DOES NOT MATERIALLY
IMPAIR THE UTILITY AND OPERATION OF THE PROPERTY OR MATERIALLY REDUCE THE VALUE
OF THE PROPERTY OR THE NET OPERATING INCOME OF THE PROPERTY.
ARTICLE VI
INSURANCE; CASUALTY; CONDEMNATION
SECTION 6.1
INSURANCE.
(A)
BORROWER SHALL OBTAIN AND MAINTAIN INSURANCE FOR BORROWER AND THE
PROPERTY PROVIDING AT LEAST THE FOLLOWING COVERAGES:
(I)
COMPREHENSIVE ALL RISK INSURANCE ON THE IMPROVEMENTS AND THE
PERSONAL PROPERTY, INCLUDING CONTINGENT LIABILITY FROM OPERATION OF BUILDING
LAWS, DEMOLITION COSTS AND INCREASED COST OF CONSTRUCTION ENDORSEMENTS, IN EACH
CASE (A) IN AN AMOUNT EQUAL TO ONE HUNDRED PERCENT (100%) OF THE "FULL
REPLACEMENT COST," WHICH FOR PURPOSES OF THIS LOAN AGREEMENT SHALL MEAN ACTUAL
REPLACEMENT VALUE (EXCLUSIVE OF COSTS OF EXCAVATIONS, FOUNDATIONS, UNDERGROUND
UTILITIES AND FOOTINGS) WITH A WAIVER
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OF DEPRECIATION; (B) CONTAINING AN AGREED AMOUNT ENDORSEMENT WITH RESPECT TO THE
IMPROVEMENTS AND PERSONAL PROPERTY WAIVING ALL CO-INSURANCE PROVISIONS; (C)
PROVIDING FOR NO DEDUCTIBLE IN EXCESS OF TWENTY-FIVE THOUSAND AND NO/100 DOLLARS
($25,000.00) FOR ALL SUCH INSURANCE COVERAGE; AND (D) CONTAINING AN "ORDINANCE
OR LAW COVERAGE" OR "ENFORCEMENT" ENDORSEMENT IF ANY OF THE IMPROVEMENTS OR THE
USE OF THE PROPERTY SHALL AT ANY TIME CONSTITUTE LEGAL NON-CONFORMING STRUCTURES
OR USES. IN ADDITION, BORROWER SHALL OBTAIN: (Y) IF ANY PORTION OF THE
IMPROVEMENTS IS CURRENTLY OR AT ANY TIME IN THE FUTURE LOCATED IN A FEDERALLY
DESIGNATED "SPECIAL FLOOD HAZARD AREA", FLOOD HAZARD INSURANCE IN AN AMOUNT
EQUAL TO THE LESSER OF (1) THE OUTSTANDING PRINCIPAL BALANCE OF THE NOTE OR (2)
THE MAXIMUM AMOUNT OF SUCH INSURANCE AVAILABLE UNDER THE NATIONAL FLOOD
INSURANCE ACT OF 1968, THE FLOOD DISASTER PROTECTION ACT OF 1973 OR THE NATIONAL
FLOOD INSURANCE REFORM ACT OF 1994, AS EACH MAY BE AMENDED OR SUCH GREATER
AMOUNT AS LENDER SHALL REQUIRE; AND (Z) EARTHQUAKE INSURANCE IN AMOUNTS AND IN
FORM AND SUBSTANCE SATISFACTORY TO LENDER IN THE EVENT THE PROPERTY IS LOCATED
IN AN AREA WITH A HIGH DEGREE OF SEISMIC ACTIVITY, PROVIDED THAT THE INSURANCE
PURSUANT TO CLAUSES (Y) AND (Z) HEREOF SHALL BE ON TERMS CONSISTENT WITH THE
COMPREHENSIVE ALL RISK INSURANCE POLICY REQUIRED UNDER THIS SUBSECTION (I).
(II)
COMMERCIAL GENERAL LIABILITY INSURANCE AGAINST CLAIMS FOR
PERSONAL INJURY, BODILY INJURY, DEATH OR PROPERTY DAMAGE OCCURRING UPON, IN OR
ABOUT THE PROPERTY, SUCH INSURANCE (A) TO BE ON THE SO-CALLED "OCCURRENCE" FORM
WITH ONE MILLION AND NO/100 DOLLARS ($1,000,000.00) COVERAGE PER OCCURRENCE, TWO
MILLION AND NO/100 DOLLARS ($2,000,000.00) COVERAGE IN THE AGGREGATE AND A
COMBINED LIMIT, INCLUDING UMBRELLA COVERAGE, OF NOT LESS THAN FIVE MILLION AND
NO/100 DOLLARS ($5,000,000.00); (B) TO CONTINUE AT NOT LESS THAN THE AFORESAID
LIMIT UNTIL REQUIRED TO BE CHANGED BY LENDER IN WRITING BY REASON OF CHANGED
ECONOMIC CONDITIONS MAKING SUCH PROTECTION INADEQUATE; AND (C) TO COVER AT LEAST
THE FOLLOWING HAZARDS:
(1) PREMISES AND OPERATIONS; (2) PRODUCTS AND COMPLETED
OPERATIONS ON AN "IF ANY" BASIS; (3) INDEPENDENT CONTRACTORS; (4) BLANKET
CONTRACTUAL LIABILITY FOR ALL LEGAL CONTRACTS; AND (5) CONTRACTUAL LIABILITY
COVERING THE INDEMNITIES CONTAINED IN ARTICLE 9 OF THE MORTGAGE TO THE