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notice from Lenders that the insurance carrier has offered to settle a claim, then Lenders may collect the insurance proceeds. Lenders may use the proceeds to repair or restore the Property or to pay sums secured by this Security Instrument, whether or not then due. The 30 day period will begin when the notice is given. Unless Lenders and Borrowers otherwise agree in writing, any application of proceeds to principal shall not extend or postpone the due date of the yearly payments referred to in paragraphs 1 and 2 or change the amount bf the payments. If under paragraph 19 the Property is acquired by Lenders, Borrowers' right �o any insurance policies and proceeds resulting from damage o the 1 Property prior to the acquisition shall pass to Lenders to�the extent of the sums secured by this Security Instrument immediately prior to the acquisition. b. Preservation and Maintenance of Property; Leaseholds. Borrowers shall not destroy, damage or substantially charge the Property, allow the Property to deteriorate or commit waste. If this Security Instrument is, on a leasehold, Borrowers shall comply with the provisions of the lease, and if Borrowers acquire fee title to the Property, the leasehold and fee title shall not merge unless Lenders agree to the merger in writing. 7. Protection of Lenders' Rights In the Property; Mortgage Insurance. If Borrowers fail to perform -the covenants and agreements contained in this Security instrument, or there is a legal proceeding that may significantly affect Lenders' rights in the Property (such as a proceeding in bankruptcy, probate, for condemnation or to enforce laws or regulations), then Lenders may do and pay for whatever is necessary to protect the value of the Property and Lenders' rights in the Property. Lenders' actions may include paying any sums secured by a lien which has priority nvpr this Security Instrument, appearing in court, paying reasonable attorneys' fees and entering on the Property to make repairs. Although Lenders may take action under this paragraph 7, Lenders do not have to do so. Any amounts disbursed by Lenders under this paragraph 7 shall become additional debt of Borrowers secured by this Security Instrument. Unless Borrowers and Lenders agree to otter terms of payment, these amounts shall bear interest from the date of disbursement at the Note rate and shall be payable, with interest, upon notice from Lenders to' Borrowers requesting payment. If Lenders required mortgage insurance as a condition of making the loan secured by this Security Instrument, Borrowers shall pay the premiums required to maintain the insurance in effect until such times as the requirement for the insurance e�