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<br />19 <br />appropriate legal proceedings which will operate to prevent the enforcement of the lien or <br />forfeiture of the Property or any part thereof. Trustor shall post security for the payment of <br />such contested claims as may be requested by the Beneficiary. <br /> <br />5.6 Insurance. Trustor shall keep the Land and the Improvements insured by <br />a standard all-risk property insurance policy in an amount equal to the replacement value <br />of the Property with loss payable to the Beneficiary. The insurance carrier providing such <br />insurance shall be licensed to do business in the State of California and may be chosen by <br />Trustor, subject to approval by Beneficiary. All insurance policies and renewals thereof will <br />be in a form acceptable to the Beneficiary, and will include a standard mortgagee clause <br />with standard lender's endorsement in favor of the holder of any senior lien and the <br />Beneficiary as their interests may appear and in a form acceptable to the Beneficiary. The <br />Beneficiary shall have the right to hold, or cause its designated agent to hold, the policies <br />and renewals thereof, and Trustor shall promptly furnish to the Beneficiary, or its designated <br />agent, the original insurance policies or certificates of insurance, all renewal notices and all <br />receipts of paid premiums. In the event of loss, Trustor will give prompt notice to the <br />insurance carrier and the Beneficiary or its designated agent. The Beneficiary, or its <br />designated agent, may make proof of loss if not made promptly by Trustor. The Beneficiary <br />shall receive thirty (30) days advance written notice of the cancellation, expiration or <br />termination or any material change in the coverage afforded by any of the insurance policies <br />required under this Section. <br /> <br />Unless otherwise permitted by the Beneficiary in writing, insurance proceeds, <br />subject to the rights of the holder of any senior lien, will be applied to restoration or repair <br />of the Property damaged. If the Property is abandoned by Trustor, or if Trustor fails to <br />respond to the Beneficiary, or its designated agent, within thirty (30) days from the date <br />notice is mailed by either of them to Trustor that the insurance carrier offers to settle a <br />claim for insurance benefits, the Beneficiary, or its designated agent, is authorized to <br />collect and apply the insurance proceeds at the Beneficiary's option either to restoration or <br />repair of the Property or to pay amounts due under the Secondary Unit Regulatory <br />Agreement. <br /> <br />If the Property is acquired by the Beneficiary, all right, title and interest of Trustor in <br />and to any insurance policy and in and to the proceeds thereof resulting from damage to <br />the Property prior to the sale or acquisition will pass to the Beneficiary to the extent of the <br />sums secured by this Deed of Trust immediately prior to such sale or acquisition, subject <br />to the rights of the holder of any senior lien. <br /> <br />Renewal policies and any replacement policies, together with premium receipts <br />satisfactory to the Beneficiary, shall be delivered to the Beneficiary at least thirty (30) days <br />prior to the expiration of existing policies. Neither Trustee nor the Beneficiary shall by <br />reason of accepting, rejecting, approving or obtaining insurance incur any liability for the <br />existence, nonexistence, form or legal sufficiency of such insurance, or solvency of any <br />insurer for payment of losses. <br /> <br />6. IT IS MUTUALLY AGREED THAT: <br /> <br />6.1. Protection of Beneficiary's Security. If Trustor fails to perform the <br />covenants and agreements contained in this Deed of Trust, or if any action or proceeding <br />Page 216 of 344