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PREPAYMENT. Unless otherwise provided in this Contract, Purchaser shall have the right to fully or partially prepay this
<br />Contract at any time without penalty. Any partial prepayment shall be applied first to payment of amounts then due under this
<br />Contract, including unpaid accrued interest, and the balance shall be applied to the principal installments to be paid in the
<br />inverse order of their maturity. Partial prepayment shall not postpone the due date of the installments to be paid pursuant to
<br />this Contract or change the amount of such installments.
<br />6. REAL ESTATE TAXES AND ASSESSMENTS. Real estate taxes and installments of special assessments which are due and
<br />payable in the year in which this Contract is dated shall be paid as follows: [If the transaction closes in 2006, this section
<br />will be completed to indicate that Seller is responsible for the payment of all real estate taxes and installments of
<br />special assessments which are due and payable in the year in which the Contract is dated. If the transaction closes in
<br />2007, this section shall be completed to indicate that Purchaser is responsible for the payment of all real estate and
<br />installments of special assessments which are due and payable in the year in which this Contract is dated (although
<br />Seller will be responsible to reimburse Purchaser, at closing, for a prorate share of the 2007 real estate taxes and
<br />installments of special assessments per the Purchase Agreement.]
<br />Purchase shall pay, before penalty accrues, all real estate taxes and installments of special assessments assessed against the
<br />Property which are due and payable in all subsequent years. Seller warrants that the real estate taxes and installments of
<br />special assessments which were due and payable in the years preceding the year in which this Contract is dated are paid in
<br />full. If the Property is subject to a recorded declaration providing for assessments to be levied against the Property by an
<br />owners' association, Purchaser shall promptly pay, when due, all assessments imposed by the owners' association or other
<br />governing body as required by the provisions of the declaration or other related documents.
<br />PROPERTY INSURANCE.
<br />(a) INSURED RISKS AND AMOUNTS. Purchaser shall keep all buildings, improvements and fixtures now or later
<br />located on or a part of the Property 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
<br />extended coverage insurance policy, including, without limitation, vandalism, malicious mischief, burglary, theft
<br />and, if applicable, steam boiler explosion. Such insurance shall be in an amount no less than the full replacement
<br />cost of the buildings, improvements and fixtures, without deduction for physical depreciation. If any of the
<br />buildings, improvements or fixtures are located in a federally designated flood prone area, and if flood insurance is
<br />available for that area, Purchaser shall procure and maintain flood insurance in amounts reasonably satisfactory to
<br />Seller.
<br />(b) OTHER TERMS. The insurance policy shall contain a loss payable clause in favor of Seller which provides that
<br />Seller's right to recover under the insurance shall not be impaired by any acts or omissions of Purchaser or Seller,
<br />and that Seller shall otherwise be afforded all rights and privileges customarily provided a mortgagee under the so-
<br />called standard mortgage clause.
<br />(c) NOTICE OF DAMAGE. In the event of damage to the Property by fire or other casualty, Purchaser shall promptly
<br />give notice of such damage to Seller and the insurance company.
<br />DAMAGE TO THE PROPERTY.
<br />(a) APPLICATION OF INSURANCE PROCEEDS. If the Property is damaged by fire or other casualty, the insurance
<br />proceeds paid on account of such damage shall be applied to payment of the amounts payable by Purchaser under
<br />this Contract, even if such amounts are not then due to be paid, unless Purchaser makes a permitted election
<br />described in the next paragraph. Such amounts shall be first applied to unpaid accrued interest and next to the
<br />installments to be paid as provided in this Contract in the inverse order of their maturity. Such payment shall not
<br />postpone the due date of the installments to be paid pursuant to this Contract or change the amount of such
<br />installments. The balance of insurance proceeds, if any, shall be the property of Purchaser.
<br />(b) PURCHASER'S ELECTION TO REBUILD. If Purchaser is not in default under this Contract, or after curing any
<br />such default, and if the mortgagees in any prior mortgages and sellers in any prior contracts fur deed do not require
<br />otherwise, Purchaser may elect to have that portion of such insurance proceeds necessary to repair, replace or restore
<br />the damaged Property (the "Repairs") deposited in escrow with a bank or title insurance company qualified to do
<br />business in the State of Minnesota, or such other party as may be mutually agreeable to Seller and Purchaser. The
<br />election may only be made by written notice to Seller within sixty days after the damage occurs. Also, the election
<br />will only be permitted if the plans and specifications and contracts for the Repairs are approved by Seller, which
<br />approval Seller shall not unreasonably withhold or delay. If such a permitted election is made by Purchaser, Seller
<br />and Purchaser shall jointly deposit, when paid, such insurance proceeds into such escrow. If such insurance proceeds
<br />are insufficient fur the Repairs, Purchaser shall, before the commencement of the Repairs, deposit into such escrow
<br />sufficient additional money to insure the full payment for the Repairs. Even if the insurance proceeds are
<br />unavailable or are insufficient to pay the cost of the Repairs, Purchaser shall at all times be responsible to pay the
<br />full cost of the Repairs. All escrowed funds shall be disbursed by the escrowee in accordance with generally
<br />accepted sound construction disbursement procedures. The costs incurred or to be incurred un account of such
<br />escrow shall be deposited by Purchaser into such escrow before the commencement of the Repairs- Purchaser shall
<br />complete the Repairs as soon as reasonably possible and in a good and workmanlike manner, and in any event the
<br />Repairs shall be completed by Purchaser within one year after the damage occurs. If, following the completion of
<br />and payment for the Repairs, there remains any undisbursed escrow funds, such funds shall be applied to payment of
<br />the amounts payable by Purchaser under this Contract in accordance with paragraph 8(a) above.
<br />(c) OWNERS' ASSOCIATION. If the Property is subject to a recorded declaration, so long as the owners' association
<br />maintains a master or blanket policy of insurance against fire, extended coverage perils and such other hazards and
<br />in such amount as are required by this Contract, then: (i) Purchaser's obligation in the Contract to maintain hazard
<br />insurance coverage on the Property is satisfied; (ii) the provisions of paragraph 8(a) of this Contract regarding
<br />application of insurance proceeds shall be superseded by the provisions of the declaration or other related
<br />documents; and (iii) in the event of a distribution of insurance proceeds in lieu of restoration or repair following an
<br />insured casualty loss to the Property, any such proceeds payable to Purchaser are hereby assigned and shall be paid
<br />to Seller fur application to the sum secured by this Contract, with the excess, if any, paid to Purchaser.
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