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CITY COUNCIL DRAFT <br />assessment described in this Section so long as Trustor is actively contesting its validity in good <br />faith and by appropriate legal proceedings that will operate to prevent the enforcement of the lien <br />or forfeiture of the Property or any part thereof. Trustor shall post security for the payment of such <br />contested claims as may be requested by the City. <br />4. Protection of Security. If Trustor fails to perform any of the covenants and <br />agreements set forth in this Deed of Trust, or if any action or proceeding is commenced that <br />materially affects City's interest in the Property, including, but not limited to, default under any <br />senior lienholder document, eminent domain, insolvency, code enforcement, arrangements or <br />proceedings involving a bankrupt or decedent, foreclosure of any mortgage secured by the <br />Property or sale of the Property under a power of sale of any instrument secured by the Property, <br />City, at its option, without releasing Trustor from any obligation hereunder, may upon notice to <br />Trustor, make such appearance, disburse such sums and take such action as is necessary to protect <br />City's interest, including, but not limited to, the purchase of insurance, disbursement of reasonable <br />attorneys' fees and entry upon the Property to make repairs. Any amounts disbursed by City <br />pursuant to this Section, with interest thereon, shall become additional indebtedness of Trustor <br />secured by this Deed of Trust. Unless Trustor and City agree to other terms of payment, such <br />amounts shall be payable upon notice from City to Trustor requesting payment thereof, and shall <br />bear interest from the date of disbursement at the highest rate permissible under applicable law. <br />Nothing contained in this Section shall require City to incur any expense or take any action <br />hereunder. <br />5. Inspection. The City may make, or cause to be made, reasonable entries upon the <br />Property and inspections of the Security; provided that the City will give Trustor reasonable notice <br />of inspection. <br />6. Title Insurance. At Trustor's expense, Trustor shall purchase a CLTA lender's <br />policy of title insurance for the benefit of City, insuring this Deed of Trust as a secondary lien on <br />the Property, with no delinquent taxes or assessment liens appearing as exceptions to title. <br />7. Hazard Insurance. Trustor shall keep the Property insured by a standard all-risk <br />property insurance policy with endorsements for vandalism, malicious mischief, and special <br />extended perils, in the full replacement value of the improvements, and with endorsements for <br />increases in costs due to changes in code and inflation, with loss payable to City and any superior <br />trust deed holder, as their interests may appear, and any other insurance required by the City. <br />The insurance carrier providing such insurance shall be licensed to do business in the State <br />of California and may be chosen by Trustor, subject to approval by City. All insurance policies <br />and renewals thereof shall be in a form acceptable to the City, and shall include a standard <br />mortgagee clause with standard lender's endorsement in favor of the holder of any senior lien and <br />the City as their interests may appear and in a form acceptable to the City. Trustor shall provide <br />City with copies of all policies and renewals thereof, certificates of insurance, all renewal notices <br />and all receipts of paid premiums. In the event of loss, Trustor shall give prompt notice to the <br />insurance carrier and the City or its designated agent. The City, or its designated agent, may make <br />proof of loss if not made promptly by Trustor. The policies shall include an endorsement providing <br />that City shall receive thirty (30) days' advance written notice of the cancellation, expiration or <br />Exhibit D <br />Page 52 <br />5 53 94.0010 1 \43721567.2 <br />