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<br />86-101706
<br />for Mortgagor, to appear in and prosecute with Mortgagor, or
<br />failing Mortgagor's separate action, to undertake in Bank's name
<br />to make proof of loss, to adjust and compromise any claim under
<br />insurance policies, to appear in and prosecute any action arising
<br />from such insurance policies, to collect and receive insurance
<br />proceeds, and to deduct from such proceeds Bank's expenses
<br />incurred in the collection of such proceeds. Mortgagor further
<br />authorises Bank, at Bank's option, to hold the balance of such
<br />proceeds to be used to reimburse Mortgagor for the costs of
<br />reconstruction or repair of the improvements, or to apply the
<br />balance of such proceeds to the payment of the sums secured by
<br />this Mortgage, whether or not then due. If the insurance pro-
<br />ceeds are held by Bank co be used to reimburse Mortgagor for the
<br />costs of restoration and repair of the improvements, the improve-
<br />ments shall be restored to the equivalent of their condition
<br />immediately prior to the casualty, or such other condition as
<br />Bank may approve in writing. If the insurance proceeds are
<br />applied to the payment of the sums secured by this Mortgage, any
<br />such application of proceeds to principal shall be in the inverse
<br />order of maturity, if applicable. If the Property is sold in a
<br />foreclosure by Bank or the Property is acquired by Bank, all
<br />right, title, and interest of Mortgagor in and to any insurance
<br />policies and unearned premiums on such policies and in and to the
<br />proceeds of such policies resulting from damage to the Property
<br />prior to the sale or acquisition shall pass to Bank.
<br />6. In the event the Mortgagor shall not fully comply
<br />with the terms and conditions of any of the preceding Paragraphs
<br />2, 3, 4, and 5, Bank may at its option make payment of the items
<br />mentioned in such Paragraphs, and the Mortgagor agrees to repay
<br />upon demand all funds hereafter advanced by Bank for such
<br />payments, with interest on such payments from the date of such
<br />payments until repaid at the default rate set forth in the Note,
<br />all of which advances so made by Bank and interest shall be and
<br />become part of the Obligation secured by this Mortgage.
<br />7. Mortgagor shall not commit waste or permit waste to
<br />be committed on the Property, shall keep all improvements on the
<br />Property, including trees, shrubs, and fences, in good condition
<br />and repair, and shall not overgraze the Property. Mortgagor
<br />shall observe commercially acceptable animal husbandry practices
<br />in operating the Property.
<br />8. Mortgagor shall comply with all laws, ordinances,
<br />and regulations affecting the Property or its use and shall
<br />faithfully comply with the terms and conditions of all grazing
<br />leases (federal, state, and private) and insurance policy provi-
<br />sions now or hereafter in effect, made by or for the benefit of
<br />the Mortgagor, for use in connection with the operation of the
<br />Property.
<br />9. Mortgagor will deliver immediately to Bank a true
<br />copy of any process, pleadings, or papers, however designated,
<br />related to any action or proceeding instituted to evict
<br />Mortgagor, or to recover possession of the Property, or to affect
<br />in any way this Mortgage, the Obligation, or title to the
<br />Property. Should Bank be made party to any action affecting this
<br />Mortgage, the Obligation or the title to the Property, Mortgagor
<br />agrees that Bank may, at its option, defend such action, and in
<br />the event Bank elects to defend, all court costs and expenses
<br />thereof, including without limitation reasonable attorneys' fees,
<br />surveys, and costs of evidence of title to the Property, shall
<br />become a part of the Obligation secured by this Mortgage.
<br />10. This Mortgage shall cover all property described in
<br />Exhibit C and all property affixed to or located upon the real
<br />property described in Exhibit k to this Mortgage which, to the
<br />fullest extent permitted by law, shall be deemed fixtures and a
<br />part of the real property, and shall cover all articles of per-
<br />sonal property owned by Mortgagor which are delivered to the
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