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<br />200700073 <br /> <br />that fmanced the purchase, construction, or rehabilitation of the unit, reduced for every year the occupying <br />household has owned the unit, shall be repaid t, from any net gain realized upon the refinancing, unless the <br />property continues to be subject to a deed restriction or other legally enforceable retention agreement or <br />mechanism. Provided that the Lender does not designate a default under the Note, the amounts due and <br />payable under the Note will be forgiven as follows: The principal amount of the Loan shall be reduced over <br />the first 5 years by 1/60th of the original principal balance of the Loan for each month the Loan is <br />outstanding. Such monthly reductions shall take effect in arrears on the same day of the month the Loan was <br />originally made. In the event of foreclosure the full amount of the principal remaining due shall be <br />forgiven. <br /> <br />2. DESIGNATION OF DEFAULT AND REMEDIES. Lender shall give notice to Borrower and Senior <br />Lien Holder prior to a designation of a default under the Note. The notice shall specify: (a) the default; (b) <br />the action required to cure the default; (c) a date, not less than 30 days from the date the notice is given to <br />Borrower (and with respect to Senior Lien Holder, 60 days from the date the notice is given to Senior Lien <br />Holder), by which the default must be cured; and (d) that failure to cure the default on or before the date <br />specified in the notice may result in designation of a default under the Note and the sale of the Property. <br />The notice shall further inform Borrower of the right to reinstate after designation of a default and the right <br />to bring a court action to assert the non.existence of a default or any other defense of Borrower to a <br />designation of default and sale. If the default is not cured by Borrower on or before the date specified in the <br />notice, and Senior Lien Holder has not exercised its right to cure the default, then Lender at its option may <br />designate a default and require immediate payment of all sums not forgiven secured by this Mortgage <br />without further demand and may invoke the power of sale and any other remedies permitted by applicable <br />law. Notwithstanding Lender's right to invoke any remedies hereunder, Lender may not commence <br />foreclosure proceedings or accept a deed in lieu of foreclosure, or exercise any other rights or remedies <br />hereafter until it has given Senior Lien Holder at least 60 days prior written notice. Lender shall be entitled <br />to collect all expenses incurred in pursuing the remedies provided in this section 2, including, but not <br />limited to, reasonable attorneys' fees and costs of title evidence. <br /> <br />If Lender invokes the power of sale, Lender shall mail copies of a notice of sale in the manner prescribed by <br />applicable law to Borrower, Senior Lien Holder and to the other persons prescribed by applicable law. <br />Lender shaH publish the notice of sale by public advertisement for the time and in the manner prescribed by <br />applicable law. Lender, without demand on Borrower, shall sell the Property at public auction to the highest <br />bidder for cash at the time and place and under the terms designated in the notice of sale in one or more <br />parcels and in any order Lender determines. Lender may postpone sale of all or any parcel of the Property <br />to any later time on the same date by public announcement at the time and place of any previously <br />scheduled sale. Lender or its designee may purchase the Property at any sale. <br /> <br />Lender shall deliver to the purchaser Lender's deed conveying the Property without any covenant or <br />warranty, expressed or implied. The recitals in Lender's deed shall be prima facie evidence of the truth of <br />the statements made therein. Lender shall apply the proceeds of the sale in the following order: (a) to all <br />expenses of the sale, including, but not limited to, reasonable attorneys' fees; (b) to all sums not forgiven by <br />this Mortgage; and (c) any excess to the person or persons legally entitled to it. <br /> <br />3. SUBORDINATION. This Mortgage is subject and subordinate in all respects to the liens, terms, <br />covenants and conditions of the First Mortgage and to all advances heretofore made or which may hereafter <br />be made pursuant to the First Mortgage, including all sums advanced for the purpose of (a) protecting or <br />further securing the lien of the First Mortgage, curing defaults by Borrower under the First Mortgage or for <br />any other purpose expressly permitted by the First Mortgage; or (b) constructing, renovating, repairing, <br />furnishing, fixturing or equipping the Property. The terms and provisions of the First Mortgage are <br />paramount and controlling, and they supersede any other terms and provisions hereof in conflict therewith. <br />In the event of foreclosure or deed in lieu of foreclosure of the First Mortgage, any provisions herein or any <br />provisions in any other collateral agreement restricting the use of the Property or otherwise restricting <br />Borrower's ability to sell the Property shall have no further force or effect on subsequent owners or <br />purchasers of the Property. Any person, including his successors or assigns (other than Borrower or a <br />related entity of Borrower), receiving title to the Property through a foreclosure or deed in lieu of <br />foreclosure ofthe First Mortgage shall receive title to the Property free and clear from such restrictions. <br /> <br />2 <br />