"Approved
Annual Budget")), and, promptly after preparation thereof, any revisions to such
Annual Budget. The Annual Budget shall consist of (i) an operating expense
budget showing, on a month-by-month basis, in reasonable detail, each line item
of the Borrower's anticipated operating income and operating expenses (on a cash
and accrual basis), including amounts required to establish, maintain and/or
increase any monthly payments required hereunder (and once such Annual Budget
has been approved by Lender, such operating expense budget shall be referred to
herein as the "Approved Operating Budget"), and (ii) a Capital Expense budget
showing, on a month-by-month basis, in reasonable detail, each line item of
anticipated Capital Expenses (and once such Annual Budget has been approved by
Lender, such Capital Expense budget shall be referred to herein as the "Approved
Capital Budget"). Until such time that any Annual Budget has been approved by
Lender, the prior Approved Annual Budget shall apply for all purposes hereunder
(with such adjustments as reasonably determined by Lender (including increases
for any non-discretionary expenses)).
7.
INSURANCE; CASUALTY; AND CONDEMNATION
7.1
Insurance.
7.1.1
Coverage. Borrower, at its sole cost, for the mutual benefit of
Borrower and Lender, shall obtain and maintain during the Term the following
policies of insurance:
(A)
PROPERTY INSURANCE INSURING AGAINST LOSS OR DAMAGE CUSTOMARILY INCLUDED
UNDER SO CALLED "ALL RISK" OR "SPECIAL FORM" POLICIES INCLUDING FIRE, LIGHTNING,
VANDALISM, AND MALICIOUS MISCHIEF, BOILER AND MACHINERY AND, IF REQUIRED BY
LENDER IN ACCORDANCE WITH SUBSECTIONS (B) OR (I) BELOW, FLOOD AND/OR EARTHQUAKE
COVERAGE, AND SUBJECT TO SUBSECTION (J) BELOW, COVERAGE FOR DAMAGE OR
DESTRUCTION CAUSED BY THE ACTS OF "TERRORISTS" (OR SUCH POLICIES SHALL HAVE NO
EXCLUSION FROM COVERAGE WITH RESPECT THERETO) AND SUCH OTHER INSURABLE HAZARDS
AS,
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UNDER GOOD INSURANCE PRACTICES, FROM TIME TO TIME ARE INSURED AGAINST FOR OTHER
PROPERTY AND BUILDINGS SIMILAR TO THE PREMISES IN NATURE, USE, LOCATION, HEIGHT,
AND TYPE OF CONSTRUCTION. SUCH INSURANCE POLICY SHALL ALSO INSURE FOR ORDINANCE
OF LAW COVERAGE, COSTS OF DEMOLITION AND INCREASED COST OF CONSTRUCTION IN
AMOUNTS SATISFACTORY TO LENDER. EACH SUCH INSURANCE POLICY SHALL (I) BE IN AN
AMOUNT EQUAL TO ONE HUNDRED PERCENT (100%) OF THE THEN REPLACEMENT COST OF THE
IMPROVEMENTS WITHOUT DEDUCTION FOR PHYSICAL DEPRECIATION AND IN ANY EVENT NOT
LESS THAN SUCH AMOUNT AS IS NECESSARY SO THAT THE INSURER WOULD NOT DEEM
BORROWER A CO-INSURER UNDER SUCH POLICIES, (II) HAVE DEDUCTIBLES NO GREATER THAN
$200,000 PER OCCURRENCE, (III) BE PAID ANNUALLY IN ADVANCE AND (IV) BE ON A
REPLACEMENT COST BASIS AND CONTAIN EITHER NO COINSURANCE OR, IF COINSURANCE, AN
AGREED AMOUNT ENDORSEMENT, AND SHALL COVER, WITHOUT LIMITATION, ALL TENANT
IMPROVEMENTS AND BETTERMENTS THAT BORROWER IS REQUIRED TO INSURE ON A
REPLACEMENT COST BASIS. IF THE INSURANCE REQUIRED UNDER THIS SUBPARAGRAPH IS NOT
OBTAINED BY BLANKET INSURANCE POLICIES, THE INSURANCE POLICY SHALL BE ENDORSED
TO ALSO PROVIDE GUARANTEED BUILDING REPLACEMENT COST TO THE IMPROVEMENTS AND
SUCH TENANT IMPROVEMENTS IN AN AMOUNT TO BE SUBJECT TO THE CONSENT OF LENDER,
WHICH CONSENT SHALL NOT BE