IN PART OF THE INDEBTEDNESS, ALL
RIGHT, TITLE AND INTEREST OF BORROWER IN AND TO THE POLICIES THAT ARE NOT
BLANKET POLICIES THEN IN FORCE CONCERNING THE PROPERTY AND ALL PROCEEDS PAYABLE
THEREUNDER SHALL THEREUPON VEST IN THE PURCHASER AT SUCH FORECLOSURE OR LENDER
OR OTHER TRANSFEREE IN THE EVENT OF SUCH OTHER TRANSFER OF TITLE.
6.1.9
CAPTIVE INSURANCE COMPANY.
(B)
NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN
SECTION 6.1.1, THE TERRORISM POLICY REQUIRED PURSUANT TO SECTION 6.1.1(C)(IV)
MAY BE ISSUED BY A CAPTIVE INSURANCE COMPANY WHOLLY-OWNED AND CONTROLLED BY AN
AFFILIATE OF BORROWER (A "CAPTIVE INSURANCE COMPANY)"; PROVIDED THAT:
(I)
UNLESS LENDER AGREES OTHERWISE IN WRITING, TRIA SHALL BE IN FULL
FORCE AND EFFECT;
(II)
EXCEPT WITH RESPECT TO THE DEDUCTIBLE PERMITTED HEREUNDER,
THOSE COVERED LOSSES WHICH ARE NOT REINSURED BY THE FEDERAL GOVERNMENT UNDER
TRIA AND PAYABLE DIRECTLY TO THE INSURED SHALL BE REINSURED BY AN INSURANCE
COMPANY WHICH SATISFIES THE REQUIREMENTS OF SECTION 6.1.2;
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(III)
ALL RE-INSURANCE AGREEMENTS BETWEEN SUCH CAPTIVE INSURANCE
COMPANY AND ALL SUCH RE-INSURANCE COMPANIES PROVIDING THE REFERENCED
RE-INSURANCE SHALL BE REASONABLY ACCEPTABLE TO LENDER AND BORROWER SHALL USE
COMMERCIALLY REASONABLE EFFORTS TO CAUSE SUCH RE-INSURANCE AGREEMENTS TO PROVIDE
FOR DIRECT ACCESS TO SUCH RE-INSURERS BY ALL NAMED INSUREDS, LOSS PAYEES AND
MORTGAGEES WHICH SUCH INSURANCE BENEFITS;
(IV)
SUCH CAPTIVE INSURANCE COMPANY SHALL NOT BE THE SUBJECT OF
BANKRUPTCY OR SIMILAR INSOLVENCY PROCEEDING;
(V)
SUCH CAPTIVE INSURANCE COMPANY SHALL BE PROHIBITED FROM
CONDUCTING ANY BUSINESS OTHER THAN THE ISSUANCE OF TERRORISM INSURANCE POLICIES
AND ANY OTHER CONTEMPLATED INSURANCE COVERAGE REASONABLY APPROVED BY LENDER FOR
PROPERTIES IN WHICH AFFILIATES OF GUARANTOR HAVE AN OWNERSHIP INTEREST EQUAL TO
OR GREATER THAN 50%.
(VI)
SUCH CAPTIVE INSURANCE COMPANY SHALL BE LICENSED IN THE STATE
OF VERMONT AND QUALIFIED TO ISSUE THE TERRORISM POLICY IN ACCORDANCE WITH ALL
LEGAL REQUIREMENTS;
(VII)
SUCH CAPTIVE INSURANCE COMPANY SHALL QUALIFY FOR THE REINSURANCE
AND OTHER BENEFITS AFFORDED INSURANCE COMPANIES UNDER TRIA AND SHALL MAINTAIN
MINIMUM REINSURANCE OF NOT LESS THAN FIFTEEN PERCENT (15%) OF THE INSURED RISK
TO THE EXTENT COMMERCIALLY AVAILABLE;
(VIII)
NO GOVERNMENTAL AUTHORITY SHALL HAVE ISSUED ANY STATEMENT,
OPINION, FINDING OR DECREE THAT ANY INSURANCE COMPANY WHICH IS SIMILAR TO SUCH
CAPTIVE INSURANCE COMPANY (I.E., AN INSURANCE OWNED AND/OR CONTROLLED BY A
PERSON INSURED UNDER AN APPLICABLE INSURANCE POLICY) DOES NOT QUALIFY FOR SUCH
BENEFITS;
(IX)
LENDER SHALL HAVE RECEIVED EACH OF THE FOLLOWING, EACH OF WHICH
SHALL BE ACCEPTABLE TO LENDER:
(A)
THE ORGANIZATIONAL DOCUMENTS OF SUCH CAPTIVE INSURANCE COMPANY;
(B)
ANY REGULATORY AGREEMENTS OF SUCH CAPTIVE INSURANCE COMPANY;
(C)
THE APPLICATION FOR LICENSING IN THE STATE OF VERMONT FOR SUCH
CAPTIVE INSURANCE COMPANY;
(D)
THE FORM OF THE POLICY TO BE USED BY SUCH CAPTIVE INSURANCE
COMPANY TO PROVIDE THE INSURANCE COVERAGE DESCRIBED HEREIN;
(E)
A DESCRIPTION OF THE STRUCTURE AND AMOUNT OF RESERVES AND
CAPITALIZATION OF SUCH CAPTIVE INSURANCE COMPANY;
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(X)
THE INSURANCE PREMIUMS PAYABLE TO SUCH CAPTIVE INSURANCE
COMPANY SHALL BE BASED ON MARKET CONDITIONS BASED ON THE PREMIUMS