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)).
58
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 ALL
INSURANCE REQUIRED TO BE MAINTAINED UNDER EACH GROUND LEASE AND 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, 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 COSTS OF DEMOLITION AND INCREASED COST OF
CONSTRUCTION (WHICH INSURANCE FOR DEMOLITION AND INCREASED COST OF CONSTRUCTION
MAY CONTAIN A SUB-LIMIT 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 IN 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 THE LESSER OF $25,000 OR FIVE PERCENT (5%) OF THE NET OPERATING INCOME PER
OCCURRENCE, (III) BE PAID ANNUALLY IN ADVANCE AND (IV) CONTAIN AN AGREED AMOUNT
REPLACEMENT COST ENDORSEMENT WITH A WAIVER OF DEPRECIATION, AND SHALL COVER,
WITHOUT LIMITATION, ALL TENANT IMPROVEMENTS AND BETTERMENTS THAT BORROWER IS
REQUIRED TO INSURE ON A REPLACEMENT COST BASIS.
LENDER SHALL BE NAMED LOSS
PAYEE ON A STANDARD MORTGAGEE ENDORSEMENT.
(B)
FLOOD INSURANCE IF ANY PART OF THE
IMPROVEMENTS OR (WHETHER OR NOT CONSTITUTING IMPROVEMENTS) THE PAVED PARKING
AREA OR PARKING GARAGE INCLUDED IN THE PROPERTY IS NOW OR HEREAFTER LOCATED IN
AN AREA NOW OR HEREAFTER DESIGNATED BY THE FEDERAL EMERGENCY MANAGEMENT AGENCY
AS A ZONE "A" & "V" SPECIAL HAZARD AREA, OR SUCH OTHER SPECIAL HAZARD AREA IF
LENDER SO REQUIRES IN ITS SOLE DISCRETION.
SUCH POLICY SHALL (I) BE IN AN
AMOUNT EQUAL TO (A) ONE HUNDRED PERCENT (100%) OF THE FULL REPLACEMENT COST OF
THE IMPROVEMENTS ON THE PROPERTY (WITHOUT ANY DEDUCTION FOR DEPRECIATION) OR (B)
SUCH OTHER AMOUNT AS IS AGREED BY LENDER AND (II) HAVE A MAXIMUM PERMISSIBLE
DEDUCTIBLE OF $3,000.
(C)
PUBLIC LIABILITY INSURANCE, INCLUDING (I)
"COMMERCIAL GENERAL LIABILITY INSURANCE", (II) "OWNED", "HIRED" AND "NON OWNED
AUTO LIABILITY"; AND (III) UMBRELLA LIABILITY COVERAGE FOR PERSONAL INJURY,
BODILY INJURY, DEATH, ACCIDENT AND PROPERTY DAMAGE, SUCH INSURANCE