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<br />(3) Unless otherwise permitted by City in writing, insurance proceeds, will be
<br />applied to restoration or repair of the Security damaged. If permitted by City, the insurance
<br />proceeds shall be used to repay any amounts due under the Regulatory Agreement, with the excess,
<br />if any, paid to Trustor. If the Security is abandoned by Trustor, or if Trustor fails to respond to
<br />City, or its designated agent, within thirty (30) days from the date notice is mailed by either of
<br />them to Trustor that the insurance carrier offers to settle a claim for insurance benefits, City, or its
<br />designated agent, is authorized to collect and apply the insurance proceeds at City’s option either
<br />to restoration or repair of the Security or to pay amounts due under Regulatory Agreement.
<br />
<br />(4) If the Security is acquired by City, 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 the
<br />Security prior to the sale or acquisition will pass to City to the extent of the sums secured by this
<br />Deed of Trust immediately prior to such sale or acquisition, subject to the rights of the Approved
<br />senior lienholder.
<br />
<br />(b) During the course of any rehabilitation of the improvements located on the
<br />Property, Trustor shall hire only licensed contractors who maintain the following forms of
<br />insurance:
<br />(1) Liability Insurance. Comprehensive general liability insurance against
<br />liability for bodily injury to or death of any person or property damage arising out of an occurrence
<br />on or about the Property. The limits of such insurance shall be not less than Two Million Dollars
<br />($2,000,000) each occurrence, Four Million Dollars ($4,000,000) annual aggregate, together with
<br />Three Million Dollars ($3,000,000) excess liability coverage, or such other policy limits as City
<br />may require in its reasonable discretion under the Land Donation Agreement.
<br />(2) Worker’s Compensation Insurance. Worker’s compensation insurance
<br />covering all persons employed in connection with any work on the Property.
<br />
<br />Section 2.7 Preservation and Maintenance of Security. Trustor will keep the Security in
<br />good repair and in a neat, clean, and orderly condition and will not commit waste or permit
<br />impairment or deterioration of the Security. If there arises a condition in contravention of this
<br />Section, and if Trustor has not cured such condition within thirty (30) days after receiving a City
<br />notice of such a condition, then in addition to any other rights available to City, City shall have the
<br />right (but not the obligation) to perform all acts necessary to cure such condition, and to establish
<br />or enforce a lien or other encumbrance against the Security to recover its cost of curing.
<br />
<br />Section 2.8 Protection of City’s Security. If Trustor fails to perform the covenants and
<br />agreements contained in this Deed of Trust or if any action or proceeding is commenced which
<br />materially affects City’s interest in the Security, including, but not limited to, default under senior
<br />lien, eminent domain, insolvency, code enforcement, or arrangements or proceedings involving a
<br />bankrupt or decedent, then City, at City’s option, without releasing Trustor from any obligation
<br />hereunder, may make such appearances, disburse such sums and take such action as it determines
<br />necessary to protect City’s interest, including but not limited to, disbursement of reasonable
<br />attorneys’ fees and entry upon the Security to make repairs. Any amounts disbursed by City
<br />pursuant to this paragraph, with interest thereon, will become an indebtedness of Trustor secured
<br />by this Deed of Trust. Unless Trustor and City agree to other terms of payment, such amount will
<br />ATTY/RESO.0024/PC RESO 901 EL CAMINO
<br />REV: 04-11-25 VR
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