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MORTGAGE 9 9 � �,� E1' �� Page 3
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<br /> any materials are supplied to the Property,if any mechanic's lien, materialmen's lien, or other lien could be asserted on account of the work,
<br /> services,or materials. Grantor will upon request of Lender furnish to Lender advance assurances satistactory to Lender that Grantor can and
<br /> will pay the cost of such improvements.
<br /> • PROPERTY DAMAGE INSURANCE. The following provisions relating to insuring the Property are a part of this Mortgage:
<br /> Maintenance of Insurance. Grantor shall procure and maintain policies of fire insurance with standard extended coverage endorsements
<br /> on an actual cash value basis for the full insurable value covering all Improvements on the Real Property in an amount sufficient to avoid
<br /> application of any coinsurance clause,and with a standard mortgagee clause in favor of Lender. Policies shall be written by such insurance
<br /> companies and in such form as may be reasonably acceptable to Lender. Grantor shall deliver to Lender certificates of coverage from each
<br /> insurer containing a stipulation that coverage will not be cancelled or diminished without a minimum of thirty(30)days'prior written notice to
<br /> Lender and not containing any disclaimer of the insurer's liability for failure to give such notice. Each insurance policy also shall include an
<br /> endorsement providing that coverage in favor of Lender will not be impaired in any way by any act, omission or default of Grantor or any
<br /> other person. Should the Real Property be located in an area designated by the Director of the Federal Emergency Management Agency as
<br /> a special flood hazard area, Grantor agrees to obtain and maintain Federal Flood Insurance, if available,within 45 days after notice is given
<br /> by Lender that the Property is located in a special flood hazard area, for the full unpaid principal balance of the loan and any prior liens on
<br /> the property securing the loan,up to the maximum policy limits set under the National Flood Insurance Program,or as otherwise required by
<br /> Lender,and to maintain such insurance for the term of the loan.
<br /> Application of Proceeds. Grantor shall promptly notify Lender of any loss or damage to the Property. Lender may make proof of loss if
<br /> Grantor fails to do so within fifteen(15)days of the casualty. Whether or not Lender's security is impaired,Lender may,at Lender's election,
<br /> receive and retain the proceeds of any insurance and apply the proceeds to the reduction of the Indebtedness,payment of any lien affecting
<br /> the Property, or the restoration and repair of the Property. If Lender elects to apply the proceeds to restoration and repair, Grantor shall
<br /> repair or replace the damaged or destroyed Improvements in a manner satisfactory to Lender. Lender shall, upon satisfactory proof of such
<br /> expenditure,pay or reimburse Grantor from the proceeds for the reasonable cost of repair or restoration if Grantor is not in default under this
<br /> Mortgage. Any proceeds which have not been disbu�sed within 180 days after their receipt and which Lender has not committed to the
<br /> repair or restoration of the Property shall be used first to pay any amount owing to Lender under this Mortgage,then to pay accrued interest,
<br /> and the remainder,if any,shall be applied to the principal balance of the Indebtedness. If Lender holds any proceeds after payment in full of
<br /> the Indebtedness,such proceeds shall be paid to Grantor as Grantor's interests may appear.
<br /> Unexpired Insurance at Sale. Any unexpired insurance shall inure to the benefit of,and pass to,the purchaser of the Property covered by
<br /> this Mortgage at any trustee's sale or other sale held under the provisions of this Mortgage,or at any foreclosure sale of such Property.
<br /> Compliance with Existing Indebtedness. During the period in which any Existing Indebtedness described below is in effect, compliance
<br /> with the insurance provisions contained in the instrument evidencing such Existing Indebtedness shall constitute compliance with the
<br /> insurance provisions under this Mortgage, to the extent compliance with the terms of this Mortgage would constitute a duplication of
<br /> insurance requirement. If any proceeds from the insurance become payable on loss,the provisions in this Mortgage for division of proceeds
<br /> shall apply only to that portion of the proceeds not payable to the holder of the Existing Indebtedness.
<br /> LENDER'S D(PENDITURES. If Grantor fails (A) to keep the Property free of all taxes,liens,security interests,encumbrances,and other claims,
<br /> (B) to provide any required insurance on the Property, (C) to make repairs to the Property or to comply with any obligation to maintain Existing
<br /> Indebtedness in good standing as required below,then Lender may do so. If any action or proceeding is commenced that would materially affect
<br /> Lender's interests in the Property, then Lender on Grantor's behalf may, but is not required to, take any action that Lender believes to be
<br /> appropriate to protect Lender's interests. All expenses incurred or paid by Lender for such purposes will then bear interest at the rate charged
<br /> under the Note from the date incurred or paid by Lender to the date of repayment by Grantor. All such expenses will become a part of the
<br /> Indebtedness and,at Lender's option,will (A) be payable on demand; (B) be added to the balance of the Note and be apportioned among and
<br /> be payable with any installment payments to become due during either (1) the term of any applicable insurance policy; or (2) the remaining
<br /> term of the Note; or (C) be treated as a balloon payment which will be due and payable at the Note's maturity. The Property also will secure
<br /> payment of these amounts. The rights provided for in this paragraph shall be in addition to any other rights or any remedies to which Lender may
<br /> be entitled on account of any default. Any such action by Lender shall not be construed as curing the default so as to�ar Lender from any
<br /> remedy that it otherwise would have had.
<br /> WARRANTY; DEFENSE OF TITLE. The following provisions relating to ownership of the Property are a part of this Mortgage:
<br /> Title. Grantor warrants that: (a) Grantor holds good and marketable title of record to the Property in fee simple,free and clear of al! liens
<br /> and encumbrances other than those set forth in the Real Property description or in the Existing Indebtedness section below or in any title
<br /> insurance policy, title report, or final title opinion issued in favor of, and accepted by, Lender in connection with this Mortgage, and (b)
<br /> Grantor has the full right,power,and authority to execute and deliver this Mortgage to Lender.
<br /> Defense of Title. Subject to the exception in the paragraph above,Grantor warrants and will forever defend the title to the Property against
<br /> the lawful claims of all persons. In the event any action or proceeding is commenced that questions Grantor's title or the interest of Lender
<br /> under this Mortgage, Grantor shall defend the action at Grantor's expense. Grantor may be the nominal party in such proceeding, but
<br /> Lender shall be entitled to participate in the proceeding and to be represented in the proceeding by counsel of Lender's own choice, and
<br /> Grantor will deliver, or cause to be delivered, to Lender such instruments as Lender may request from time to time to permit such
<br /> participation.
<br /> Compliance With Laws. Grantor warrants that the Property and Grantor's use of the Property complies with all existing applicable laws,
<br /> ordinances,and regulations of governmental authorities.
<br /> Survival of Promises. All promises,agreements,and statements Grantor has made in this Mortgage shall survive the execution and delivery
<br /> of this Mortgage,shall be continuing in nature and shall remain in full force and effect until such time as Grantor's Indebtedness is paid in full.
<br /> EXISTING INDEBTEDNESS. The following provisions concerning Existing Indebtedness are a part of this Mortgage:
<br /> Existing Lien. The lien of this Mortgage securing the Indebtedness may be secondary and inferior to an existing lien. Grantor expressly
<br /> covenants and agrees to pay, or see to the payment of, the Existing Indebtedness and to prevent any default on such indebtedness, any
<br /> default under the instruments evidencing such indebtedness,or any default under any security documents for such indebtedness.
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