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Page 2 of 5 Minnesota Uniform Conveyancing Blanks Form 20.1.2
<br />(b) Statutory Covenants. Borrower makes and includes in this Mortgage the following covenants and
<br />provisions set forth in Minn. Stat. 507.15, and the relevant statutory covenant equivalents contained therein are hereby
<br />incorporated by reference:
<br />(c) Additional Covenants and Agreements of Borrower. Borrower makes the following additional
<br />covenants and agreements with Lender:
<br />(a) Borrower shall keep all buildings, improvements, and fixtures now or later located on all or any part of the
<br />Property (collectively, the "Improvements ") insured against loss by fire, lightning, and such other perils as are included in a
<br />standard all -risk endorsement, and against loss or damage by all other risks and hazards covered by a standard extended
<br />coverage insurance policy, including, without limitation, vandalism, malicious mischief, burglary, theft, and if applicable, steam
<br />boiler explosion. Such insurance shall be in an amount no less than the full replacement cost of the Improvements, without
<br />deduction for physical depreciation. If any of the Improvements are located in a federally designated flood prone area, and if
<br />flood insurance is available for that area, Borrower shall procure and maintain flood insurance in amounts reasonably
<br />satisfactory to Lender. Borrower shall procure and maintain liability insurance against claims for bodily injury, death, and
<br />property damage occurring on or about the Property in amounts reasonably satisfactory to Lender and naming Lender as an
<br />additional insured, all for the protection of the Lender.
<br />(b) Each insurance policy required pursuant to Paragraph 3(a) must contain provisions in favor of Lender
<br />affording all right and privileges customarily provided under the so- called standard mortgagee clause. Each policy must be
<br />issued by an insurance company or companies licensed to do business in Minnesota and acceptable to Lender. Each policy
<br />must provide for not less than ten (10) days written notice to Lender before cancellation, non - renewal, termination, or change
<br />in coverage. Borrower will deliver to Lender a duplicate original or certificate of such insurance policies and of all renewals
<br />and modifications of such policies.
<br />(c) If the Property is damaged by fire or other casualty, Borrower must promptly give notice of such damage to
<br />Lender and the insurance company. In such event, the insurance proceeds paid on account of such damage will be applied to
<br />payment of the amounts owed by Borrower pursuant to the Note, even if such amounts are not otherwise then due, unless
<br />Borrower is permitted to make an election as described in the next paragraph. Such amounts first will be applied to unpaid
<br />accrued interest and next to the principal to be paid as provided in the Note in the inverse order of their maturity. Such
<br />payment(s) will not postpone the due date of the installments to be paid pursuant to the Note or change the amount of such
<br />installments. The balance of insurance proceeds, if any, will be the property of Borrower.
<br />(d) Notwithstanding the provisions of Paragraph 3(c), and unless otherwise agreed by Borrower and Lender in
<br />writing, if (i) Borrower is not in default under this Mortgage (or after Borrower has cured any such default); (ii) the mortgagees
<br />under any prior mortgages do not require otherwise; and (iii) such damage does not exceed ten percent (10 %) of the then
<br />assessed market value of the Improvements, then Borrower may elect to have that portion of such insurance proceeds
<br />necessary to repair, replace, or restore the damaged Property (the "Repairs ") deposited in escrow with a bank or title
<br />insurance company qualified to do business in Minnesota, or such other party as may be mutually agreeable to Lender and
<br />Borrower. The election may only be made by written notice to Lender within sixty (60) days after the damage occurs; and the
<br />election will only be permitted if the plans, specifications, and contracts for the Repairs are approved by Lender, which
<br />approval shall not be unreasonably withheld, conditioned, or delayed. If such a permitted election is made by Borrower,
<br />Lender and Borrower shall jointly deposit the insurance proceeds into escrow when paid. If such insurance proceeds are
<br />insufficient for the Repairs, Borrower shall, before the commencement of the Repairs, deposit into such escrow sufficient
<br />additional money to insure the full payment for the Repairs. Even if the insurance proceeds are unavailable or are insufficient
<br />to pay the cost of the Repairs, Borrower shall at all times be responsible to pay the full cost of the Repairs. All escrowed funds
<br />shall be disbursed in accordance with sound, generally accepted, construction disbursement procedures. The costs incurred
<br />or to be incurred on account of such escrow shall be deposited by Borrower into such escrow before the commencement of
<br />the Repairs. Borrower shall complete the Repairs as soon as reasonably possible and in a good and workmanlike manner,
<br />and in any event the Repairs shall be completed by Borrower within one (1) year after the damage occurs. If, following the
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<br />(I) To warrant the title to the Property;
<br />(ii) To pay the Indebtedness as herein provided;
<br />(iii) To pay all taxes;
<br />(iv) That the Property shall be kept in repair and no waste shall be committed;
<br />(v) To pay principal and interest on prior mortgages (if any).
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