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241203579
<br />MORTGAGE
<br />(Continued) Page 3
<br />except for those liens specifically agreed to in writing by Lender, and except for the lien of taxes and assessments
<br />not due as further specified in the Right to Contest paragraph.
<br />Right to Contest. Grantor may withhold payment of any tax, assessment, or claim in connection with a good faith
<br />dispute over the obligetion to pey, so long as Lender's interest in the Property is not jeopardized. If a lien arises or
<br />is filed es a result of nonpayment, Grantor shall within fifteen (15) days after the lien arises or, if a lien is tiled,
<br />within fifteen (15) days after Grantor has notice of the filing, secure the discharge of the lien, or if requested by
<br />Lender, deposit with Lender cash or a sufficient corporate surety bond or other security satisfactory to Lender in an
<br />amount sufficient to discharge the lien plus any costs and attorneys' fees, or other charges that could accrue as a
<br />result of e foreclosure or sale under the lien. In any contest, Grantor shall defend itself and Lender and shall
<br />satisfy any sdverse judgment before enforcement against the Property. Grantor shall name Lender as an additional
<br />obligee under any surety bond furnished in the contest proceedings.
<br />Evidence of Payment. Grantor shall upon demand furnish to Lender satisfactory evidence of payment of the taxes
<br />or assessments and shall authorize the appropriate governmental official to deliver to Lender at any time a written
<br />statement of the taxes and assessments against the Property.
<br />Notice of Conatruction. Grantor shall notify Lender at least fifteen (15) days before eny work is commenced, eny
<br />services are furnished, or any materials are supplied to the Property, if any mechanic's lien, materielmen's lien, or
<br />other lien could be asserted on account of the work, services, or materiats. Grantor will upon request of Lender
<br />furnish to Lender advence assurances satisfactory to Lender that Grantor can and will pay the cost of such
<br />improvements.
<br />PROPERTY DAMAGE INSURANCE. The following provisions relating to insuring the Property ere a part of this
<br />Mortgage:
<br />Maintenance of Insurance. Grantor shall procure and maintain policies of fire insurance with standard extended
<br />coverage endorsements on a replacement besis for the full insurable value covering all Improvements on the Real
<br />Property in an amount sufficient to avoid application of any coinsurance clause, and with a standard mortgagee
<br />clause in favor of Lender. Policies shall be written by such insurance companies and in such form as, may be
<br />reasonably acceptable to Lender. Grantor shall deliver to Lender certificates of coverage from each . insurer
<br />containing a stipulation that coverage will not ba cancelled or diminished without a minimum of ten (10) days' prior
<br />written notice to Lender and not containing any disclaimer of the insurer's liability for failure to give such notice.
<br />Each insurance policy also shall include an endorsement providing that coverage in favor of Lender will not be
<br />impaired in any way by any act, omission or default of Grantor or any other person. Should the Real Property be
<br />located in an area designated by the Director of the Federal Emergency Management Agency as a apeciat flood
<br />hazard area, Grantor agrees to obtain and maintain Federal Flood Insurance, if available, within 45 days after notice
<br />is given by Lender that the Property is located in a special flood hazard area, for the full unpaid principal balance of
<br />the Ioen and any prior liens on the property securing the loan, up to the maximum policy limits set under the
<br />National Flood Insurance Program, or as otherwise required by Lender, and to maintain such insurance for the term
<br />of the loan.
<br />Application of Proceeds. Grantor shall promptly notify Lender of any loss or damage to the Property. Lender may
<br />make proof of loss if Grentor fails to do so within fifteen (16) days of the casualty. Whether or not Lender's
<br />security is impaired, Lender may, at Lender's election, receive and retain the proceeds of any insurance and apply
<br />the proceeds to the reduction of the Indebtedness, payment of any lien affecting the Property, or the restoration
<br />and repair of the Property. If Lender elects to apply the proceeds to restoration end repair, Grantor shall repair or
<br />replace the damaged or destroyed Improvements in a manner satisfectory to Lender. Lender shall, upon
<br />satisfactory proof of such expenditure, pay or reimburse Grantor from the proceeds for the reasonabie cost of
<br />repair or restoration if Grantor is not in default under this Mortgage. Any proceeds which have not been disbursed
<br />within 180 days after their receipt and which Lender has not committed to the repair or restoration of the Property
<br />shall be used first to pay any amount owing to Lender under this Martgage, then to pay accrued interest, and the
<br />remainder, if any, shail be applied to the principal balance of the Indebtedness. If Lender holds any proceeds after
<br />payment in full of the Indebtedness, such proceeds shall be paid to Grantor as Grantor's interests may appear.
<br />TAX AND INSURANCE RESERVES. Subject to any limitations and consistent with any requirements set by applicable
<br />law, Lender may require Grantor to maintain with Lender reserves for payment of annual taxes, asaessments, and
<br />insurance premiums, which reserves shall be created by an initial deposit and subsequent monthly payments, ar
<br />payments at such other interval es payments under the Note may be due, of a sum estimated by Lender to be sufficient
<br />to pay the total annual taxes, assessments, and insurance premiums Lender reasonably anticipates to be paid from
<br />these reserves. The reserve funds shall be held by Lender as a general deposit from Grantor, which Lender may satisfy
<br />by payment of the taxes, assessments, and insurance premiums required to be paid by Grantor as they become due.
<br />Lender shall have the right to draw upon the reserve funds to pay such items, and Lender shall not be required to
<br />determine the validity or accuracy of any item before paying it. Nothing in the Mortgage shall be construed as requiring
<br />Lender to advance other monies for such purposes, and Lender shall not incur any liability for anything it may do or omft
<br />to do with respect to the reserve account. Subject to any limitations set by applicable law, if the reserve funds disclose
<br />a shortage or deficiency, Grantor shall pay such shortage or deficiency as required by Lender. If Lender discovers that
<br />the payments into the reserve account have produced a surplus beyond the annual amounts due to be paid from the
<br />reserve funds by more than the cushion permitted by appliceble law, but a payment on the Note has not been received
<br />wlthin 30 deys of the payment due date, Lender may retain the excess funds. AII amounts in the reserve account are
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