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<br /> UNtrr()tc~tC0vFNANTS. Borrower and Lender covenant and agree asfoHow-s:
<br /> 1. Payment of Principal and Interest; Prepayment snd'Late Q;Arges. Borrower shall promptly pay when due
<br /> the principal of and interest on the debt evidenced by the Note and any prepayment and late charges due under the Note.
<br /> 2. Funds for Taxes and Insurance, Subject to applicable law or to a written waiver by.Lender; Borrower shall pay
<br /> to Lender on the day monthly payments are due under the Note, until the Note is paid in full, a sum ("Funds') equal to
<br /> one-twelfth of: (a) yearly taxes and assessments which may attain priority over this Security Instrument; (b) yearly
<br /> leasehold payments or ground rents on the Property, if any; (c) yearly hazard insurance premiums; and (d) yearly
<br /> mortgage insurance premium,, if any. These items are called "escrow items." Lender may estimate the Funds due on the
<br /> basis of current data and reasonable estimates of future escrow items.
<br /> The Funds shall be held in an institution the deposits or accounts of which are insured or guaranteed by a federal or
<br /> state agency (including Lender if Lender is such an institution). Lender shall apply the Funds to pay the escrow items.
<br /> Lender may not charge for holding a.nd applying the Funds, analyzing the account or verifying the escrow items, unless
<br /> Lender pays Borrower interest on the Funds and applicable law permits Lender to make such a charge. Borrower and
<br /> Lender may agree in writing that interest shall be paid on the Funds. Unless an agreement is made or applicable law
<br /> requires interest to be paid, Lender shall not be required to pay Borrower any interest or earnings on the Funds. Lender
<br /> shall give to Borrower, without charge, an annual accounting of the Funds showing credits and debits to the Funds and the
<br /> purpose for which each debit to the Funds was made. The Funds are pledged as additional security for the sums secured by
<br /> this Security Instrument.
<br /> If the amount of the Funds held by Lender, together with the future monthly payments of Funds payable prior to
<br /> the due dates of the escrow items, shall exceed the amount required to pay the escrow items when due, the excess shall be,
<br /> at Borrower's option, either promptly repaid to Borrower or credited to Borrower on monthly payments of Funds. If the
<br /> amount of the Funds held by Lender is not sufficient to pay the escrow items when due, Borrower shall pay to Lender any
<br /> amount necessary to make up the deficiency in one or more payments as required by Lender.
<br /> Upon payment in full of all sums secured by this Security Instrument, Lender shall promptly refund to Borrower
<br /> any Funds held by Lender. If under paragraph 19 the Property is sold or acquired by Lender, Lender shall apply, no later
<br /> than immediately prior to the sale of the Property or its acquisition by Lender, any Funds held by Lender at the time of
<br /> application as a credit against the sums secured by this Security Instrument.
<br /> 3. Application of Payments. Unless applicable law provides otherwise, all payments received by Lender under
<br /> paragraphs I and 2 shall be applied: first, to late charges due under the Note: second, to prepayment charges due under the
<br /> Note; third, to amounts payable under paragraph 2; fourth, to interest due; and last, to principal due.
<br /> 4. Charges: Liens. Borrower shall pay all taxes, assessments, charges, fines and impositions attributable to the
<br /> Property which may attain priority over this Security Instrument, and leasehold payments or ground rents, if any.
<br /> Borrower shall pay these obligations in the manner provided in paragraph 2, or if not paid in that manner, Borrower shall
<br /> pay them on time directly to the person owed payment. Borrower shall promptly furnish to Lender all notices of amounts
<br /> to be paid under this paragraph. If Borrower makes these payments directly, Borrower shall promptly furnish to Lender
<br /> receipts evidencing the payments.
<br /> Borrower shall promptly discharge any lien which has priority over this Security Instrument unless Borrower: (a)
<br /> agrees in writing to the payment of the obligation secured by the lien in a manner acceptable to Lender; (b) contests in good
<br /> faith the lien by, or defends against enforcement of the lien in, legal proceedings which in the Lender's opinion operate to
<br /> prevent the enforcement of the lien or forfeiture of any part of the Property: or (c) secures from the holder of the lien an
<br /> agreement satisfactory to Lender subordinating the lien to this Security Instrument. If Lender determines that any part of
<br /> the Property is subject to a lien which may attain priority over this Security Instrument, Lender may give Borrower a
<br /> notice identifying the lien. Borrower shall satisfy the lien or take one or more of the actions set forth above within 10 days
<br /> of the giving of notice.
<br /> 5. }hazard Insurance. Borrower shall keep the improvements now existing or hereafter erected on the Property
<br /> insured against loss by fire, hazards included within the term "extended coverage" and any other hazards for which Lender
<br /> requires insurance. This insurance shall be maintained in the amounts and for the periods that Lender requires. The
<br /> insurance carrier providing the insurance shall be chosen by Borrower subject to Lender's approval which shall not be
<br /> unreasonably withheld.
<br /> All insurance policies and renewals shall be acceptable to Lender and shall include a standard mortgage clause.
<br /> Lender shall have the right to hold the policies and renewals. If Lender requires, Borrower shall promptly give to Lender
<br /> all receipts of paid premiums and renewal notices. In the event of loss. Borrower shall give prompt notice to the insurance
<br /> carrier and Lender. Lender may make proof of loss if not made promptly by Borrower.
<br /> Unless Lender and Borrower otherwise agree in writing, insurance proceeds shall be applied to restoration or repair
<br /> of the Property damaged, if the restoration or repair is economically feasible and Lender's security is not lessened. If the
<br /> restoration or repair is not economically feasible or Lender's security would be lessened, the insurance proceeds shall be
<br /> applied to the sums secured by this Security Instrument, whether or not then due, with any excess paid to Borrower. If
<br /> Borrower abandons the Property, or does not answer within 30 days a notice from Lender that the insurance carrier has
<br /> offered to settle a claim, then Lender may collect the insurance proceeds. Lender may use the proceeds to repair or restore
<br /> the Property or to pay sums secured by this Security instrument, whether or not then due. The 30-day period will begin
<br /> when the notice is given.
<br /> Unless Lender and Borrower otherwise agree in writing, any application of proceeds to principal shall trot extend or
<br /> postpone the due date of the monthly payments referred to in paragraphs 1 and 2 or change the amount of the payments. If
<br /> under paragraph 19 the Property is acquired by Lender, Borrower's right to any insurance policies and proceeds resulting
<br /> from damage to the Property prior to the acquisition shall pass to Lender to the extent of the sums secured by this Security
<br /> Instrument immediately prior to the acquisition.
<br /> 6. Preservation and Maintenance of Property; Leaseholds. Borrower shall not destroy, damage or substantially
<br /> change the Property, allow the Property to deteriorate or commit waste. If this Security Instrument is on a leasehold,
<br /> Borrower shall comply with the provisions of the lease, and if Borrower acquires fee title to the Property, the leasehold and
<br /> fee title shall riot merge unless Lender agrees to the merger in writing.
<br /> 7. Protection of Lender's Rights in the Property; Mortgage Insurance. If Borrower fails to perform the
<br /> covenants and agreements contained in this Security Instrument, or there is a legal proceeding that may significantly affect
<br /> Lender's rights in the Property (such as a proceeding in bankruptcy, probate, for condemnation or to enforce laws or
<br /> regulations), then Lender may do and pay for whatever is necessary to protect the value of the Property and Lender's rights
<br /> in the Property. Lender's actions may include paying any sums secured by a lien which has priority over this Security
<br /> Instrument, appearing in court, paying reasonable attorneys' fees and entering on the Property to make repairs. Although
<br /> Lender may take action under this paragraph 7. Lender does not have to do so.
<br /> Any amounts disbursed by Lender under this paragraph 7 shall become additional debt of Borrower secured by this
<br /> Security Instrument- Unless Borrower and Lender agree to other terms of payment, these amounts shall bear interest from
<br /> the date of disbursement at the Note rate and shall be payable, with interest, upon notice from Lender to Borrower
<br /> requesting payment.
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