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Ur+tt!ot?tnr CoveN+?r,Ta. Borrower and Lender covenant and agree as follows:
1. lrsytweN of Trirtei~ol ttitsti lNerest. Borrower shall ptamptly pay when due the principal of and interest on the
ittdebtedrtea evidenced by the Note. prepayment and late charges ac provided in the Note, and the principal of and interest
on any Future Advances sceured by this Mortgage. '
1rrtMs for Texas ttati [wrttrce. Subject to applicable law ar to a written waiver by Lender. Borrower shall pay
to Lender on the day monthly installments of principal and interest ,ere payable under the Note, until the Note is paid in full,
a stun (herein "Fundsi") equal to one-twelfth of the yearly tars and assessments which may attain priority over this
Mortgage, and ground rents on the Property, if any, rlus one-twelfth of yearly premium installments for hazard insurance.
plus one-twelfth of yearly premium installments for mortgage insurance. it any, all as rcssonably estimated initially and from
time to tithe by Lender on the basis of assessments and hills and reasonable estimates thereof.
The Funds shall be held in an institution the deposits ar accounts of which are insured or guaranteed by a Federal of
state agency (including Lender if Lender is such an institution), Lender shall apply the Funds to pay said taxes, assestments,
insurance premiums and ground rents. Lender may hat charge for sa holding and applying the Funds, analyzing said account,
or verifying and compiling said assessments and hills, unless Lender pays Borrower interest on the Funds and applicable law
permits Lender to make such a charge. Harrower :nd Lender may agree in writing at the time of execution o[ this
Mortgage that interest on the Funds shall be paid to Borrower, and unless such agreement u made ar applicable law
rcquira such interest to be paid. Lender shall not be required to pay Borrower any interest or earnings on the Funds. Lender
shall give to Borrower, without charge. an annual accounting of the Funds showing credits and debits to the Funds and the
purpose for which each debit to the Funds was made. The Funds are pledged as additional security for the sums .secured
by this Mongagt.
If the amount of the Funds held by Lender, together with the future monthly installments of Funds payable prior to
the due dates of taxes, assessments, insurance prcmiurru and ground rents, shall exceed the amount required to pay said taxes,
assessments, insurance premiums and ground rents- as they fall due, such excess shall be, at Borrowers option, either
pranptly repaid to Borrower or ciedited to $orrower on monthly installments of Funds. If the amount of the funds
held by Lsnder shall not be sufficient to pay taxes, assessments, insurance premiums and ground rents as they fall due.
Borrower shall pay to Lender any amount necessary to make up the deficiency within 30 days from the date notice is mailed
by Lender to $orrower requesting payment thereof.
Upon payment in full of all sums secured by this Mortgage, l.onder shall promptly refund to Borrower any Funds
held by Lender. If under paragraph 18 hereof fete Properly is sold or the Property +s otherwise acquired by Lender, Lender
shall apply, no later than immediately prior to the sale of the Progeny or its acquisition by Lender, any Funds held by
Leader at the time of application as a credit against the sums secured by this Mortgage.
3. Applicatloo of Paynreots. Unless applicable law provides otherwise, all payments received by Lender under the
Note and paragraphs 1 and 2 hereof shaft be applied by fender first in payment of amounts payable to Lender by Borrower
under paragraph 2 hereof, then to interest payable an the Note, then to the principal of the Note, and then to interest and
principal on any Future Advances.
Charges; Liens. Borrower Shall pay all taxes, assessments and ether charges. fines and impositions attributable to
the Properly which may attain a priority over this Mortgage, and leasehold payments ar ground rents, if any, in the manner
provided under paragraph 2 hereof or, if not paid in such manner, by Borrower making payment, when due, directly to the
payee thereof. Borrower shall promptly furnish to Lender all notices of amounts due under this paragraph, and in the event
Borrower shall make payment directly, Borrower shall promptly furnish to Lender receipts evidencing such payments.
Borrower shall promptly discharge any lien which has priority aver this Mortgage; provided, that Borrower shall not be '
required to discharge any such lien so long as Borrower shall agree in writing to the payment of the obligatian secured by
such lien in a manner acceptable to Lender, ar shall in gcx~d faith contest such lien by, or defend enforcement of such lien in,
legal proceedings which operate to prevent the enforcement of the lien or forfeiture of the Properly or any pan thereof.
S. Hazard Insurance. Borrower shall keep the improtements nave- existing or hereafter erected on the Progeny insured
agairrst loss by fire, hazards included within the term "extended coverage", and such other hazards as Lender may reyuire
and in such amounts and far such periods as lender may reyuire; provided, that Lender shall not require that the amount of
such coverage exceed that amount of coverage required to pay the sums secured by this Mortgage.
The insurance carrier providing the insurance shall be chosen by Borrower subject to approval by Lender, provided,
that such approval shall not be unreasonably withheld. All premiums on insurance policies shall be paid in the manner
provided under paragraph 2 hereof or. if not paid in such manner, by Harrower making payment, when due, directly to the
insurance carrier.
Alt insurance policies and renewals thereof shall be in form acceptable to Lender and shall include a standard mortgage
clause in favor of and in form acceptable to Lender. lender shall have the right to hold the policies and renewals thereof,
and Borrower shall promptly furnish to Lender all renewal notices and all receipts of paid premiums. In the event of loss,
Borrower shall give prompt notice to the insurance carrier and [.ender. Lender may make pra~f of loss if not made promptly
by Borrower.
Unless Lender and Borrower otherwise agree in writng, insurance proceeds shall be applied to restoration or regale of
.the Property damaged, provided such restorahun ur repair is economically feasible and the security of this Mortgage is
not thereby impaired. If such restoration or repair is not econamicatty fcasibte or if the security of this Mortgage would
be impaired. the insurance proceeds shall be applied to the sums secured by this Mortgage, with the excess, if any, paid
to Borrower. If the Property Is abandoned by Harrower, or it Bo:mwer fails to respond to Lender within 30 days from the
date notice is mailed by Lender to Harrower that the insurance carrier otters to settle a claim for insurance benefits, Lender
is authorized to collect anJ apply the imuran~e proceeds at tender's option either- to restoration or repair of the Properiv
or to the sums secured by this Mortgage.
Unless Lender and Borrower otherwise agree m venting, any such application of proceeds to principal shall not extend
or postpone the due date of the monthly installments referred to in paragraphs I and 2 hereof or change the amount of
such installments. if under paragraph I8 hereof the Property is acyulred h} Lender, all right, title and interest of Borrower
in and to any Insurance policies and in and to the proceeds thereof resulting from damage to the Progeny prior to the sale
or acquisition shall pass to Lender to the estent of the wms secured by this Mortgage immediately prior to such sale or
acquisition.
6. Presen•ation and ~taiotenance of Properis; Leaseholds; Condominiums; Planned Unit Deselopments. Borrower
shall keep the Progeny in gucxf repair and shall not commit y~aste ur permit impairment or deterioration of the Property
anc' shall comply with the proviswns of any lease it this Mortgage Is tin a leasehold. If this Mortgage is on a unit in a
condominium ar a planned unit development, Borrower shall perMrm all of Borrower's obligations under the declaraUun
or covenants creating ur governing the ccmdominwm ur planned unit development, the by-laws and regulations of the
condomutlum or planned unit development. and constituent dcxumentc. 1f a condominium or planned unit development
rider is executed by Horruwer and recorded together with this Mortgage, the covenants and agreements of such rider
shall be incorporated into and shall amend and supplement the covenants and agreements of this Mortgage as if the rider
were a pan hereof.
7. Protection of Lenders 5ecur(ty. ff Horrowcr falk to perform the covenants and agreements contained in this
Mortgage, or if any action or prckeeding Is commenced which materially affects Lender's interest in the Property,
including. but hat bmlted to. eminent dum:un. nisolvenc~. uxlc enforcement. ar arrangements or proceedings invoh•ing a
bankrupt or decedent, then Lender at Lender's option, upon native to Harrower, may make such appearances, disburse such
sums and take such action av +s necessary to protect Lender's interest, including. but hat limned !a, du5ursement of
reasonable auarney's tees and entry upset the Pmpcity tr. make repairs. If Lender reyuirrd mortgage insurance as a
cortdltiun of making the loan secured h} this M~~rtgage. Horresver shill pay the premiums required to maintain such
insurance ui effect until such time as the reyuucmeni far such Insurance terminates m accordance w•Ith Bormwer's and
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