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“First Lien Mortgage”)and a mortgage in favor of Housing and Redevelopment Authority in and <br />for the City of Elk River in the amount of up to $75,000.00 (the “ThirdLienMortgage”)and <br />those other certain permitted encumbrancesidentified in Exhibit Bhereto (the “Permitted <br />Encumbrances”); that Mortgagee shall quietly enjoy and possess the Mortgaged Property; that <br />Mortgagor will warrant and defend the title to the Mortgaged Property against all claims, <br />whether now existing or hereafter arising.The covenants and warranties of this paragraph shall <br />survive foreclosure of this Mortgage and shall run with the Land. <br />AND IT IS FURTHER COVENANTED AND AGREED AS FOLLOWS: <br />ARTICLE ONE <br />GENERAL COVENANTS, AGREEMENTS, WARRANTIES <br />1.1.Payment of Obligations; Observance of Covenants.Mortgagor will duly pay and <br />perform its Obligations and will perform all other agreements and covenants by Mortgagor to be <br />performed hereunder. <br />1.2.Payment of Impositions.Mortgagor agrees to pay, before a penalty mightattach <br />for nonpayment thereof, all taxes, assessments, water and sewer charges, and other fees, taxes <br />and charges of whatsoever nature levied upon or assessed or placed against the Mortgaged <br />Property (collectively “Impositions”). Mortgagor will likewise pay all taxes, assessments and <br />other charges, levied upon or assessed, placed or made against, or measured by, this Mortgage, <br />or the recordation hereof,or the Obligations, provided that Mortgagor shall not be obliged to pay <br />such tax, assessment or charge if such payment would be contrary to law or would result in the <br />payment of an usurious rate of interest on the Obligations. Mortgagor shall promptly furnish to <br />Mortgagee all notices received by Mortgagor of amounts due under this Section and upon <br />Mortgagee’s request, shall deliver proper receipts evidencing the payment of such amounts. In <br />the event of a judicial decree or legislative enactment after thedate of this Mortgage, providing <br />that any such imposition may not be lawfully paid by Mortgagor, or in the event that the payment <br />of any such imposition by Mortgagor would result in the payment of a usurious rate of interest <br />on the Obligations, the Obligations, together with interest, shall become immediately due and <br />payable, or, at Mortgagee’s option, Mortgagee may pay any amount or portion of such <br />Imposition as renders the Obligations unlawful or usurious, in which event Mortgagor shall <br />concurrently therewith pay the remaining lawful and non-usurious portion or balance of said <br />Imposition. <br />1.3.Payment of Operating Costs; Mortgages and Liens.Mortgagoragrees that it will <br />pay, or cause to be paid, all operating costs and expenses of the Mortgaged Property; keep the <br />Mortgaged Property free from mechanics’and material suppliers’and other liens, subject to <br />Mortgagor’s right to contest in good faith as set forth in Section 1.4 hereof; will keep the <br />Mortgaged Property free from levy, execution or attachment and will immediately pay when due <br />all indebtedness which may be secured by mortgage, lien or charge on the Mortgaged Property <br />and upon request will exhibit to Mortgagee satisfactory evidence of such payment and discharge. <br />3 <br />477340v3 EL185-40 <br /> <br />