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<br />carrier and American. Mortgagor authorizes American, at American's
<br />cption, as attorney in fact for Mortgagor, to appear in and prosecute
<br />with Mortgagor, or failing Mortgagor's separate action, to undertake
<br />in American's name to make proof of loss, to adjust and compromise
<br />any claim under insurance policies, to appear in and prosecute any
<br />action arising from such insurance policies, to collect and receive
<br />insurance proceeds, and to deduct from such proceeds American's
<br />expenses incurred in the collection of such proceeds. Mortgagor fur-
<br />ther authorizes American, at American's option, to hold the balance
<br />of such proceeds to be used to reimburse Mortgagor for the costs of
<br />reconstruction or repair of the improvements, or to apply the balance
<br />of such proceeds to the payment of the scans secured by this Mortgage,
<br />whether or not then due. If the insurance proceeds are held by
<br />American to be used to reimburse Mortgagor for the costs of restora-
<br />tion and repair of the improvements, the improvements shall be
<br />restored to th= equivalent of their condition immediately prior to
<br />the casualty, or such other condition as American «<ay approve ir,
<br />writing. If the insurance proceeds are applied to the payment of the
<br />sums secured by this Mortgage, any such application of proceeds to
<br />principal shall be in the inverse order of maturity, if applicable.
<br />If the Property is sold in a foreclosure by American or the Froperty
<br />is acquired by American, all right, title, and interest of Mortgagor
<br />in and to any insurance policies and unearned premiums on such poli-
<br />cies and in and to the proceeds of such policies resulting from
<br />damage to the Property prior to the sale or acquisition shall pass to
<br />American.
<br />6. In the event the Mortgagor shall not fully comply with
<br />the terms and conditions of any of the preceding Paragraphs 2, 3, 4,
<br />and 5, American may at its option make payment of the items mentioned
<br />in such Paragraphs: and the Mortgagor agrees to repay upon 3emand all
<br />funds hereafter advanced by American for such payments, with interest
<br />on such payments from the date of such payments until repaid at the
<br />default rate set forth in the Note, all of which advances so made by
<br />American and interest shall be and become part of the Obligation
<br />secured by this Mortgage.
<br />7. Mortgagor shall not commit waste or permit waste to be
<br />committed on the Property, shall keep all improvements on the
<br />Property, including trees, shrubs, and fences, in good condition and
<br />repair, and shall not overgraze the Property. Mortgagor shall
<br />observe commercially acceptable animal husbandry practices in operat-
<br />ing the Property.
<br />8. Mortgagor shall comply with all laws, ordinances, and
<br />regulations affecting the Property or its use and shall faithfully
<br />comply with the terms and conditions of all grazing leases ifederal,
<br />state, and private) and insurance policy provisions now or hereafter
<br />in effect, made by or for the benefit of the Mortgagor, for use in
<br />connection with the operation of the Property.
<br />9. Mortgagor will deliver immediately to Americana true
<br />copy of any process, pleadings, or papers, however designated,
<br />related to any action or proceeding instituted to evict Mortgagor, or
<br />to recover possession of the Property, or to affect in any way this
<br />Mortgage, the Obligation, or title to the Property. Shouln American
<br />be made party to any action affecting this Mortgage, the ligation
<br />or the title to the Property, Mortgagor agrees that American may, at
<br />its option, defend such action, and in the event American elects to
<br />defend, all court costs and expenses thereof, including without limi--
<br />tatian reasonable attorneys' fees, surveys, and costs of evidence of
<br />title to the Property, shall become a part of the Obligation secured
<br />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 A to this Mortgage which, to the
<br />fullest extent permitted by law, shall be deemed fixtures and a part
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