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sums secured by this Instrument and shall be subject to the •
right of set off.
If the amount of the Funds held by Lender at the ~
time of the annual accounting thereof shall eaceed the amount
deemed necessary by Lender to provide for the payment of water
and sewer rates, tazes, assessments, insurance premiums, rents
and Other Impositions, as they fa~l due, such ezcess shall be
credited to Borrower on the nezt monthly installment or
installments of Funds due. If at any time the amount of the ~j
Funds held by Lender shall be less than the amount deemed 1
necessary by Lender to pay water and sewer rates, taaes,
assessments, insurance premiums, rents and Other Impositions, as
they fall due, Borrower shall pay to Lender any amount necessary
~to make up the deficiency immediately after notice from Lender ~
to Borrower requesting payment thereof. ~
Upon Borrower's breach of any covenant or
agreement of Borrower in this Instrument, Lender may apply, in
any amount and in any order as Lender shall determine in
Lender's sole discretion, any Funds held by Lender at the time
of application~ (a) to pay rates, rents, taaes, assessments,
insurance premiums and Other Impositions which are now or will
hereafter become due, or (b) as a credit against sums secured by
this Instrument. Upon payment in full of all sums secured by
this Instrument, Lender shall promptly refund to Borrower any
Funds held by Lender.
3. APPLICATION OF PAYI~NTS. Unless applicable law
provides otherwise, all payments received by Lender from
Borrower under the Note or this Instrument shall be applied by
Lender in the following order of priority: (a) amounts payable
to Lender by Borrower under paragraph 2 hereof; (b) late charges
payable pursuant to the Note; (c) prepayment premiums payable
pursuant to the Note; (d) interest payable on the Note; (e)
principal of the Note; ~f) interest payable on advances made
pursuant to paragraph 8 hereof; (g) principal of advances made
pursuant to paragraph 8 hereof; and (h) any other sums secured
by this Instrument in such order as Lender, at I,ender's option, ~
may determine; provided, however, that Lender may, at Lender's ,
option, apply any sums payable pursuant to paragraph 8 hereof
prior to interest on and principal of the Note, but such
application shall not otherwise affect the order of priority of
~ application specified in this paragraph 3.
f 4. CHARGES; LIENS. Borrower shall pay all water and
~ sewer rates, rents, taaes, assessments, premiums, and Other
~ Impositions attributable to the Project at Lender's option 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, or in such other manner as Lender may
designate in writing. Borrower shall promptly furnish to Lender
~ all notices of amounts due under this paragraph, and in the
~ event Borrower shall make payment directly, Horrower shall
~ promptly furnish to Lender receipts evidencing such payments.
~ Horrower shall promptly discharge any lien which has, or may
have, priority over or equality with, the lien of this
~ Instrument, and Borrower shall pay, when due, the claims of all
persons supplying labor or materials to or in connection with
the Project. Without Lender's prior written consent, Borrower
shall not allow any lien, encumbrance, or other interest in the
Project inferior to the lien of this Instrument to be perfected
against the Project.
5. HAZARD INSURANCE. Borrower shall keep the
4 improvements now eaisting or hereafter erected on the Project
~ insured by carriers at all times satisfactory to Lender against
~ loss by fire, hazards included within the term "eatended
~ coveraqe", rent loss, flood if required by law, and such other
~ hazards, casualties, liabilities and contingencies as Lender
shall require and in such amounts and for such periods as Lender
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