ALL ENCUMBRANCES AND
LIENS HAVING PRIORITY OVER THE LIEN OF THIS SECURITY INSTRUMENT, EXCEPT FOR THE
ITEMS SET FORTH AS EXCEPTIONS TO, SUBORDINATE MATTERS IN, OR OTHERWISE DISCLOSED
IN THE TITLE INSURANCE POLICY INSURING THE LIEN OF THIS SECURITY INSTRUMENT,
NONE OF WHICH, INDIVIDUALLY OR IN THE AGGREGATE, MATERIALLY INTERFERE WITH THE
BENEFITS OF THE SECURITY INTENDED TO BE PROVIDED BY THIS SECURITY INSTRUMENT,
MATERIALLY AFFECT THE VALUE OR MARKETABILITY OF THE PROPERTY, MATERIALLY IMPAIR
THE USE OR OPERATION OF THE PROPERTY FOR THE USE CURRENTLY BEING MADE THEREOF OR
IMPAIR BORROWER'S ABILITY TO PAY ITS OBLIGATIONS IN A TIMELY MANNER (SUCH ITEMS
BEING THE "PERMITTED ENCUMBRANCES").
(B)
TITLE.
BORROWER HAS, SUBJECT ONLY TO THE PERMITTED ENCUMBRANCES,
GOOD, INSURABLE AND MARKETABLE FEE SIMPLE TITLE TO THE PREMISES, IMPROVEMENTS
AND FIXTURES (THE IMPROVEMENTS AND FIXTURES, TOGETHER WITH THE PREMISES ARE
REFERRED TO COLLECTIVELY AS THE "REALTY") AND GOOD, INSURABLE AND MARKETABLE
TITLE TO ALL EASEMENTS AND RIGHTS BENEFITING THE REALTY AND HAS THE RIGHT, POWER
AND AUTHORITY TO MORTGAGE, ENCUMBER, GIVE, GRANT, BARGAIN, SELL, ALIEN, ENFEOFF,
CONVEY, CONFIRM, PLEDGE, ASSIGN, AND HYPOTHECATE THE PROPERTY.
BORROWER WILL
PRESERVE ITS INTEREST IN AND TITLE TO THE PROPERTY AND WILL FOREVER WARRANT AND
DEFEND THE SAME TO LENDER AGAINST ANY AND ALL CLAIMS MADE BY, THROUGH OR UNDER
BORROWER AND WILL FOREVER WARRANT AND DEFEND THE VALIDITY AND PRIORITY OF THE
LIEN AND SECURITY INTEREST CREATED HEREIN AGAINST THE CLAIMS OF ALL PERSONS
WHOMSOEVER CLAIMING BY, THROUGH OR UNDER BORROWER.
THE FOREGOING WARRANTY OF
TITLE SHALL
39
SURVIVE THE FORECLOSURE OF THIS SECURITY INSTRUMENT AND SHALL INURE TO THE
BENEFIT OF AND BE ENFORCEABLE BY LENDER IN THE EVENT LENDER ACQUIRES TITLE TO
THE PROPERTY PURSUANT TO ANY FORECLOSURE.
IN ADDITION, THERE ARE NO OUTSTANDING
OPTIONS OR RIGHTS OF FIRST REFUSAL TO PURCHASE THE PROPERTY OR BORROWER'S
OWNERSHIP THEREOF.
(C)
TAXES AND IMPOSITIONS.
ALL TAXES AND OTHER IMPOSITIONS AND
GOVERNMENTAL ASSESSMENTS DUE AND PAYABLE IN RESPECT OF, AND AFFECTING, THE
PROPERTY HAVE BEEN PAID TO THE EXTENT DUE AND PAYABLE AS OF THE DATE HEREOF.
BORROWER HAS PAID ALL IMPOSITIONS WHICH CONSTITUTE SPECIAL GOVERNMENTAL
ASSESSMENTS IN FULL, EXCEPT FOR THOSE ASSESSMENTS WHICH ARE PERMITTED BY
APPLICABLE LEGAL REQUIREMENTS TO BE PAID IN INSTALLMENTS, IN WHICH CASE ALL
INSTALLMENTS WHICH ARE DUE AND PAYABLE HAVE BEEN PAID IN FULL.
THERE ARE NO
PENDING, OR TO BORROWER'S BEST KNOWLEDGE, PROPOSED SPECIAL OR OTHER ASSESSMENTS
FOR PUBLIC IMPROVEMENTS OR OTHERWISE AFFECTING THE PROPERTY, NOR ARE THERE ANY
CONTEMPLATED IMPROVEMENTS TO THE PROPERTY THAT MAY RESULT IN SUCH SPECIAL OR
OTHER ASSESSMENTS.
(D)
CASUALTY; FLOOD ZONE.
THE REALTY IS IN GOOD REPAIR AND FREE AND
CLEAR OF ANY DAMAGE, DESTRUCTION OR CASUALTY (WHETHER OR NOT COVERED BY
INSURANCE) THAT WOULD MATERIALLY AFFECT THE VALUE OF THE REALTY OR THE USE FOR
WHICH THE REALTY IS CURRENTLY BEING USED, THERE EXISTS NO STRUCTURAL OR OTHER
MATERIAL DEFECTS OR DAMAGES IN OR TO THE PROPERTY AND BORROWER HAS NOT RECEIVED
ANY WRITTEN NOTICE FROM ANY INSURANCE COMPANY OR BONDING