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<br />5.04 Liens, Encumbrances and Charges. Trustor shall immediately discharge any lien not approved by Beneficiary in
<br />writing that hos or may attain priority over this Deed of Trust. Subject to the provisions of the Building Loan Agreement
<br />regarding mechanics' liens, Trustor shall pay when due all obligations secured by or reducible to liens and encumbronces
<br />which sholl now or hereafter encumber or appear to encumber all or any part of the Subject Property or any interest therein,
<br />whether senior or subordinate hereto.
<br />5.05 Damages: Insurance and Condemnation Proceeds.
<br />(a) (i) All awards of damages and all other compensation payable directly or indirectly by reason of a condemnation
<br />or proposed condemnation for public or private use affecting all or any port of, or any interest in, the Subject Property; and
<br />(ii) all other claims and owards for damages to,or decrease in value of,oll or any part of, or any interest in, the Subject
<br />Property; and (iii) all proceeds of any insurance policies payable by reason of loss sustained to all or any part of the Subject
<br />Property; and (iv) all interest which may accrue on any of the foregoing, ore all absolutely and irrevocably assigned to and
<br />shall be paid to Beneficiary. At the obsolute discretion of Beneficiary, whether or not its security is or may be impaired but
<br />subject to applicable law, if any, and without regard to any requirement contained in Section 5.06(c), Beneficiary may (v)
<br />apply all or any of the proceeds it receives to its expenses in settling, prosecuting or defending the claim and apply the
<br />balance to the Secured Obligations in any order, and /or (vi) release all or any part of the proceeds to Trustor upon any
<br />conditions Beneficiary may impose. Beneficiary may commence, appear in, defend or prosecute any assigned claim or
<br />action and may adjust, compromise, settle and collect all cloims and awards ossigned to Beneficiory, but shall not be
<br />responsible for any failure to collect any claim or award, regardless of the cause of the foilure.
<br />(b) At its sole option, Beneficiary may permit insurance or condemnation proceeds held by Beneficiary to be used for
<br />repair or restoration but may condition such application upon the deposit with Beneficiary of such additional funds which
<br />Beneficiary determines are needed to pay all cost of the repair or restoration, (including without limit taxes, financing
<br />charges, insurance and rent during the repair period), on establishment of an arrangement for lien releases and disbur-
<br />sement of funds acceptoble to Beneficiory and on delivery to Beneficiary of:
<br />(i) plans and specifications for the work, o contract for the work signed by o contractor acceptable to Beneficiary, a
<br />cost breakdown for the work and a payment and performance bond for the work, all of which shall be acceptable to
<br />Beneficiary; and
<br />(ii) evidence acceptable to Beneficiary: (aa) that after completion of the work the income from the Subject Property
<br />will be sufficient to pay all expenses and debt service for the Subject Property; (bb) of continuation of leases acceptable to
<br />and required by Beneficiary; (cc) that, upon completion of the work, the size, capacity and total value of the Subject Property
<br />will be at least as great as it was before the damage or condemnation occurred; (dd) that there hos been no material or
<br />substantial adverse change in the financial condition or credit of Trustor since the date of this Deed of Trust; and (ee) of
<br />satisfaction of any additional conditions that Beneficiary moy establish to protect its security.
<br />Trustor acknowledges that the specific conditions described above ore reosonable.
<br />5.06 Maintenance and Preservation of the Subject Property. Subject to the provisions of the Building Loan
<br />Agreement, Trustor covenants: (o) to insure the Subject Property and to keep the Subject Property in good condition and
<br />repair; (b) except with Beneficiary's prior written consent, not to remove or demolish the Subject Property or ony part thereof;
<br />not to alter, restore or odd to the Subject Property; and not to initiate or acquiesce in any change in any zoning or other land
<br />classification which affects the Subject Property; (c) to complete or restore promptly and in good and workmanlike monner
<br />the Subject Property or ony part thereof which may be damaged or destroyed, without regard to whether Beneficiory elects to
<br />require that insurance proceeds be used to reduce the Secured Obligations as provided in Section 5.05; (d) not to suffer
<br />violation of any, and to comply with oll (1) lows, ordinances, regulations and standards, and (11) all covenants, conditions,
<br />restrictions and equitable servitudes, whether public or private, of every kind and character and (iii) requirements of in-
<br />surance companies and ony bureau or agency which establishes standards of insurability, which laws, covenants or
<br />requirements affect the Subject Property and pertain to acts committed or conditions existing thereon, including (but without
<br />limit) such work or alteration, improvement or demolition as such laws, covenants or requirements mandate; (e) not to
<br />commit or permit waste of the Subject Property; and (f) to do all other acts which from the character or use of the Subject
<br />Property may be reasonably necessory to maintain and preserve its volue.
<br />5.07 Defense and Notice of Losses, Claims and Actions. Trustor shall protect, preserve and defend the Subject
<br />Property and title to and right of possession of the Subject Property, the security hereof and the rights and powers of
<br />Beneficiary and Trustee hereunder at Trustor's sole expense against all adverse claims. Trustor shall give Beneficiary and
<br />Trustee prompt notice in writing of the assertion of any claim, of the filing of any action or proceeding, of the occurrence of
<br />any damage to the Subject Property, and of any condemnation offer or action.
<br />5.08 Acceptance of Trust; Powers and Duties of Trustee. Trustee accepts this trust when this Deed of Trust is
<br />recorded. From time to time upon written request of Beneficiary and presentation of this Deed of Trust for endorsement, and
<br />without affecting the personal liability of ony person for payment of any indebtedness or performance of any obligation
<br />secured hereby, Trustee moy, without liability therefor and without notice: reconvey all or ony port of the Subject Property;
<br />consent to the making of ony mop or plat thereof; loin in any grant of easement thereon, ony declaration of covenants and
<br />restrictions, ony extension agreement or ony agreement subordinating the lien or charge hereof. Trustee or Beneficiary may
<br />from time to time apply to any court of competent jurisdiction for aid and direction in the execution of the trusts hereunder
<br />and the enforcement of the rights and remedies available hereunder, and may obtain orders or decrees directing or con-
<br />firming or approving acts in the execution of said trusts and the enforcement of said rights and remedies. Trustee has no
<br />obligation to notify any party of any pending sole or any action or proceeding (including, but not limited to actions in which
<br />Trustor, Beneficiary or Trustee shall be a party) unless held or commenced and maintained by Trustee under this Deed of
<br />Trust. Trustee shall not be obligated to perform ony act required of it hereunder unless the performance of the act is
<br />requested in writing and Trustee is reasonably indemnified against loss, cost, liability and expense.
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