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DEED OF TRUST � p�,10 "7 4 4 G
<br />Loan No: 1 (Continued) Page 4
<br />TAX AND INSURANCE RESERVES. Subject to any limitations and consistent with any requirements set by applicable
<br />law, Lender may require Trustor to maintain with Lender reserves for payment of annual taxes, assessments, and
<br />insurance premiums, which reserves shall be created by an initial deposit and subsequent monthly payments, or
<br />payments at such other interval as payments under the Note may be due, of a sum estimated by Lender to be sufficient
<br />to pay the total annual taxes, assessments, and insurance premiums Lender reasonably anticipates to be paid from
<br />these reserves. The reserve funds shall be held by Lender as a general deposit from Trustor, which Lender may satisfy
<br />by payment of the taxes, assessments, and insurence premiums required to be paid by Trustor as they become due.
<br />Lender shall have the right to drew upon the reserve funds to pay such items, and Lender shall not ba required to
<br />determine the validity or accuracy of any itam before paying it. Nothing in the Deed of Trust shall be construed as
<br />requiring Lender to advance other monies for such purposes, and Lender shall not incur any liability for anything it may
<br />do or omit to do with raspect to the reserve account. Subject to any limitations set by applicable law, if the raserve
<br />funds disclose a shortage or deficiency, Trustor shall pay such shortage or deficiency es required by Lender. If Lendar
<br />discovers that the payments into the reserve account have produced a surplus beyond the annual amounts dua to be
<br />paid from the reserve funds by more than the cushion permitted by applicable law, but a payment on the Note has not
<br />been received within 30 days of the payment due date, Lender may retain the excess funds. All amounts in the reserve
<br />account are hereby pledged to further secure the Indebtedness, and Lender is hereby authorizad to withdraw and apply
<br />such amounts on the Indebtedness upon the occurrence of an Event of Default. Lender shall not be required to pay any
<br />interest or earnings on the reserve funds unless required by law or agreed to by Lender in writing. Lender does not hold
<br />the reserve funds in trust for Trustor, and Lender is not Trustor's agent for payment of the taxes and assessments
<br />required to be paid by Trustor.
<br />LENDER'S EXPENDITURES. If Trustor fails (A1 to keep the Property free of all taxes, liens, security interests,
<br />encumbrances, and other cleims, (B) to provide any required insurance on the Property, or (C) to make repairs to the
<br />Property then Lender may do so. If any action or proceeding is commenced that would materially affect Lender's
<br />interests in the Property, then Lender on Trustor's behalf may, but is not required to, take any action that Lender
<br />believes to be appropriate to protect Lender's interests. All expenses incurred or paid by Lender for such purposes will
<br />then bear interest at the rate charged under the Note from the date incurred or paid by Lender to the date of repayment
<br />by Trustor. All such expenses will become a part of the Indebtedness and, at Lender's option, will (A) be payable on
<br />demand; (B) be added to the balance of the Note and be apportioned among and be payabie with any installment
<br />payments to become due during either (1) the term of any applicable insurance policy; or (2) the remaining term of
<br />the Note; or (C) be treated as a balloon payment which will be due and payabie at the Note's maturity. The Deed of
<br />Trust also will secure payment of these amounts. The rights provided for in this paragraph shall be in addition to any
<br />other rights or any remedias to which Lender may be entitled on account of any default. Any such action by Lender
<br />shall not be construed as curing the default so as to bar Lander from any remedy that it otherwise would have had.
<br />WARRANTY; DEFENSE OF TITLE. The following provisions relating to ownership of the Property are a part of this Deed
<br />of Trust:
<br />Title. Trustor warrants that: (a1 Trustor holds good and marketable title of record to the Property in fee simple,
<br />free and clear of all liens and encumbrances other than those set forth in the Real Property description or in any
<br />title insurance policy, title report, or final titie opinion issued in favor of, and accepted by, Lender in connection
<br />with this Deed of Trust, and (b) Trustor has the full right, power, and authority to execute and deliver this Deed of
<br />Trust to Lender.
<br />Defense of Title. Subject to the exception in the paragraph above, Trustor warrants and will forever defend the
<br />title to the Property against the lawful claims of all persons. In the event any action or proceeding is commenced
<br />that questions Trustor's title or the interest of Trustee or Lender under this Deed of Trust, Trustor shall defend the
<br />action at Trustor's expense. Trustor may be tha nominal party in such proceeding, but Lender shall be entitled to
<br />participate in the proceeding and to be represented in the proceeding by counsel of Lender's own choice, and
<br />Trustor will deliver, or cause to be delivered, to Lender such instruments as Lender may request from time to time
<br />to parmit such participetion.
<br />Compliance With Laws. Trustor warrants that the Property and Trustor's use of the Property complies with all
<br />existing applicable laws, ordinances, and regulations of governmental authorities.
<br />Survival of Promises. All promises, agreements, and statements Trustor has made in this Deed of Trust shall
<br />survive the execution and delivery of this Dead of Trust, shall be continuing in nature and shall remain in full force
<br />and effect until such time as Borrower's Indebtedness is paid in full.
<br />CONDEMNATION. The following provisions relating to condemnation proceedings are a part of this Deed of Trust:
<br />Proceedings. If any proceeding in condemnation is filed, Trustor shall promptly notify Lender in writing, and
<br />Trustor shall promptly take such steps as may be necessary to defend the action and obtain the award. Trustor
<br />may be the nominal party in such proceeding, but Lender shall be entitled to participate in the proceeding and to be
<br />represented in the proceeding by counsel of its own choice, and Trustor will deliver or cause to be delivered to
<br />Lender such instruments and documentation as may be requested by Lender from time to time to permit such
<br />participation.
<br />Applicetion of Net Proceeds. If ali or any part of the Property is condemned by eminent domain proceedings or by
<br />any proceeding or purchase in lieu of condemnation, Lender may at its election require that all or any portion of the
<br />net proceeds of the award be applied to the Indebtedness or the repair or restoration of the Property. The net
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