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8 <br />EL185\81\983265.v1 <br />to monthly deposits to be made thereafter as provided for herein, shall assure that there <br />will be sufficient funds on deposit to pay the Impositions as they come due; plus <br /> <br />(b) One-twelfth (1/12) of the annual premiums on each policy of insurance <br />required to be maintained hereunder; provided that with the first such deposit there shall <br />be deposited, in addition, an amount equal to one-twelfth (1/12) of such annual insurance <br />premiums multiplied by the number of months elapsed between the date premiums on <br />each policy are last paid to and including the date of deposit. <br /> <br />The amount of such deposits shall be based upon Mortgagee’s reasonable estimate as to the <br />amount of Impositions and premiums of insurance next to be payable. Mortgagee will, upon <br />timely presentation to Mortgagee by Mortgagor of the bills therefor, pay the Charges from such <br />deposits. In the event the deposits on hand shall not be sufficient to pay all of the Charges when <br />the same shall become due from time to time, or the prior deposits shall be less than the currently <br />estimated monthly amounts, then Mortgagor shall pay to Mortgagee on demand any amount <br />necessary to make up the deficiency. The excess of any such deposits shall be returned to <br />Mortgagor or credited towards subsequent Charges, at the discretion of Mortgagee. If an Event <br />of Default shall occur under the terms of this Mortgage, Mortgagee may, at its option, without <br />being required so to do, apply any deposits on hand to the Obligations, in such order and manner <br />as Mortgagee may elect. When the Obligations have been fully paid, any remaining deposits <br />shall be returned to Mortgagor as its interest may appear. All deposits are hereby pledged as <br />additional security for the Obligations, shall be held for the purposes for which made as herein <br />provided, may be held by Mortgagee and may be commingled with other funds of Mortgagee, <br />shall be held without any allowance of interest thereon, and shall not be subject to the decision or <br />control of Mortgagor. Mortgagee shall not be liable for any act or omission made or taken in <br />good faith. In making any payments, Mortgagee may rely on any statement, bill or estimate <br />procured from or issued by the payee without inquiry into the validity or accuracy of the same. <br />If the taxes shown in the tax statement shall be levied on property more extensive than the <br />Mortgaged Property, Mortgagee shall be under no duty to seek a tax division or apportionment of <br />the tax bill, and any payment of taxes based on a larger parcel shall be paid by Mortgagor, and <br />Mortgagor shall expeditiously cause a tax subdivision to be made. <br /> <br />1.11. Compliance with Code. Mortgagor covenants that when completed the <br />improvements to the Mortgaged Property shall comply with all applicable restrictions, <br />conditions, codes, ordinances, regulations and laws of the City of Elk River (the “City”) and <br />other governmental bodies having jurisdiction over the Mortgaged Property, including, without <br />limitation, the Americans with Disabilities Act and those related to environmental protection. <br />Mortgagor has NOT commenced construction of improvements to the Mortgaged Property. <br /> <br />Page 70 of 124