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<br />08.06.2008
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<br />200807161
<br />
<br />File No. 16-471
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<br />Beneficiary toward altering, restoring or rebuilding the Mortgaged Property or such
<br />portion thereof that may have been altered, damaged or destroyed, and (ii) the balance
<br />against sums secured hereby, in such order as Beneficiary may in its absolute discretion
<br />elect. Such damage or destruction shall not affect the lien of this Deed of Trust or the
<br />obligations of Trustor hereunder, and Beneficiary is authorized at Beneficiary's option to
<br />compromise and settle all loss claims on said policies if not adjusted promptly by
<br />Trustor. The application of Insurance Proceeds in the manner set forth above shall be
<br />conditional upon Trustor first depositing with Beneficiary such amount as Beneficiary
<br />may, in its reasonable discretion, determine to be required beyond the Insurance
<br />Proceeds to complete the altering, restoring or rebuilding of the Mortgaged Property, or
<br />such portion thereof as may have been altered, damaged or destroyed ("Additional
<br />Funds"). Disbursement of Insurance Proceeds, together with the Additional Funds, if
<br />any, required to be so deposited by Trustor with Beneficiary shall be in accordance with
<br />Beneficiary's then current construction loan procedures. If, however, an Event of Default
<br />has occurred which was not cured within the applicable cure period, if any, or Trustor
<br />has failed to provide the deposit of the Additional Funds within thirty (30) days following
<br />the date of receipt of the Insurance Proceeds, then the balance of the proceeds, if any,
<br />may be applied at the option of Beneficiary, (i) toward altering, restoring or rebuilding the
<br />Mortgaged Property or such portion thereof that may have been altered, damaged or
<br />destroyed, or (ii) against sums secured hereby in such order as Beneficiary may in its
<br />absolute discretion elect.
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<br />(b) Notwithstanding the application of Insurance Proceeds to the payment of
<br />a portion of the Secured Obligations, any unpaid portion of the Secured Obligations shall
<br />remain in full force and effect, and Trustor shall not be excused in the payment
<br />thereof. If any act or occurrence of any kind or nature on which insurance was not
<br />obtained or obtainable shall result in damage to or loss or destruction of the Mortgaged
<br />Property, Trustor shall give immediate notice thereof to Beneficiary and, unless
<br />otherwise so instructed by Beneficiary, shall promptly, at Trustor's sole cost and
<br />expense, whether or not the Insurance Proceeds are adequate to cover such cost and
<br />expense, restore, repair, replace and rebuild the Mortgaged Property as nearly as
<br />possible to its value, condition and character immediately prior to such damage, loss or
<br />destruction, in accordance with plans and specifications submitted to and approved by
<br />Beneficiary .
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<br />(c) Except as provided below, nothing contained in this Deed of Trust shall
<br />be deemed to excuse Trustor from repairing or maintaining the Mortgaged Property as
<br />provided in Section 1.04 hereof. The application or release by Beneficiary of any
<br />Insurance Proceeds shall not cure or waive any Event of Default or notice of default
<br />under this Deed of Trust or invalidate any act done pursuant to SuCh notice. If
<br />Beneficiary elects not to so apply the Insurance Proceeds to the restoration, rebuilding
<br />or repair of the Mortgaged Property pursuant to Section 1.07(a) hereof, Trustor shall not
<br />be required to restore, rebuild or repair the portion of the Mortgaged Property damaged
<br />or destroyed, and the failure to do so shall not constitute an Event of Default under this
<br />Deed of Trust.
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<br />Section 1.08. Assianment of Policies Upon Foreclosure. In the event of the
<br />foreclosure of this Deed of Trust, or other transfer of title to the Mortgaged Property, or any part
<br />thereof, by nonjudicial foreclosure sale or deed in lieu of foreclosure, the purchaser of the
<br />Mortgaged Property, or such part thereof, shall succeed to all of Trustor's rights, including any
<br />rights to unexpired insurance and unearned or returnable premiums, in and to all insurance
<br />policies required by Section 1.05, subject to limitations on assignment of blanket policies, and
<br />limited to such rights as relate to the Mortgaged Property or such part thereof. If Beneficiary
<br />acquires title to the Mortgaged Property, or any part thereof, in any manner, it shall thereupon
<br />(as between Trustor and Beneficiary) become the sole and absolute owner of the insurance
<br />policies, and all proceeds payable thereunder with respect to the Mortgaged Property, or such
<br />part thereof, required by Section 1.05, with the sole right to collect and retain all unearned ~r
<br />returnable premiums thereon with respect to the Mortgaged Property, or such part thereof, If
<br />any.
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<br />Section 1.09. Indemnification: Subroaation: Waiver of Offset.
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<br />(a) If Beneficiary is made a party defendant to any litigation concerning this
<br />Deed of Trust or the Mortgaged Property, or any part thereof or interest therein, or the
<br />occupancy thereof by Trustor, then Trustor shall indemnify and hold Beneficiary
<br />harmless from all liability by reason of such litigation, including all attorneys' f~~s ~nd
<br />expenses incurred by Beneficiary in any such litigation, whether or not any such litigation
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<br />Deed of Trust, Security Agreement and Assignment of Rents, Page 6
<br />#553480-v1
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