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UN~FOrtht CovENANTS. Borrower and [.ender c~venant and agree as follows:
1. Payment of Princip~?1 and laterest; Prepayment and Late Chuges. Barrower shall promptly pay when due
the principal of and interest on th~ debt evidenced by the Note and any pre~ayment and late charges due under the Note.
2. Funds tor Taxes and lnsurance. Subject to applicable law or to a written waiver by Lender, Borrower shail pay
to Lender on the day manthly payments are due under the Note, until the Note is paid in full, a sum ("Funds") equal to
one-twelRh of: (a) yearly tazes and assessments which may attain priority over this Security Instrument; (b) yearly
leasehold payments or ground rents on the Property. if any; (c) yearly ha7ard insurance premiums; and (d) yearly
mortgage insurance premiums, if any. These items are called "escrow items." l,ender may estimate the Funds due on the
basis of currer.t data and reasonable estimates of'futu~e ~crow items.
The Funds shall be hcld in an institution the deposits or accounts of which are insured or guaranteed by a federal or
state agency (including Lender if L.ender is such an institution). Lender shall apply the Funds to pay the escrow items.
[.ender may not charge for holding and applying the Funds, analyzing the account or verifying the escrow items, unless
Lender pays Borrower interest on the Funds and applicable law permits Lender to make such a charge. f3orrower and
Lender may agree in writing that interest shall be paid on the Funds. Unless an agreement i$ made or appticable law
requires interest to be paid, Lender shall not be required to pay Borrow•er an}~ interest or earnings on the Funds. Lender
shall give to Borro~~er, without charge, an annual accounting of the Funds showing credits and debits to the Funds and the
p~rpose for which each debit to the Funds w•as made. The Funds are pledged as additional security for the sums s~:ured by
this ~ecurity Instrument.
If the amount of the Funds held by Lender, togeti?cr •~~th the future monthly payments of Funds payable prior to
the du~ dates of the escrow items, shall exceed the amount required to pay the escraw• items when due, the excess shail be.
at Borrower'~ option, either promptly repaid to Borrower or credited to F3orrower on monthly payments of Funds. lf the
am~~unt of the Funds held by Lender is not suft'~icient to pay the escro:ritems when due, Borrower shall pay to Lender an~•
amount necessary to make up the deficiency in one or more payments as required by Lender.
Upon pa}•ment in full of ail sums secured by this Security Instrument. Lender shall promptly refw?J to [3orrower
any~ Funds held by Lender. If under paragraph 19 the Property is snld or acquired by Lender, Lender shal! apply, no later
than immediatel~~ prior to the safe of the Property or its acquisition by Lender, any Funds held by Lender at the time of
application as a credit against the sums secured by this Security Instrument.
3. Application of Payments. Unless applicable law provides otherr~~ise, all payments received by Lender under
paragraphs 1 and 2 shall be a~plied: first, to late charges due under the Note: second, to prepayment charges dur under the
Note; third, to amounts payable under paragraph 2; fourth, to interest due; and last, to principal due.
4, Charges; Liens. Borrower shall pay all taxes, assessments, charges, fines and impositions attributable to the
Property a~hich may attain priority over this Security Instrument, and leasehold payments or ground rents, if any.
Borrower shall pay these obligations in the manner provided in paragraph 2, or if not paid in that manner, Borrow•er shall
pay ihem on time directly to the person owed payment. Borrower shall promptly furnish to Lender all notices of amounts
to be paid under this paragraph. If Borrow~er makes these payments directly, Borrower shall promptly furnish to Lender
i re.:eipts evidencing the payments.
Borrower shall promptly dischs~ge any lien which has priority over this Security Instrument unless Borrower. (a)
agrees in writing to the payment of the obligation secured by the lien in a manner acceptable to Lender; (b) contests in good
fa~th the lien by, or defends against enforcement of the lien in, legal proceedings which in the Lender's opinion operate to
prevent the enforcement of the lien or forfeiture of any ~;ar: of the Property; or (c) secures from the holder of the lien an
agr~ement satisfactory to Lender subordinating the lien to this Security Instrument. If Lender determines that any part of
the Property is subject to a lien which may attain priority over this Security Instrument. Lender may gi~~e Borrow•er a
notice identifying the lien. Borrower shall satisfy the l~en or take one or more of the actions set forth above within 10 days
o(the giving of notice.
5, Hazard lnsurance. Borrow~er shall hciep the improvements now~ existing or hereaRer erected on the Property
insured against loss by fire, hazards included within the term "ertendecl coverage" and any other hazards far which Lender
I requireti insurance. This insurance shall be maintained in the amounts and for the periods that Lender requires. i i~r
` ~in~;urance carrier providing the insurance shall be chosen by Bo*row~er subject to Lender's approval which shall not be
E unreasonabiy withheld.
All insurance policies and renewals ~hall be acceptable t~ Lender and shal) include a standard mortgage cla~se.
- Lender shall have the right to hold the policies and renewa(s. If Lender requires, Borrower shall promptly give to Lender
~ all receipts of paid premiums and renewal notices_ In the e~~ent of loss, Borrower shall give prompt notice to the insurance
carrier and I.ender. Lender may make proof of loss if not made promptlp by Borrower.
Lnless Lender and 8orro~ver othen~~ise agree in writing, insurance prcx:eeds shall be applied to restoration or repair
~ of the Property damaged, if the restoration or repair is economicall}' feasible and Lender's security is not lessened. If the
~ restoratian or re~ air is not economically feasibie or Lender's seeurit}~ H-ould be lesse~ed, the insurance proceeds shall be .
` applied to the sums secured by this Security Instrument, w•hether or not then due, with any excess paid to Borrow~er. If
~ Borrower abandons the Property, or does not answer w~ithin 30 days a notice from Lender that the insurance carrier has
~ offered to settle a claim, then Lender may collect the insurance proceeds. Lender 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
~ w~hen the notice is given.
~ Unless Lender and Borrower otfierwise agree in wntin~, any application of proceeds to principal shall not extend or
~ ~st~ne the due date of the monthly payments referred to in paragraphs 1 and 2 or change the amount of the payments. If
~ under ~aragraph 19 the Property is acquired by Lender, Borrower's right to an}- insurance policies and proceeds :.;_,~l;~ng
from damage to the Pmperty prior to the acquisition shall pass to Lender to the extent of the sums secured by~ this Securit}~
~ Instrument immediately prior to the acquisition.
~ 6. Preserration and :~taintenance of Property; Leaseholds. Borrow~er shall not destroy~, damage or substantiall}~
change the Yroperty, allow• the Property to deteriorate or commit waste. If this Security Instrument is on a leasehold.
Bormw~er shall comply with the provisions of the lease, and if Borrow~er acquirc~ fee title to ihe Propert}•, the leasehold and
fee titie shall not merge unless Le~der agrees to the merger in writing.
~ 7. Protection of Lender's Rights in t~e Property; titortgage Insurance. If Borrow•er fails to perform the
covenants :.nd agteements contained in this Security Instrument, or there is a legal proceeding.that may significantl}~ affect
; Lender'~ rights in the Propert}• (such as a proceeding in bankruptcy, probate, for condemnation or to enforce laa~s or
regulations), then I_cnder may do and pay for w~hate~~er is necessary to protect the ~~alue of the Propert}~ and Lender's rigi~ts
in the Property. Lender's actions may include paying any sums secured b}~ a lien which has priority over this Secunt}•
Instrument, appearing in court, pa}•ing reasonable attorney~s fees and entering on the Propert}• to make repairs. Although
Lender may take action under this paragraph 7, Lender does no! have to da so. '
An~~ amounts disbursed by Lender under this paragraph 7 shall become additional debt of Bormwer secured b}~ this
Securitv (nstrument. Unless Bc,rrower and Lender agree to other terms of pay~ment, these amounts shall bear interest from
the date e~f disbursement at the tiote rate and shall he payable, with interest, u~n notire frc~m Lender to Borrower
reyuesting pa~ ment.
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