FOLLOWING
CASUALTY IS OTHERWISE PERMITTED UNDER SUCH ZONING REGULATIONS NOTWITHSTANDING
SUCH NONCONFORMITY;
(H)
IF REQUIRED BY LENDER AS A RESULT OF ANY
MORTGAGED PROPERTY BEING LOCATED IN AN AREA WITH A HIGH DEGREE OF SEISMIC
ACTIVITY, EARTHQUAKE DAMAGE INSURANCE IN AN AMOUNT AND FORM ACCEPTABLE TO
LENDER;
(I)
SUCH OTHER INSURANCE AS MAY FROM TIME TO
TIME BE REASONABLY REQUIRED BY LENDER IN ORDER TO PROTECT ITS INTERESTS WITH
RESPECT TO THE LOAN AND THE MORTGAGED PROPERTY AND TO CONFORM SUCH REQUIREMENTS
TO THEN CURRENT STANDARDS FOR A SECONDARY MARKET TRANSACTION.
(III)
ALL POLICIES OF INSURANCE (THE "POLICIES")
REQUIRED PURSUANT TO THIS SECTION 5.1(X):
(A)
SHALL BE ISSUED BY AN INSURER APPROVED BY
LENDER WHICH HAS A CLAIMS PAYING ABILITY RATING OF NOT LESS THAN "AA" (OR THE
EQUIVALENT) BY RATING AGENCIES SATISFACTORY TO LENDER (ONE OF WHICH SHALL BE
S&P) AND A:XIII OR BETTER AS TO CLAIMS PAYING ABILITY BY AM BEST, PROVIDED, THAT
NOTWITHSTANDING THE FOREGOING, (1) IN THE EVENT AMERICAN MODERN INSURANCE SHALL
BE THE INSURER PROVIDING THE STANDARD ALL-RISK INSURANCE POLICY, THEN SUCH
INSURER SHALL NOT BE REQUIRED TO SATISFY SUCH CLAIMS PAYING ABILITY RATING BY
THE RATING AGENCIES (BUT WILL BE REQUIRED TO HAVE AND MAINTAIN A CLAIMS PAYING
ABILITY RATING BY AM BEST OF A+:VIII OR BETTER), SO LONG AS THE BORROWER
DELIVERS TO THE LENDER EVIDENCE REASONABLY SATISFACTORY TO THE LENDER THAT THE
INSURER HAS PURCHASED REINSURANCE WITH RESPECT TO NOT LESS THAN 70% OF SUCH
POLICY FROM A REINSURER WITH A CLAIMS PAYING ABILITY RATING BY THE RATING
AGENCIES OF NOT LESS THAN "A" (OR THE EQUIVALENT) BY RATING AGENCIES
SATISFACTORY TO THE LENDER (ONE OF WHICH SHALL BE S&P) AND (2) THE INSURER
PROVIDING THE WORKER'S COMPENSATION INSURANCE COVERAGE SHALL ONLY BE REQUIRED TO
MAINTAIN A CLAIMS PAYING ABILITY RATING OF NOT LESS THAN "A" (OR THE EQUIVALENT)
BY RATING AGENCIES SATISFACTORY TO THE LENDER (ONE OF WHICH SHALL BE S&P),
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(B)
SHALL NAME LENDER AS AN ADDITIONAL INSURED
AND CONTAIN A STANDARD NONCONTRIBUTORY MORTGAGEE CLAUSE AND A LENDER'S LOSS
PAYABLE ENDORSEMENT, OR THEIR EQUIVALENTS, NAMING LENDER (AND/OR SUCH OTHER
PARTY AS MAY BE DESIGNATED BY LENDER) AS THE PARTY TO WHICH ALL PAYMENTS MADE BY
SUCH INSURANCE COMPANY SHALL BE PAID,
(C)
SHALL BE MAINTAINED THROUGHOUT THE TERM OF
THE LOAN WITHOUT COST TO LENDER,
(D)
SHALL CONTAIN SUCH PROVISIONS AS LENDER DEEMS
REASONABLY NECESSARY OR DESIRABLE TO PROTECT ITS INTEREST (INCLUDING, WITHOUT
LIMITATION, ENDORSEMENTS PROVIDING THAT NEITHER BORROWER, LENDER NOR ANY OTHER
PARTY SHALL BE A CO-INSURER UNDER SAID POLICIES AND THAT LENDER SHALL RECEIVE AT
LEAST THIRTY (30) DAYS PRIOR WRITTEN NOTICE OF ANY MODIFICATION, REDUCTION OR
CANCELLATION),
(E)
SHALL CONTAIN A WAIVER OF SUBROGATION
AGAINST LENDER,
(F)
SHALL BE FOR A TERM OF NOT LESS THAN ONE
YEAR,
(G)
SHALL PROVIDE FOR CLAIMS TO BE MADE ON AN
OCCURRENCE BASIS,
(H)
SHALL CONTAIN AN AGREED VALUE CLAUSE UPDATED
ANNUALLY (IF THE AMOUNT OF COVERAGE UNDER SUCH POLICY IS BASED UPON THE
REPLACEMENT COST OF THE