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3. As security for Owner's obligation to repay the Installment Loan and accrued interest thereon, and
<br /> the cost, including reasonable attorney's fees, of collecting the same,and subject to the terms and
<br /> conditions of this Mortgage, Owner hereby grants, and HRA shall and hereby does have, a
<br /> statutory mortgage on the Property in accordance with Minnesota Statutes,Section 507.15.
<br /> 4. The Owner covenants with the HRA the following statutory covenants;
<br /> a. To warrant the title to the Property; subject to permitted encumbrances as set forth in
<br /> Exhibit C.
<br /> b. To pay the indebtedness as herein provided.
<br /> c. To pay all taxes.
<br /> d. That the Property shall be kept in repair and no waste shall be committed.
<br /> e. That the whole of the principal sum shall become due after default,in the payment of any
<br /> installment of principal or interest, or of any tax, or in the performance of any other
<br /> covenant,at the option of the HRA.
<br /> f. To pay principal and interest on prior mortgages.
<br /> 5. If default be made in any payment or covenant herein, the HRA shall have the statutory power of
<br /> sale,and on foreclosure may retain statutory costs and attorney's fees.
<br /> 6. For the protection of the HRA, the Owner will, during all the time until the indebtedness secured
<br /> by this mortgage is fully paid, maintain all risk property insurance, naming the HRA as an
<br /> additional insured,in an amount not less than the full insurable replacement value of the Property.
<br /> Said insurance shall be written by a company or companies licensed to do business in Minnesota
<br /> and rated Class A-:VII or better by A.M. Best Company. The term "full insurable replacement
<br /> value" shall mean the actual replacement cost of the Property (excluding foundation and
<br /> excavation costs and costs of underground flues, pipes, drains, and other items customarily
<br /> omitted from replacement cost valuation for insurance purposes), without deduction for
<br /> depreciation. The Owner will assign and deliver the policies of such insurance to the HRA so and
<br /> in such manner and form that the HRA shall at all times, until the full payment of said
<br /> indebtedness,have and hold the said policies as a collateral and further security for the payment of
<br /> said indebtedness, or at the option of the HRA will make such policies payable in case of loss to
<br /> the HRA as its interest may appear and will deposit them with the HRA, and in default of so
<br /> doing,that the HRA may,but has no obligation to,obtain such insurance from year to year,or for
<br /> one or more years at a time, and pay the premiums therefor, and that the Owner will forthwith
<br /> repay to the HRA the same, with interest at the mortgage rate, and that the same shall become a
<br /> part of the debt secured by this mortgage in like manner as the principal sum. The Owner may
<br /> retain any moneys received by him/her on the policies,but the same shall apply in part payment of
<br /> this mortgage.
<br /> 7. This Mortgage shall terminate and shall be of no further force or effect upon payment in full of the
<br /> Installment Loan and accrued interest thereon.
<br /> 8. The Owner will indemnify, save, and hold harmless the HRA, the City of Elk River, Minnesota,
<br /> Central Minnesota Housing Partnership, Inc., their officers, agents, and employees, from and
<br /> against any claim, cause of action, damage, liability, loss or expense, including attorney's fees
<br /> incurred by the HRA, made by any party in connection with or arising from (i) the presence, if
<br /> any, of hazardous wastes or pollutants on the Property; (ii) any loss or damage to property or any
<br /> injury to or death of any person occurring at or about or resulting from any defect in the Property,
<br /> (iii) the performance of, or failure to perform, this Mortgage. Nothing herein shall be deemed a
<br /> waiver of any statutory limitations of liability or immunity.
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