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20041'002 lien in a manner acceptable to Lenders; (b) contest in good faith the lien by, or defend against enforcement of the lien in, legal proceedings which in the Lenders' opinion operate to prevent the enforcement of the lien or forfeiture of any part of the Property; or (c) secures from the holder of the lien an agreement satisfactory to Lenders subordinating the lien to this Security Instrument. If Lenders determine that any part of the Property is subject to a lien which may attain priority over this Security Instrument, Lenders may give Borrowers a notice identifying the lien. Borrowers shall satisfy the lien or take one or more of the actions set forth above within 10 days of the giving of notice. 5. Hazard Insurance. Borrowers shall keep the improvements now existing or hereafter erected on the Property insured against loss by fire, hazards included within the term "extended coverage" and any other hazards for which Lenders require insurance. This insurance shall be maintained in the amounts and for the periods that Lenders require but not less than the amount owed Lenders. The insurance carrier providing the insurance shall be chosen by Borrowers subject to Lenders' approval which shall not be unreasonably withheld, and Lenders shall be provided a copy of said insurance policy. All insurance policies and renewals shall be acceptable to Lenders and shall include a standard mortgage clause. Lenders shall have the right to hold the policies and renewals. Lenders require that Borrowers shall promptly give to Lenders all receipts of paid premiums and renewal notices. In the event of loss, Borrowers shall give prompt notice to the insurance carrier and Lenders. Lenders may make proof of loss if not made promptly by Borrowers. Unless Lenders and Borrowers otherwise agree in writing, insurance proceeds shall be applied to restoration or repair of the Property damaged, if the restoration or repair is economically feasible and Lenders' security is not lessened. If the restoration or repair is not economically feasible or Lenders' security would be lessened, the insurance proceeds shall be applied to the sums secured by this Security Instrument, whether or not then due, with any excess paid to Borrowers. If Borrowers abandon the Property, or do not answer within 30 days a 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 payment referred to in paragraph 1. If under paragraph 19 the Property is acquired by Lenders, Borrowers' right to any insurance policies and proceeds resulting from damage to the 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. 6. Preservation and Maintenance of Property; Leaseholds. Borrowers shall not destroy, damage or substantially change 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. 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 over 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 other 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. 2