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T_ M R %- 14 W If l want to exercise the Conversion Option, 1 must first meet certain conditions, Those conditions are that: (I) I most give the Note Holder notice that 1 want to do so; (ii) on the Conversion Date, I must not be In default under the Note or the Security Instrument; (iii) by a date specified by the Notc Holder, l must pay the Note Hol4w a canwjrslan fee equal to one percent (1.0%) of the original principal of this Note plus U.S, $ 250,00 ; and (iv) I must sign and give the Note Holder any documents the Note Holder requires to affect the conversion. (B) Calculation of Fixed Rate My new, fixed interest rate will be equal to the Federal National Mortgage Association's required net yield as of a date and time of day specified by the Note Holder for (i) if the original term of this Note is greater than I$ years, 30 -year fixed rate mortgages covered by applicable 60•day mandatory delivery commitments, plus five-cilibilto of arts percentage point (0.625%), rounded to the nearest one- eighth of one percentage point (0.125%), or (i1) If the original term of this Note is IS years or less, 15 -year fixed rate mortgages covered by applicable 60 -day mandatory delivery commitments, plus five- eighths of one percentage point (0.625%), rounded to the nearest one - eighth of one percentage point (0.125 %). If this required net yield cannot be determined because the applicable commitments are not available, the Note Holder will determine my interest rate by using comparable information. (C) New Payment Amount and Effective Date If I choose to exercise the Conversion Option, the Note Holder will determine the amount of the monthly payment that would be sufficient to repay the unpaid principal 1 am expected to owe on the Conversion Date in full on the maturity date at my new fixed interest rate in substantially equal payments. The result of this calculation will be the new amount of my monthly payment. Beginning with my first monthly payment after the Conversion Date, I will pay toe new amount as my monthly payment until the maturity date. C. TRANSFER OF THE PROPERTY OR A BENEFICIAL. INTEREST IN BORROWER 1. Until Borrower exercises the Conversion Option under the conditions stated in Section B of this Adjustable Rate Rider, Uniform Covenant 17 of the Security Instrument is amended to read as follows: Transfer of the Property or a Beneficial Interest in Borrower. if all or any part of the Property or any interest in it is sold or transferred (or if a beneficial interest in Borrower is sold or transferred and Borrower is not a natural person) without Lender's prior written consent, Lender may, at its option, require immediate payment in full of all sums secured by this Security Instrument. However, this option shall not be exercised by Lender if exercise prohibited by federal law as of the date of this Security Instrument. Lender also shall not exercise this option if: (a) Borrower causes to be submitted to Lender information required by Lender to evaluate the intended transferee as if a new loan were being made to the transferee; and (b) Lender reasonably determines that Lender's security will not be impaired by the loan assumption and that the risk of a breach of any covenant or agreement in this Security Instrument is acceptable to Lender. To the extent permitted by applicable law, Lender may charge a reasonable fee as a condition to Lender's consent to the loan assumption. Lender may also require the trensferce to sign an assumption agreement that is acceptable to Lender and that obligates the transferee to keep all the promises and agreements made in the Note and in this Security Instrument. Borrower will continue to be obligated under the Note and this Security Instrument unless Lender releases Borrower in writing. If Lender exercises the option to require immediate payment in full, Lender shall give Borrower notice of acceleration. The notice shall provide a period of not less than 30 days from the date the notice is delivered or mailed within which Borrower must pay all sums secured by this Security Instrument. If Borrower fails to pay these sums prior to the expiration of this period, Lender may invoke any remedies permitted by this Security Instrument without further notice or demand on Borrower. 2. If Borrower exercises the Conversion Option under the conditions stated in Section B of this Adjustable Rate Rider, the amendment to Uniform Covenant 17 of the Security Instrument contained in Section C I above shall then cease to be in effect, and the provisions of Uniform Covenant 17 of the Security Instrument shall instead be in effect, as follows: Tratifer of the Property or a Beneficial [alerts( in Borrower. if all or any part of the Property or any interest in it is sold or transferred (or if a beneficial interest in Borrower is sold or transferred and Borrower is not a natural person) without Lender's prior written consent, Lender may, at its option, require immediate payment in full of all sums secured by this Security Instrument. However, this option shall not be exercised by Lender if exercise is prohibited by federal law as of the date of this Security Instrument. If Lender exercises this option, Lender shall give Borrower notice of acceleration. The notice shall provide a period of not less than 30 days from the date the notice is delivered or mailed within which Borrower must pay all sums secured by this Security Instrument. If Borrower fails to pay these sums prior to the expiration of this period, Lender may invoke any remedies permitted by this Security Instrument without further notice or demand on Borrower. BY SIGNING BELOW, Borrower accepts and agrees to the terms and covenants contained in this Adjustable Rate Rider. 1 (Seal) Max A. Bachman Borrower i (Seal) Melanie Suns Pachman Morro %cr (Seal) uorrowcr (Seal) If I- VV