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Beneficiary of any default under any mortgage, deed of trust or other security agreement with a lien on the <br />Property. <br />4. Hazard Insurance. Trustor shall keep the improvements and personal property now <br />existing or hereafter erected on the Property insured against loss by fire, vandalism and malicious mischief <br />by a policy of standard fire and extended all-risk insurance. The policy shall be written on a full <br />replacement value basis. <br />Subject to the rights of senior mortgagees, the insurance policy shall be issued in the name of the <br />Trustor and the Beneficiary, as their interests appear. The insurance policy shall contain an endorsement <br />which provides that any proceeds shall be disbursed and used to repair or rebuild any such improvements <br />so damaged or destroyed. <br />The full replacement value of the improvements to be insured hereunder shall be determined by <br />the company issuing the policy at the time the policy is initially obtained. Not more frequently than once <br />every two years, either the Trustor or the Beneficiary shall have the right to notify the other party that it <br />elects to have the replacement value redetermined by the insurance company. <br />The insurance policy shall be issued by an insurance company authorized to do business in the <br />State of California with a financial rating of at least A VII status as rated in the most recent edition of Best's <br />Key Rating Guide. The policy shall contain an endorsement requiring thirty days written notice from the <br />insurance company to both parties before cancellation. <br />5. Defense of Security. Trustor agrees to appear in and defend any action or proceeding <br />purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; and to pay all costs <br />and expenses, including cost of evidence of title and attorneys' fees in a reasonable sum, in any such <br />action or proceeding in which Beneficiary or Trustee may appear. <br />6. Reimbursement of Costs. Trustor agrees to pay immediately and without demand all sums <br />expended by Beneficiary or Trustee pursuant to the provisions hereof, with interest from date of <br />expenditure at the amount allowed by law in effect on the date hereof. <br />B. It is mutually agreed that: <br />1. Repayment. In the event that the Participant fails to adequately perform the terms and <br />conditions of the Owner Participation Agreement and is thereby deemed to be in default as provided in <br />Section 3.06.G. thereunder, Beneficiary shall have the authority to enforce the terms of the Note by <br />providing Trustor notice thereof. <br />2. Right to Cure. Should Trustor fail to (i) make any payment on the Note, or (ii) perform any <br />act, duty or obligation under this Deed of Trust, then Beneficiary or Trustee, but without obligation to do so <br />and without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, <br />may make or do the same in such manner and to such extent as either may deem necessary to protect the <br />security hereof, Beneficiary or Trustee being authorized to enter upon said property for such purposes; <br />appear in and defend any action or proceeding purporting to affect the security hereof or the rights or <br />powers of Beneficiary or Trustee; pay, purchase, contest, or compromise any encumbrance, charge, or lien <br />which in the judgment of either appears to be prior or superior hereto; and, in exercising any such powers, <br />