TO REDUCE THE
INSURANCE PREMIUMS PAYABLE WITH RESPECT TO SUCH STAND-ALONE TERRORISM POLICY TO
THE TERRORISM PREMIUM CAP. AS USED HEREIN, (I) "TERRORISM PREMIUM CAP" MEANS AN
AMOUNT EQUAL TO ONE HUNDRED PERCENT (100%) OF THE AGGREGATE INSURANCE PREMIUMS
PAYABLE WITH RESPECT TO ALL THE INSURANCE COVERAGE UNDER SECTION 7.1.1(A) ABOVE
FOR THE LAST POLICY YEAR IN WHICH COVERAGE FOR TERRORISM WAS INCLUDED AS PART OF
THE "ALL RISK" PROPERTY POLICY REQUIRED BY SUBSECTION (A) ABOVE, ADJUSTED
ANNUALLY BY A PERCENTAGE EQUAL TO THE INCREASE IN THE CONSUMER PRICE INDEX
(HEREINAFTER DEFINED) AND (II) "CONSUMER PRICE INDEX" MEANS THE CONSUMER PRICE
INDEX FOR ALL URBAN CONSUMERS PUBLISHED BY THE BUREAU OF LABOR STATISTICS OF THE
UNITED STATES DEPARTMENT OF LABOR, NEW YORK METROPOLITAN STATISTICAL AREA, ALL
ITEMS (1982-84 = 100), OR ANY SUCCESSOR INDEX THERETO,
55
APPROXIMATELY ADJUSTED, AND IN THE EVENT THAT THE CONSUMER PRICE INDEX IS
CONVERTED TO A DIFFERENT STANDARD REFERENCE BASE OR OTHERWISE REVISED, THE
DETERMINATION OF ADJUSTMENTS PROVIDED FOR HEREIN SHALL BE MADE WITH THE USE OF
SUCH CONVERSION FACTOR, FORMULA OR TABLE FOR CONVERTING THE CONSUMER PRICE INDEX
AS MAY BE PUBLISHED BY THE BUREAU OF LABOR STATISTICS OR, IF SAID BUREAU SHALL
NOT PUBLISH THE SAME, THEN WITH THE USE OF SUCH CONVERSION FACTOR, FORMULA OR
TABLE AS MAY BE PUBLISHED BY PRENTICE-HALL, INC., OR ANY OTHER NATIONALLY
RECOGNIZED PUBLISHER OF SIMILAR STATISTICAL INFORMATION; AND IF THE CONSUMER
PRICE INDEX CEASES TO BE PUBLISHED, AND THERE IS NO SUCCESSOR THERETO (I) SUCH
OTHER INDEX AS LENDER AND BORROWER SHALL AGREE UPON IN WRITING OR (II) IF LENDER
AND BORROWER CANNOT AGREE ON A SUBSTITUTE INDEX, SUCH OTHER INDEX, AS REASONABLY
SELECTED BY LENDER. BORROWER SHALL OBTAIN THE COVERAGE REQUIRED UNDER THIS
SUBSECTION (J) FROM A CARRIER WHICH OTHERWISE SATISFIES THE RATING CRITERIA
SPECIFIED IN SECTION 7.1.2 BELOW (A "QUALIFIED CARRIER") OR IN THE EVENT THAT
SUCH COVERAGE IS NOT AVAILABLE FROM A QUALIFIED CARRIER, BORROWER SHALL OBTAIN
SUCH COVERAGE FROM THE HIGHEST RATED INSURANCE COMPANY PROVIDING SUCH COVERAGE.
7.1.2
POLICIES. ALL POLICIES OF INSURANCE (THE "POLICIES") REQUIRED
PURSUANT TO SECTION 7.1.1 ABOVE SHALL: (I) BE ISSUED BY COMPANIES APPROVED BY
LENDER AND LICENSED TO DO BUSINESS IN THE STATE, WITH A CLAIMS PAYING ABILITY
RATING OF "A" OR BETTER BY S&P (AND THE EQUIVALENT BY ANY OTHER RATING AGENCY),
AND A RATING OF "A:VIII" OR BETTER IN THE CURRENT BEST'S INSURANCE REPORTS,
PROVIDED, HOWEVER, THAT FOR MULTI-LAYERED POLICIES, (A) IF THERE ARE 4 OR FEWER
INSURERS PROVIDING SUCH POLICIES, THEN AT LEAST 75% OF THE ENTIRE AMOUNT OF THE
APPLICABLE INSURANCE COVERAGE PROVIDED UNDER SUCH POLICIES SHALL BE ISSUED BY
INSURERS HAVING MINIMUM CLAIMS PAYING ABILITY RATINGS OF "A" OR BETTER BY S&P
(AND THE EQUIVALENT BY ANY OTHER RATING AGENCY) AND NO INSURER PROVIDING ANY
PORTION OF SUCH COVERAGE SHALL HAVE A MINIMUM CLAIMS PAYING ABILITY RATING LOWER
THAN "BBB" BY S&P (OR LOWER THAN THE EQUIVALENT BY ANY OTHER RATING AGENCY), AND
(B) IF THERE ARE 5 OR MORE INSURERS