beneficiary may purchase such insurance as necessary to protect the security. The cost of the insurance so purchased with interest shall be deemed an advancement to protect the security. LQ730681.3 -3-