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<br />the restoration and repair, and may further, at its option, apply the Construction Funds then in its
<br />possession either to the reduction of the Indebtedness hereby secured or to the restoration of the Property
<br />in the manner above provided. Any excess Construction Funds, at Lender's option, may be applied to the
<br />reduction of the Indebtedness secured by this Instrument.
<br />7.4 TAXES AND ASSESSMENTS. Grantor shall pay all taxes and assessments against or
<br />affecting the Property prior to delinquency, and, upon request by Lender, Grantor shall deliver to Lender
<br />such evidence of the payment thereof as Lender may require. If Grantor fails to do so, Lender may pay
<br />such taxes and assessments, together with all costs, interest and penalties thereon, at Grantor's expense,
<br />and any such amounts shall be paid by Grantor upon demand of Lender and shall be Indebtedness secured
<br />by this Instrument.
<br />7.5 TAX AND INSURANCE ESCROW.
<br />(a) To the extent required by Lender, Grantor shall establish with Lender a fund for
<br />the payment of taxes, assessments, and insurance premiums (the "Escrow Account") and Grantor shall pay
<br />to Lender on the same day payments are required to be paid under the Note, an escrow payment equal to
<br />one -twelfth of (i) the yearly taxes and assessments which may be levied on the Property, and (ii) the yearly
<br />premium installments for liability insurance, fire and other hazard insurance, and such other insurance
<br />covering the Property as Lender may require, all as reasonably estimated initially and from time to time by
<br />Lender on the basis of assessments and bills and reasonable estimates thereof.
<br />(b) Lender shall apply the Escrow Account to pay all such taxes, assessments,
<br />insurance premiums, and other impositions. Lender shall make no charge for so holding and applying the
<br />Escrow Account, analyzing any account holding all or part of the Escrow Account or for verifying and
<br />compiling any assessments and bills. Lender shall give to Grantor, without charge, an annual accounting of
<br />the Escrow Account in Lender's normal format showing credits and debits to the Escrow Account and the
<br />purpose for which each debit to the Escrow Account was made. The Escrow Account is pledged as
<br />additional security for the Indebtedness.
<br />(c) If the amount of the funds held by Lender at the time of the annual accounting
<br />thereof shall exceed the amount deemed necessary by Lender to provide for payment of taxes,
<br />assessments, insurance premiums, and other impositions, as they fall due, then the excess shall be either
<br />returned to Grantor or held by Lender and credited to the estimated amount of the Escrow Account for the
<br />following year, at Lender's option. If at any time the amount of the Escrow Account held by Lender shall
<br />be less than the amount deemed necessary by Lender to pay taxes, assessments, insurance premiums, and
<br />other impositions, as they fall due, Grantor shall pay to Lender any amount necessary to make up the
<br />deficiency within thirty days after notice from Lender to Grantor requesting payment thereof.
<br />7.6 CONDEMNATION.
<br />(a) Grantor assigns to Lender all judgments, decrees and awards for injury or
<br />damage, direct or consequential, to the Property, and all awards pursuant to proceedings for condemnation
<br />or other taking, whether direct or indirect, of the Property or any part of the Property. Lender may apply
<br />any condemnation proceeds to the Indebtedness in such manner as Lender may elect. Grantor shall
<br />promptly notify Lender of any action or proceeding (or threatened action or proceeding) relating to any
<br />condemnation or other taking, whether direct or indirect, of all or any part of the Property. Grantor shall,
<br />unless otherwise directed by Lender in writing, file or defend its claim under any such action and prosecute
<br />same with due diligence to its final disposition and shall cause any awards or settlements to be paid over to
<br />Lender for disposition pursuant to the terms of this Instrument. Grantor authorizes Lender, at Lender's
<br />option, as attorney-in-fact for Grantor, to commence, appear in, and prosecute, in Lender's or Grantor's
<br />name, any action or proceeding relating to any condemnation or other taking of the Property, whether
<br />direct or indirect, and to settle or compromise any claim in connection with such condemnation or other
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