Insurance; Restoration Following Casualty. 2.5.1. Until the indebtedness secured hereby is paid in full, the Trustor shall at its own expense at all times maintain or cause to be maintained on all of the Mortgaged Premises (a) comprehensive general liability insurance, including umbrella liability insurance, covering all claims for bodily injury, including death, and property damage occurring on, in or about the Mortgaged Premises in an aggregate amount of not less than Five Million Dollars ($5,000,000) per occurrence, and a single limit of not less than Two Million Dollars ($2,000,000) per person and per occurrence for personal injury, bodily injury and property damage; the policy shall have no deductible or self insured retention requirements; the policy limits of such insurance, if requested by the Beneficiary, shall be increased from time to time to reflect what a reasonably prudent owner or lessee of buildings or improvements similar in type and locality to the Mortgaged Premises would carry; during any period of substantial alterations or improvements in, on or to the Mortgaged Premises, the Trustor will cause the comprehensive general liability insurance, including umbrella liability insurance, endorsed to provide owners' and contractors' protective liability coverage, including completed operations liability coverage; (b) physical damage insurance (all risk non-reporting property insurance, including earthquake insurance, with the Beneficiary named as loss payee), covering the Mortgaged Premises for loss or damages resulting from the perils of fire, lightning, earthquake, and such other risks and hazards as are provided under the current standard "Extended Coverage Endorsement" and vandalism and malicious mischief coverage, for the full replacement value of the Mortgaged Premises on a stipulated and agreed-amount basis; (c) if the Mortgaged Premises is in an area identified as a flood hazard area by the Secretary of Housing and Urban Development, flood insurance, to the extent obtainable, in an amount equal to the lesser of the full replacement value of the Mortgaged Premises or the maximum amount available under the Federal flood insurance program; (d) boiler and machinery insurance covering all boilers, machinery, air conditioning, pressure vessels, and similar type equipment commonly covered under a broad-form boiler and machinery policy, in an amount satisfactory to the Beneficiary; (e) insurance against such other risks of damage, hazards, casualties and contingencies in such amounts as the Beneficiary shall from time to time reasonably require, provided that insurance against such FRK11622.A05 285741572 01/09/97 KDF: (a) shall be paid solely to the Beneficiary and be held, applied or disbursed by the Beneficiary as provided in SECTIONS 2.5.7 and 2.5.8. 2.5.2. All insurance required in SECTION 2.5.1 shall be evidenced by valid and enforceable policies, in form and substance as shall be required by the Beneficiary from time to time, and issued by and distributed among insurers of recognized responsibility having an A.M. Best's Guide of A:XII or better, a financial size category of Class XI or above, and the total limit of liability shall not exceed ten percent (10%) of the total policyholders' surplus. Such insurers shall be authorized to do business in the State and in all other respects shall be reasonably satisfactory to the Beneficiary. The originals of all such policies, or duplicate copies or certificates thereof, shall be delivered to the Beneficiary concurrently with the execution and delivery of this Trust Deed. Thereafter, all renewal or replacement policies, or duplicate copies or certificates thereof, shall be delivered to the Beneficiary not less than thirty (30) days prior to the expiration date of the policy or policies to be renewed or replaced, in each case accompanied by evidence reasonably satisfactory to the Beneficiary that all premiums currently payable with respect to such policies have been paid in full by or at the direction of the Trustor. 2.5.3. All such insurance policies shall (a) except for any liability policy required hereunder, FRK11622.A05 285741572 01/09/97 KDF: contain a standard noncontributory form of mortgagee clause (in favor of and entitling the Beneficiary to collect any and all proceeds payable under such insurance), as well as a standard waiver of subrogation endorsement, all to be in form and substance reasonably satisfactory to the Beneficiary; (b) provide that such policies may not be cancelled or amended without at least thirty (30) days prior written notice to the Beneficiary; and (c) provide that no act, omission or negligence of the Trustor, or its agents, servants or employees, or of any Space Tenant under any Space Lease, which might otherwise result in a forfeiture of such insurance or any part thereof, shall in any way affect the validity or enforceability of such insurance insofar as the Beneficiary is concerned. The Trustor shall not carry separate insurance, concurrent in kind or form or contributing in the event of loss with any insurance required under this SECTION 2.5. All losses under such insurance policies shall be adjusted by the Trustor in the case of any single instance of such damage or destruction not exceeding $200,000, by the Trustor and the Beneficiary in the case of any such single instance of damage or destruction exceeding such amount, provided that in no event shall the Trustor approve or consent to any final adjustment in any amount exceeding the amount specified above in this sentence without obtaining the Beneficiary's prior approval (which approval shall not be unreasonably withheld) of the amount of such adjustment, and solely by the Beneficiary in the case when an Event of Default exists and is continuing. 2.5.4. The Trustor, at its expense, will furnish to the Beneficiary, within ninety (90) days after written demand, but in no event, except for reasonable cause, more frequently than annually, proof of the then full replacement value of each of the Improvements and the Building Service Equipment and Furnishings therein, such proof to be by appraisals reasonably satisfactory in form and substance to the Beneficiary and prepared by an appraiser (who may be an appraiser for the insurance company insuring such property) designated and paid for by the Trustor and approved by the Beneficiary, which approval shall not be unreasonably withheld or delayed. 2.5.5. If the Beneficiary shall, by any means, acquire the title or estate of the Trustor in or to any portion of the Mortgaged Premises, it shall thereupon become the sole and absolute owner of all insurance policies affecting such portion of the Mortgaged Premises held by, or required hereunder to be delivered to, the Beneficiary, with the sole right to collect and retain all unearned premiums thereon; and the Trustor shall be entitled only to a credit FRK11622.A05 285741572 01/09/97 KDF: in reduction of the then outstanding indebtedness secured hereby in the amount of the short rate cancellation refund, when and if received by Beneficiary. The Trustor agrees, immediately upon demand, to execute and deliver such assignments or other authorizations or instruments as may, in the reasonable opinion of the Beneficiary, be reasonably necessary or desirable to effectuate any of the provisions of this SECTION 2.5.5. 2.5.6. If any of the Improvements, Building Service Equipment or Furnishings shall be damaged or destroyed, in whole or in part, by fire or other casualty, the Trustor shall give prompt notice thereof to the Beneficiary, and, without regard to the availability or adequacy of insurance proceeds, shall promptly following receipt of any insurance proceeds or the date when any such proceeds are made available to the Trustor in accordance with the terms hereof, commence to restore, replace, rebuild or alter the same as nearly as possible to the condition, character and value thereof existing immediately prior to such damage or destruction. Any insurance proceeds in respect of such damage or destruction, or any Award (as defined in SECTION 3.2) for a partial taking which is not a substantial or total taking, as such terms are referred to in ARTICLE III hereof, at the option of the Beneficiary, may either (i) be applied as a prepayment of the unpaid balance of the principal of the Note and of accrued and unpaid interest thereon and as a payment of any other sums due and owing under the Note, the Loan Agreement and the Security Documents, or (ii) be made available to pay or reimburse costs incurred for restoration, replacement or rebuilding necessitated as a result of such damage or destruction, or as a result of such taking, as the case may be, or (iii) be used for any other purpose or object deemed appropriate by the Beneficiary in connection with the Mortgaged Premises, provided, however, that the Beneficiary may not elect either option (i) or (iii) above if, and for so long as all of the following conditions (collectively, the "Insurance or Award Conditions" have been and remain satisfied: (a) no Event of Default has occurred and is continuing or would occur as a result of such casualty or taking and no event has occurred that with the passage of time or the giving of notice, or both, would constitute an Event of Default; (b) the balance of the insurance proceeds or such Award either initially paid to the Beneficiary or deposited with the Depository (as hereinafter defined) or remaining from time to time, shall be sufficient, in the Beneficiary's reasonable judgment, to complete the restoration, replacement or rebuilding, or the Trustor shall have deposited such sufficient funds with the Beneficiary or the Depository; and (c) the Beneficiary FRK11622.A05 285741572 01/09/97 KDF: determines, in its reasonable discretion, that (i) the Loan to Value Ratio (as defined in the Loan Agreement, and taking into consideration the value of all of the Projects, as defined in the Loan Agreement) is not greater than 55%, and (ii) the Debt Service Coverage Ratio (as defined in the Loan Agreement, and taking into consideration the loss of income resulting from such damage or destruction as projected by the Beneficiary in its reasonable discretion) is not less than 1.40:1.0. Notwithstanding the foregoing, if an event has occurred and is continuing that with the passage of time or the giving of notice, or both, would constitute an Event of Default but the same has not yet matured into an Event of Default, then, if the conditions set forth in the foregoing clauses (b) and (c) have been or will be, in the Beneficiary's reasonable judgment, satisfied, the Beneficiary shall not elect either option (i) or (iii) unless such event shall have matured into an Event of Default and, unless and until such event shall have so matured into an Event of Default or such event has been cured or shall otherwise cease to exist, the Beneficiary (or the Depository) shall not release any such insurance proceeds or Award and the same shall be held until an Event of Default occurs or the Default has been cured or shall otherwise cease to exist. 2.5.7. Any such insurance proceeds (other than the proceeds of the rent insurance policy, which shall be paid as provided in SECTION 2.5.8 below) or Award which are to be applied to restoration, replacement or rebuilding of the Mortgaged Premises shall, after payment or reimbursement to the Beneficiary of all reasonable costs and expenses of the Beneficiary in collecting such proceeds or Award, be applied upon satisfaction of the following provisions and conditions: (a) If the damage be of such nature as to require the Trustor to construct a replacement for, or to alter in any material or substantial way, the damaged or destroyed items, the Trustor shall, before commencing any such work, submit copies of the plans and specifications therefor to the Beneficiary for the Beneficiary's approval, such approval to not be unreasonably withheld or delayed. (b) If after payment or reimbursement to the Beneficiary of all costs and expenses of the Beneficiary in collecting such insurance proceeds or Award, the aggregate insurance proceeds or Award received by reason of any single instance of such damage or destruction or condemnation, as the case may FRK11622.A05 285741572 01/09/97 KDF: be, shall be $200,000 or less such insurance proceeds or Award shall be paid to the Trustor, which shall hold all amounts so received in trust for application first to pay the entire cost of restoring, repairing, rebuilding or replacing the damaged or destroyed items, before any portion of such proceeds may be used or applied for any other purpose. If the aggregate net insurance proceeds or Award by reason of any single instance of such damage or destruction or condemnation, as the case may be, shall be more than $200,000 such sums shall be held and disbursed by Fleet Bank, National Association or, if this Trust Deed is held by another financial institution, by such financial institution or, if this Trust Deed is not held by a financial institution, by a financial institution selected by the then Beneficiary (the holder of such monies, the "Depository") in accordance with the following provisions of this SECTION 2.5.7. (c) The Beneficiary shall have received as to each such disbursement a certificate of the Trustor (i) requesting the payment of a specified amount of such insurance or condemnation proceeds; (ii) describing in reasonable detail the work and materials applied to the restoration, replacement or rebuilding of the damaged, destroyed or taken Improvement, or Building Service Equipment and/or Furnishings located therein, since the date of the last such certificate; (iii) stating that the requested amount does not exceed the cost of such work and materials; and (iv) stating that a request for payment for such work and materials has not previously been made, accompanied by: 1. a certificate of an independent engineer or architect designated by the Trustor, who shall have been approved in writing by the Beneficiary (such approval not to be unreasonably withheld), stating (i) that the work and materials described in the accompanying certificate of the Trustor were satisfactorily performed and furnished and were necessary, appropriate or desirable to the restoration, replacement or rebuilding of the damaged, destroyed or taken Improvement, or Building Service Equipment and/or Furnishings; (ii) that the amount specified in such certificate of the Trustor does not exceed the reasonable cost of such work and materials; and (iii) the FRK11622.A05 285741572 01/09/97 KDF: additional amount, if any, required to complete the restoration, replacement or rebuilding of the damaged, destroyed or taken Improvement, Building Service Equipment and/or Furnishings; and
Appears in 1 contract
Insurance; Restoration Following Casualty. 2.5.1. Until the indebtedness secured hereby is paid in full, the Trustor Mortgagor shall at its own expense at all times maintain or cause to be maintained on all of the Mortgaged Premises (a) comprehensive general liability insurance, including umbrella liability insurance, covering all claims for bodily injury, including death, and property damage occurring on, in or about the Mortgaged Premises in an aggregate amount of not less than Five Million Dollars ($5,000,000) per occurrence, and a single limit of not less than Two Million Dollars ($2,000,000) per person and per occurrence for personal injury, bodily injury and property damage; the policy shall have no deductible or self insured retention requirements; the policy limits of such insurance, if requested by the BeneficiaryMortgagee, shall be increased from time to time to reflect what a reasonably prudent owner or lessee of buildings or improvements similar in type and locality to the Mortgaged Premises would carry; during any period of substantial alterations or improvements in, on or to the Mortgaged Premises, the Trustor Mortgagor will cause the comprehensive general liability insurance, including umbrella liability insurance, endorsed to provide owners' and contractors' protective liability coverage, including completed operations liability coverage; (b) physical damage insurance (all risk non-reporting property insurance, including earthquake insurance, with the Beneficiary Mortgagee named as loss payee), covering the Mortgaged Premises for loss or damages resulting from the perils of fire, lightning, earthquake, and such other risks and hazards as are provided under the current standard "Extended Coverage Endorsement" and vandalism and malicious mischief coverage, for the full replacement value of the Mortgaged Premises on a stipulated and agreed-amount basis; (c) if the Mortgaged Premises is in an area identified as a flood hazard area by the Secretary of Housing and Urban Development, flood insurance, to the extent obtainable, in an amount equal to the lesser of the full replacement value of the Mortgaged Premises or the maximum amount available under the Federal flood insurance program; (d) boiler and machinery insurance covering all boilers, machinery, air conditioning, pressure vessels, and similar type equipment commonly covered under a broad-form boiler and machinery policy, in an amount satisfactory to the Beneficiary; (e) insurance against such other risks of damage, hazards, casualties and contingencies in such amounts as the Beneficiary shall from time to time reasonably require, provided that insurance against such FRK11622.A05 FRK11497.A15 285741572 01/09/97 12/05/96 KDF:ac1
(a) shall be paid solely to the Beneficiary Mortgagee and be held, applied or disbursed by the Beneficiary Mortgagee as provided in SECTIONS 2.5.7 and 2.5.8.
2.5.2. All insurance required in SECTION 2.5.1 shall be evidenced by valid and enforceable policies, in form and substance as shall be required by the Beneficiary Mortgagee from time to time, and issued by and distributed among insurers of recognized responsibility having an A.M. Best's Guide of A:XII or better, a financial size category of Class XI or above, and the total limit of liability shall not exceed ten percent (10%) of the total policyholders' surplus. Such insurers shall be authorized to do business in the State and in all other respects shall be reasonably satisfactory to the BeneficiaryMortgagee. The originals of all such policies, or duplicate copies or certificates thereof, shall be delivered to the Beneficiary Mortgagee concurrently with the execution and delivery of this Trust DeedMortgage. Thereafter, all renewal or replacement policies, or duplicate copies or certificates thereof, shall be delivered to the Beneficiary Mortgagee not less than thirty (30) days prior to the expiration date of the policy or policies to be renewed or replaced, in each case accompanied by evidence reasonably satisfactory to the Beneficiary FRK11497.A15 285741572 12/05/96 KDF:ac1 Mortgagee that all premiums currently payable with respect to such policies have been paid in full by or at the direction of the TrustorMortgagor.
2.5.3. All such insurance policies shall (a) except for any liability policy required hereunder, FRK11622.A05 285741572 01/09/97 KDF: contain a standard noncontributory form of mortgagee clause (in favor of and entitling the Beneficiary Mortgagee to collect any and all proceeds payable under such insurance), as well as a standard waiver of subrogation endorsement, all to be in form and substance reasonably satisfactory to the BeneficiaryMortgagee; (b) provide that such policies may not be cancelled or amended without at least thirty (30) days prior written notice to the BeneficiaryMortgagee; and (c) provide that no act, omission or negligence of the TrustorMortgagor, or its agents, servants or employees, or of any Space Tenant under any Space Lease, which might otherwise result in a forfeiture of such insurance or any part thereof, shall in any way affect the validity or enforceability of such insurance insofar as the Beneficiary Mortgagee is concerned. The Trustor Mortgagor shall not carry separate insurance, concurrent in kind or form or contributing in the event of loss with any insurance required under this SECTION 2.5. All losses under such insurance policies shall be adjusted by the Trustor Mortgagor in the case of any single instance of such damage or destruction not exceeding $200,000, by the Trustor Mortgagor and the Beneficiary Mortgagee in the case of any such single instance of damage or destruction exceeding such amount, provided that in no event shall the Trustor Mortgagor approve or consent to any final adjustment in any amount exceeding the amount specified above in this sentence without obtaining the BeneficiaryMortgagee's prior approval (which approval shall not be unreasonably withheld) of the amount of such adjustment, and solely by the Beneficiary Mortgagee in the case when an Event of Default exists and is continuing.
2.5.4. The TrustorMortgagor, at its expense, will furnish to the BeneficiaryMortgagee, within ninety (90) days after written demand, but in no event, except for reasonable cause, more frequently than annually, proof of the then full replacement value of each of the Improvements and the Building Service Equipment and Furnishings therein, such proof to be by appraisals reasonably satisfactory in form and substance to the Beneficiary Mortgagee and prepared by an appraiser (who may be an appraiser for the insurance company insuring such property) designated and paid for by the Trustor Mortgagor and approved by the BeneficiaryMortgagee, which approval shall not be unreasonably withheld or delayed.
2.5.5. If the Beneficiary Mortgagee shall, by any means, acquire the title or estate of the Trustor Mortgagor in or to any portion of the Mortgaged Premises, it shall thereupon FRK11497.A15 285741572 12/05/96 KDF:ac1 become the sole and absolute owner of all insurance policies affecting such portion of the Mortgaged Premises held by, or required hereunder to be delivered to, the BeneficiaryMortgagee, with the sole right to collect and retain all unearned premiums thereon; and the Trustor Mortgagor shall be entitled only to a credit FRK11622.A05 285741572 01/09/97 KDF: in reduction of the then outstanding indebtedness secured hereby in the amount of the short rate cancellation refund, when and if received by BeneficiaryMortgagee. The Trustor Mortgagor agrees, immediately upon demand, to execute and deliver such assignments or other authorizations or instruments as may, in the reasonable opinion of the BeneficiaryMortgagee, be reasonably necessary or desirable to effectuate any of the provisions of this SECTION 2.5.5.
2.5.6. If any of the Improvements, Building Service Equipment or Furnishings shall be damaged or destroyed, in whole or in part, by fire or other casualty, the Trustor Mortgagor shall give prompt notice thereof to the BeneficiaryMortgagee, and, without regard to the availability or adequacy of insurance proceeds, shall promptly following receipt of any insurance proceeds or the date when any such proceeds are made available to the Trustor Mortgagor in accordance with the terms hereof, commence to restore, replace, rebuild or alter the same as nearly as possible to the condition, character and value thereof existing immediately prior to such damage or destruction. Any insurance proceeds in respect of such damage or destruction, or any Award (as defined in SECTION 3.2) for a partial taking which is not a substantial or total taking, as such terms are referred to in ARTICLE III hereof, at the option of the BeneficiaryMortgagee, may either (i) be applied as a prepayment of the unpaid balance of the principal of the Note and of accrued and unpaid interest thereon and as a payment of any other sums due and owing under the Note, the Loan Agreement and the Security Documents, or (ii) be made available to pay or reimburse costs incurred for restoration, replacement or rebuilding necessitated as a result of such damage or destruction, or as a result of such taking, as the case may be, or (iii) be used for any other purpose or object deemed appropriate by the Beneficiary Mortgagee in connection with the Mortgaged Premises, provided, however, that the Beneficiary Mortgagee may not elect either option (i) or (iii) above if, and for so long as all of the following conditions (collectively, the "Insurance or Award Conditions" have been and remain satisfied: (a) no Event of Default has occurred and is continuing or would occur as a result of such casualty or taking and no event has occurred that with the passage of time or the giving of notice, or both, would constitute an Event of Default; (b) the balance of the insurance proceeds or such Award either initially paid to the Beneficiary Mortgagee or deposited with the Depository (as hereinafter defined) or remaining from time to time, shall be sufficient, in the BeneficiaryMortgagee's reasonable judgment, to FRK11497.A15 285741572 12/05/96 KDF:ac1 complete the restoration, replacement or rebuilding, or the Trustor Mortgagor shall have deposited such sufficient funds with the Beneficiary Mortgagee or the Depository; and (c) the Beneficiary FRK11622.A05 285741572 01/09/97 KDF: Mortgagee determines, in its reasonable discretion, that (i) the Loan to Value Ratio (as defined in the Loan Agreement, and taking into consideration the value of all of the Projects, as defined in the Loan Agreement) is not greater than 55%, and (ii) the Debt Service Coverage Ratio (as defined in the Loan Agreement, and taking into consideration the loss of income resulting from such damage or destruction as projected by the Beneficiary Mortgagee in its reasonable discretion) is not less than 1.40:1.0. Notwithstanding the foregoing, if an event has occurred and is continuing that with the passage of time or the giving of notice, or both, would constitute an Event of Default but the same has not yet matured into an Event of Default, then, if the conditions set forth in the foregoing clauses (b) and (c) have been or will be, in the BeneficiaryMortgagee's reasonable judgment, satisfied, the Beneficiary Mortgagee shall not elect either option (i) or (iii) unless such event shall have matured into an Event of Default and, unless and until such event shall have so matured into an Event of Default or such event has been cured or shall otherwise cease to exist, the Beneficiary Mortgagee (or the Depository) shall not release any such insurance proceeds or Award and the same shall be held until an Event of Default occurs or the Default has been cured or shall otherwise cease to exist.
2.5.7. Any such insurance proceeds (other than the proceeds of the rent insurance policy, which shall be paid as provided in SECTION 2.5.8 below) or Award which are to be applied to restoration, replacement or rebuilding of the Mortgaged Premises shall, after payment or reimbursement to the Beneficiary Mortgagee of all reasonable costs and expenses of the Beneficiary Mortgagee in collecting such proceeds or Award, be applied upon satisfaction of the following provisions and conditions:
(a) If the damage be of such nature as to require the Trustor Mortgagor to construct a replacement for, or to alter in any material or substantial way, the damaged or destroyed items, the Trustor Mortgagor shall, before commencing any such work, submit copies of the plans and specifications therefor to the Beneficiary Mortgagee for the BeneficiaryMortgagee's approval, such approval to not be unreasonably withheld or delayed.
(b) If after payment or reimbursement to the Beneficiary Mortgagee of all costs and expenses of the Beneficiary Mortgagee in collecting such insurance proceeds or Award, the aggregate insurance proceeds or Award received by reason of any single instance of such damage or destruction or condemnation, as the case may FRK11622.A05 FRK11497.A15 285741572 01/09/97 12/05/96 KDF: :ac1 be, shall be $200,000 or less such insurance proceeds or Award shall be paid to the TrustorMortgagor, which shall hold all amounts so received in trust for application first to pay the entire cost of restoring, repairing, rebuilding or replacing the damaged or destroyed items, before any portion of such proceeds may be used or applied for any other purpose. If the aggregate net insurance proceeds or Award by reason of any single instance of such damage or destruction or condemnation, as the case may be, shall be more than $200,000 such sums shall be held and disbursed by Fleet Bank, National Association or, if this Trust Deed Mortgage is held by another financial institution, by such financial institution or, if this Trust Deed Mortgage is not held by a financial institution, by a financial institution selected by the then Beneficiary Mortgagee (the holder of such monies, the "Depository") in accordance with the following provisions of this SECTION 2.5.7.
(c) The Beneficiary Mortgagee shall have received as to each such disbursement a certificate of the Trustor Mortgagor (i) requesting the payment of a specified amount of such insurance or condemnation proceeds;
(ii) describing in reasonable detail the work and materials applied to the restoration, replacement or rebuilding of the damaged, destroyed or taken Improvement, or Building Service Equipment and/or Furnishings located therein, since the date of the last such certificate; (iii) stating that the requested amount does not exceed the cost of such work and materials; and (iv) stating that a request for payment for such work and materials has not previously been made, accompanied by:
1. a certificate of an independent engineer or architect designated by the Trustor, who shall have been approved in writing by the Beneficiary (such approval not to be unreasonably withheld), stating (i) that the work and materials described in the accompanying certificate of the Trustor were satisfactorily performed and furnished and were necessary, appropriate or desirable to the restoration, replacement or rebuilding of the damaged, destroyed or taken Improvement, or Building Service Equipment and/or Furnishings; (ii) that the amount specified in such certificate of the Trustor does not exceed the reasonable cost of such work and materials; and (iii) the FRK11622.A05 285741572 01/09/97 KDF: additional amount, if any, required to complete the restoration, replacement or rebuilding of the damaged, destroyed or taken Improvement, Building Service Equipment and/or Furnishings; and
Appears in 1 contract
Samples: Mortgage, Assignment of Leases and Rents and Security Agreement (Corporate Realty Income Fund I L P)
Insurance; Restoration Following Casualty. 2.5.1. Until the indebtedness secured hereby is Obligations are paid in full, the Trustor Mortgagor shall at its own expense at all times maintain or cause to be maintained on all of the Mortgaged Premises (a) comprehensive general liability insurance, including umbrella liability insurance, covering all claims for bodily injury, including death, and property damage occurring on, in or about the Mortgaged Premises in an aggregate amount of not less than Five Million Dollars ($5,000,000) per occurrence, and a 13,600,000 combined single limit of not less than Two Million Dollars ($2,000,000) per person and per occurrence for personal injury, bodily injury and property damage; the policy shall have no deductible or self insured retention requirements; the policy limits of such insurance, if requested by the BeneficiaryMortgagee, shall be increased from time to time to reflect what a reasonably prudent owner or lessee of buildings or improvements similar in type and locality to the Mortgaged Premises would carry; during any period of substantial alterations or improvements in, on or to the Mortgaged Premises, the Trustor Mortgagor will cause the comprehensive general liability insurance, including umbrella liability insurance, endorsed to provide owners' and contractors' protective liability coverage, including completed operations liability coverage; (b) physical damage insurance (all risk non-reporting property insurance, including earthquake insurance, with the Beneficiary named as loss payee), covering the Mortgaged Premises for loss or damages resulting from the perils of fire, lightning, earthquake, lightning and such other risks and hazards as are provided under the current standard "Extended Coverage Endorsement" and vandalism and malicious mischief coverage, for the full replacement value of the Mortgaged Premises on a stipulated and agreed-amount basis; (c) if the Mortgaged Premises is in an area identified as a flood hazard area by the Secretary of Housing and Urban Development, flood insurance, to the extent obtainable, in an amount equal to the lesser of the full replacement value of the Mortgaged Premises or the maximum amount available under the Federal flood insurance program; (d) boiler and machinery insurance covering all boilers, machinery, air conditioning, pressure vessels, and similar type equipment commonly covered under a broad-form boiler and machinery policy, in an amount satisfactory to the BeneficiaryMortgagee; (e) insurance against such other risks of damage, hazards, casualties and contingencies in such amounts as the Beneficiary Mortgagee shall from time to time reasonably require, provided that insurance against such FRK11622.A05 285741572 01/09/97 KDF:other risks, hazards,
(a) shall be paid solely to the Beneficiary Mortgagee and be held, applied or disbursed by the Beneficiary Mortgagee as provided in SECTIONS Sections 2.5.7 and 2.5.8.
2.5.2. All insurance required in SECTION Section 2.5.1 shall be evidenced by valid and enforceable policies, in form and substance as shall be required by the Beneficiary from time to timesubstance, and issued by and distributed among insurers of recognized responsibility having an A.M. a Best's Guide rating of A:XII A or better, better and a financial size category of Class XI IX or above, and as shall be required by the total limit of liability shall not exceed ten percent (10%) of the total policyholders' surplusMortgagee from time to time. Such insurers shall be authorized to do business in the State and in all other respects shall be reasonably satisfactory to the BeneficiaryMortgagee. The originals of all such policies, or duplicate copies or certificates thereof, shall be delivered to the Beneficiary Mortgagee concurrently with the execution and delivery of this Trust DeedMortgage. Thereafter, all renewal or replacement policies, or duplicate copies or certificates thereof, shall be delivered to the Beneficiary Mortgagee not less than thirty (30) days prior to the expiration date of the policy or policies to be renewed or replaced, in each case accompanied by evidence reasonably satisfactory to the Beneficiary Mortgagee that all premiums currently payable with respect to such policies have been paid in full by or at the direction of the TrustorMortgagor.
2.5.3. All such insurance policies shall (a) except for any liability policy required hereunder, FRK11622.A05 285741572 01/09/97 KDF: contain a standard noncontributory form of mortgagee clause (in favor of and entitling the Beneficiary Mortgagee to collect any and all proceeds payable under such insurance), as well as a standard waiver of subrogation endorsement, all to be in form and substance reasonably satisfactory to the BeneficiaryMortgagee; (b) provide that such policies may not be cancelled or amended without at least thirty (30) days days', prior written notice to the BeneficiaryMortgagee; and (c) provide that no act, omission or negligence of the TrustorMortgagor, or its agents, servants or employees, or of any Space Tenant under any Space Lease, which might otherwise result in a forfeiture of such insurance or any part thereof, shall in any way affect the validity or enforceability of such insurance insofar as the Beneficiary Mortgagee is concerned. The Trustor Mortgagor shall not carry separate insurance, concurrent in kind or form or contributing in the event of loss with any insurance required under this SECTION Section 2.5. All losses under such insurance policies shall be adjusted by the Trustor Mortgagor in the case of any single instance of such damage or destruction not exceeding $200,0001,000,000, by the Trustor Mortgagor and the Beneficiary Mortgagee in the case of any such single instance of damage or destruction exceeding such amount, provided that in no event shall the Trustor Mortgagor approve or consent to any final adjustment in any amount exceeding the amount specified above in this sentence without obtaining the BeneficiaryMortgagee's prior approval (which approval shall not be unreasonably withheld) of the amount of such adjustment, and solely by the Beneficiary Mortgagee in the case when an Event of Default exists and is continuing.
2.5.4. The Trustor, at its expense, will furnish to the Beneficiary, within ninety (90) days after written demand, but in no event, except for reasonable cause, more frequently than annually, proof of the then full replacement value of each of the Improvements and the Building Service Equipment and Furnishings therein, such proof to be by appraisals reasonably satisfactory in form and substance to the Beneficiary and prepared by an appraiser (who may be an appraiser for the insurance company insuring such property) designated and paid for by the Trustor and approved by the Beneficiary, which approval shall not be unreasonably withheld or delayed.
2.5.5. If the Beneficiary shall, by any means, acquire the title or estate of the Trustor in or to any portion of the Mortgaged Premises, it shall thereupon become the sole and absolute owner of all insurance policies affecting such portion of the Mortgaged Premises held by, or required hereunder to be delivered to, the Beneficiary, with the sole right to collect and retain all unearned premiums thereon; and the Trustor shall be entitled only to a credit FRK11622.A05 285741572 01/09/97 KDF: in reduction of the then outstanding indebtedness secured hereby in the amount of the short rate cancellation refund, when and if received by Beneficiary. The Trustor agrees, immediately upon demand, to execute and deliver such assignments or other authorizations or instruments as may, in the reasonable opinion of the Beneficiary, be reasonably necessary or desirable to effectuate any of the provisions of this SECTION 2.5.5.
2.5.6. If any of the Improvements, Building Service Equipment or Furnishings shall be damaged or destroyed, in whole or in part, by fire or other casualty, the Trustor shall give prompt notice thereof to the Beneficiary, and, without regard to the availability or adequacy of insurance proceeds, shall promptly following receipt of any insurance proceeds or the date when any such proceeds are made available to the Trustor in accordance with the terms hereof, commence to restore, replace, rebuild or alter the same as nearly as possible to the condition, character and value thereof existing immediately prior to such damage or destruction. Any insurance proceeds in respect of such damage or destruction, or any Award (as defined in SECTION 3.2) for a partial taking which is not a substantial or total taking, as such terms are referred to in ARTICLE III hereof, at the option of the Beneficiary, may either (i) be applied as a prepayment of the unpaid balance of the principal of the Note and of accrued and unpaid interest thereon and as a payment of any other sums due and owing under the Note, the Loan Agreement and the Security Documents, or (ii) be made available to pay or reimburse costs incurred for restoration, replacement or rebuilding necessitated as a result of such damage or destruction, or as a result of such taking, as the case may be, or (iii) be used for any other purpose or object deemed appropriate by the Beneficiary in connection with the Mortgaged Premises, provided, however, that the Beneficiary may not elect either option (i) or (iii) above if, and for so long as all of the following conditions (collectively, the "Insurance or Award Conditions" have been and remain satisfied: (a) no Event of Default has occurred and is continuing or would occur as a result of such casualty or taking and no event has occurred that with the passage of time or the giving of notice, or both, would constitute an Event of Default; (b) the balance of the insurance proceeds or such Award either initially paid to the Beneficiary or deposited with the Depository (as hereinafter defined) or remaining from time to time, shall be sufficient, in the Beneficiary's reasonable judgment, to complete the restoration, replacement or rebuilding, or the Trustor shall have deposited such sufficient funds with the Beneficiary or the Depository; and (c) the Beneficiary FRK11622.A05 285741572 01/09/97 KDF: determines, in its reasonable discretion, that (i) the Loan to Value Ratio (as defined in the Loan Agreement, and taking into consideration the value of all of the Projects, as defined in the Loan Agreement) is not greater than 55%, and (ii) the Debt Service Coverage Ratio (as defined in the Loan Agreement, and taking into consideration the loss of income resulting from such damage or destruction as projected by the Beneficiary in its reasonable discretion) is not less than 1.40:1.0. Notwithstanding the foregoing, if an event has occurred and is continuing that with the passage of time or the giving of notice, or both, would constitute an Event of Default but the same has not yet matured into an Event of Default, then, if the conditions set forth in the foregoing clauses (b) and (c) have been or will be, in the Beneficiary's reasonable judgment, satisfied, the Beneficiary shall not elect either option (i) or (iii) unless such event shall have matured into an Event of Default and, unless and until such event shall have so matured into an Event of Default or such event has been cured or shall otherwise cease to exist, the Beneficiary (or the Depository) shall not release any such insurance proceeds or Award and the same shall be held until an Event of Default occurs or the Default has been cured or shall otherwise cease to exist.
2.5.7. Any such insurance proceeds (other than the proceeds of the rent insurance policy, which shall be paid as provided in SECTION 2.5.8 below) or Award which are to be applied to restoration, replacement or rebuilding of the Mortgaged Premises shall, after payment or reimbursement to the Beneficiary of all reasonable costs and expenses of the Beneficiary in collecting such proceeds or Award, be applied upon satisfaction of the following provisions and conditions:
(a) If the damage be of such nature as to require the Trustor to construct a replacement for, or to alter in any material or substantial way, the damaged or destroyed items, the Trustor shall, before commencing any such work, submit copies of the plans and specifications therefor to the Beneficiary for the Beneficiary's approval, such approval to not be unreasonably withheld or delayed.
(b) If after payment or reimbursement to the Beneficiary of all costs and expenses of the Beneficiary in collecting such insurance proceeds or Award, the aggregate insurance proceeds or Award received by reason of any single instance of such damage or destruction or condemnation, as the case may FRK11622.A05 285741572 01/09/97 KDF: be, shall be $200,000 or less such insurance proceeds or Award shall be paid to the Trustor, which shall hold all amounts so received in trust for application first to pay the entire cost of restoring, repairing, rebuilding or replacing the damaged or destroyed items, before any portion of such proceeds may be used or applied for any other purpose. If the aggregate net insurance proceeds or Award by reason of any single instance of such damage or destruction or condemnation, as the case may be, shall be more than $200,000 such sums shall be held and disbursed by Fleet Bank, National Association or, if this Trust Deed is held by another financial institution, by such financial institution or, if this Trust Deed is not held by a financial institution, by a financial institution selected by the then Beneficiary (the holder of such monies, the "Depository") in accordance with the following provisions of this SECTION 2.5.7.
(c) The Beneficiary shall have received as to each such disbursement a certificate of the Trustor (i) requesting the payment of a specified amount of such insurance or condemnation proceeds;
(ii) describing in reasonable detail the work and materials applied to the restoration, replacement or rebuilding of the damaged, destroyed or taken Improvement, or Building Service Equipment and/or Furnishings located therein, since the date of the last such certificate; (iii) stating that the requested amount does not exceed the cost of such work and materials; and (iv) stating that a request for payment for such work and materials has not previously been made, accompanied by:
1. a certificate of an independent engineer or architect designated by the Trustor, who shall have been approved in writing by the Beneficiary (such approval not to be unreasonably withheld), stating (i) that the work and materials described in the accompanying certificate of the Trustor were satisfactorily performed and furnished and were necessary, appropriate or desirable to the restoration, replacement or rebuilding of the damaged, destroyed or taken Improvement, or Building Service Equipment and/or Furnishings; (ii) that the amount specified in such certificate of the Trustor does not exceed the reasonable cost of such work and materials; and (iii) the FRK11622.A05 285741572 01/09/97 KDF: additional amount, if any, required to complete the restoration, replacement or rebuilding of the damaged, destroyed or taken Improvement, Building Service Equipment and/or Furnishings; and
Appears in 1 contract
Samples: Mortgage and Security Agreement (Acadia Realty Trust)
Insurance; Restoration Following Casualty. 2.5.1. Until the indebtedness secured hereby is paid in full, the Trustor Mortgagor shall at its own expense at all times maintain or cause to be maintained on all of the Mortgaged Premises (a) comprehensive general liability insurance, including umbrella liability insurance, covering all claims for bodily injury, including death, and property damage occurring on, in or about the Mortgaged Premises in an aggregate amount of not less than Five Million Dollars ($5,000,000) per occurrence, and a single limit of not less than Two Million Dollars ($2,000,000) per person and per occurrence for personal injury, bodily injury and property damage; the policy shall have no deductible or self insured retention requirements; the policy limits of FRK11624.A05 285741572 01/09/97 KDF: such insurance, if requested by the BeneficiaryMortgagee, shall be increased from time to time to reflect what a reasonably prudent owner or lessee of buildings or improvements similar in type and locality to the Mortgaged Premises would carry; during any period of substantial alterations or improvements in, on or to the Mortgaged Premises, the Trustor Mortgagor will cause the comprehensive general liability insurance, including umbrella liability insurance, endorsed to provide owners' and contractors' protective liability coverage, including completed operations liability coverage; (b) physical damage insurance (all risk non-reporting property insurance, including earthquake insurance, with the Beneficiary Mortgagee named as loss payee), covering the Mortgaged Premises for loss or damages resulting from the perils of fire, lightning, earthquake, and such other risks and hazards as are provided under the current standard "Extended Coverage Endorsement" and vandalism and malicious mischief coverage, for the full replacement value of the Mortgaged Premises on a stipulated and agreed-amount basis; (c) if the Mortgaged Premises is in an area identified as a flood hazard area by the Secretary of Housing and Urban Development, flood insurance, to the extent obtainable, in an amount equal to the lesser of the full replacement value of the Mortgaged Premises or the maximum amount available under the Federal flood insurance program; (d) boiler and machinery insurance covering all boilers, machinery, air conditioning, pressure vessels, and similar type equipment commonly covered under a broad-form boiler and machinery policy, in an amount satisfactory to the BeneficiaryMortgagee; (e) insurance against such other risks of damage, hazards, casualties and contingencies in such amounts as the Beneficiary Mortgagee shall from time to time reasonably require, provided that insurance against such FRK11622.A05 285741572 01/09/97 KDF:
(a) other risks, hazards, casualties or contingencies shall then be paid solely to the Beneficiary and be held, applied commonly carried by prudent owners or disbursed by the Beneficiary as provided in SECTIONS 2.5.7 and 2.5.8.
2.5.2. All insurance required in SECTION 2.5.1 shall be evidenced by valid and enforceable policies, in form and substance as shall be required by the Beneficiary from time to time, and issued by and distributed among insurers lessees of recognized responsibility having an A.M. Best's Guide of A:XII building or better, a financial size category of Class XI or above, and the total limit of liability shall not exceed ten percent (10%) of the total policyholders' surplus. Such insurers shall be authorized to do business improvements in the State locality similar in character, construction, use and in all other respects shall be reasonably satisfactory occupancy to the Beneficiary. The originals of all such policies, or duplicate copies or certificates thereof, shall be delivered to the Beneficiary concurrently with the execution and delivery of this Trust Deed. Thereafter, all renewal or replacement policies, or duplicate copies or certificates thereof, shall be delivered to the Beneficiary not less than thirty (30) days prior to the expiration date of the policy or policies to be renewed or replaced, in each case accompanied by evidence reasonably satisfactory to the Beneficiary that all premiums currently payable with respect to such policies have been paid in full by or at the direction of the Trustor.
2.5.3. All such insurance policies shall (a) except for any liability policy required hereunder, FRK11622.A05 285741572 01/09/97 KDF: contain a standard noncontributory form of mortgagee clause (in favor of and entitling the Beneficiary to collect any and all proceeds payable under such insurance), as well as a standard waiver of subrogation endorsement, all to be in form and substance reasonably satisfactory to the Beneficiary; (b) provide that such policies may not be cancelled or amended without at least thirty (30) days prior written notice to the Beneficiary; and (c) provide that no act, omission or negligence of the Trustor, or its agents, servants or employees, or of any Space Tenant under any Space Lease, which might otherwise result in a forfeiture of such insurance or any part thereof, shall in any way affect the validity or enforceability of such insurance insofar as the Beneficiary is concerned. The Trustor shall not carry separate insurance, concurrent in kind or form or contributing in the event of loss with any insurance required under this SECTION 2.5. All losses under such insurance policies shall be adjusted by the Trustor in the case of any single instance of such damage or destruction not exceeding $200,000, by the Trustor and the Beneficiary in the case of any such single instance of damage or destruction exceeding such amount, provided that in no event shall the Trustor approve or consent to any final adjustment in any amount exceeding the amount specified above in this sentence without obtaining the Beneficiary's prior approval (which approval shall not be unreasonably withheld) of the amount of such adjustment, and solely by the Beneficiary in the case when an Event of Default exists and is continuing.
2.5.4. The Trustor, at its expense, will furnish to the Beneficiary, within ninety (90) days after written demand, but in no event, except for reasonable cause, more frequently than annually, proof of the then full replacement value of each of the Improvements and the Building Service Equipment and Furnishings therein, such proof to be by appraisals reasonably satisfactory in form and substance to the Beneficiary and prepared by an appraiser (who may be an appraiser for the insurance company insuring such property) designated and paid for by the Trustor and approved by the Beneficiary, which approval shall not be unreasonably withheld or delayed.
2.5.5. If the Beneficiary shall, by any means, acquire the title or estate of the Trustor in or to any portion of the Mortgaged Premises, it shall thereupon become the sole and absolute owner of all insurance policies affecting such portion of the Mortgaged Premises held by, or required hereunder to be delivered to, the Beneficiary, with the sole right to collect and retain all unearned premiums thereon; and the Trustor shall be entitled only to a credit FRK11622.A05 285741572 01/09/97 KDF: in reduction of the then outstanding indebtedness secured hereby in the amount of the short rate cancellation refund, when and if received by Beneficiary. The Trustor agrees, immediately upon demand, to execute and deliver such assignments or other authorizations or instruments as may, in the reasonable opinion of the Beneficiary, be reasonably necessary or desirable to effectuate any of the provisions of this SECTION 2.5.5.
2.5.6. If any of the Improvements, Building Service Equipment and Furnishings on, or Furnishings shall be damaged or destroyed, in whole or in part, by fire or other casualtyconstituting a part of, the Trustor shall give prompt notice thereof Mortgaged Premises; and (f) loss of rents/business interruption coverage in an amount sufficient to the Beneficiarypay all Impositions, andinsurance premiums, without regard to the availability or adequacy of insurance proceeds, shall promptly following receipt of any insurance proceeds or the date when any such proceeds are made available to the Trustor in accordance with the terms hereof, commence to restore, replace, rebuild or alter the same as nearly as possible to the condition, character interest and value thereof existing immediately prior to such damage or destruction. Any insurance proceeds in respect of such damage or destruction, or any Award (as defined in SECTION 3.2) for a partial taking which is not a substantial or total taking, as such terms are referred to in ARTICLE III hereof, at the option of the Beneficiary, may either (i) be applied as a prepayment of the unpaid balance of the principal of installments and all other amounts due under the Note and of accrued and unpaid interest thereon and as a payment of any other sums due and owing under the Note, the Loan Agreement and the Security Documents, or (ii) be made available to pay or reimburse costs incurred for restoration, replacement or rebuilding necessitated as a result normal operating expenses of such damage or destruction, or as a result of such taking, as the case may be, or (iii) be used for any other purpose or object deemed appropriate by the Beneficiary in connection with the Mortgaged Premises, provided, however, that the Beneficiary may not elect either option all for a period of one (i1) or (iii) above if, and for so long as all of the following conditions (collectivelyyear. Furthermore, the "Insurance or Award Conditions" have been and remain satisfied: (a) no Event of Default has occurred and is continuing or would occur as a result of Mortgagee reserves the right to require additional insurance and/or higher policy limits than heretofore specified if such casualty or taking and no event has occurred that with the passage of time or the giving of noticeadditional insurance and/or higher policy limits are commercially reasonable for similar properties, or both, would constitute an Event of Default; (b) the balance of the insurance proceeds or such Award either initially paid which right may be exercised by written notice to the Beneficiary or deposited with the Depository (Mortgagor, and, as hereinafter defined) or remaining from time to timesoon thereafter as practicable, shall be sufficient, but in the Beneficiary's reasonable judgment, to complete the restoration, replacement or rebuilding, or the Trustor shall have deposited such sufficient funds with the Beneficiary or the Depository; and (c) the Beneficiary FRK11622.A05 any event within FRK11624.A05 285741572 01/09/97 KDF: determines, in its reasonable discretion, that (i) the Loan to Value Ratio (as defined in the Loan Agreement, and taking into consideration the value of all of the Projects, as defined in the Loan Agreement) is not greater than 55%, and (ii) the Debt Service Coverage Ratio (as defined in the Loan Agreement, and taking into consideration the loss of income resulting from such damage or destruction as projected by the Beneficiary in its reasonable discretion) is not less than 1.40:1.0. Notwithstanding the foregoing, if an event has occurred and is continuing that with the passage of time or the giving of notice, or both, would constitute an Event of Default but the same has not yet matured into an Event of Default, then, if the conditions set forth in the foregoing clauses (b) and (c) have been or will be, in the Beneficiary's reasonable judgment, satisfied, the Beneficiary shall not elect either option (i) or (iii) unless such event shall have matured into an Event of Default and, unless and until such event shall have so matured into an Event of Default or such event has been cured or shall otherwise cease to exist, the Beneficiary (or the Depository) shall not release any such insurance proceeds or Award and the same shall be held until an Event of Default occurs or the Default has been cured or shall otherwise cease to exist.
2.5.7. Any such insurance proceeds (other than the proceeds of the rent insurance policy, which shall be paid as provided in SECTION 2.5.8 below) or Award which are to be applied to restoration, replacement or rebuilding of the Mortgaged Premises shall, after payment or reimbursement to the Beneficiary of all reasonable costs and expenses of the Beneficiary in collecting such proceeds or Award, be applied upon satisfaction of the following provisions and conditions:
(a) If the damage be of such nature as to require the Trustor to construct a replacement for, or to alter in any material or substantial way, the damaged or destroyed items, the Trustor shall, before commencing any such work, submit copies of the plans and specifications therefor to the Beneficiary for the Beneficiary's approval, such approval to not be unreasonably withheld or delayed.
(b) If after payment or reimbursement to the Beneficiary of all costs and expenses of the Beneficiary in collecting such insurance proceeds or Award, the aggregate insurance proceeds or Award received by reason of any single instance of such damage or destruction or condemnation, as the case may FRK11622.A05 285741572 01/09/97 KDF: be, shall be $200,000 or less such insurance proceeds or Award shall be paid to the Trustor, which shall hold all amounts so received in trust for application first to pay the entire cost of restoring, repairing, rebuilding or replacing the damaged or destroyed items, before any portion of such proceeds may be used or applied for any other purpose. If the aggregate net insurance proceeds or Award by reason of any single instance of such damage or destruction or condemnation, as the case may be, shall be more than $200,000 such sums shall be held and disbursed by Fleet Bank, National Association or, if this Trust Deed is held by another financial institution, by such financial institution or, if this Trust Deed is not held by a financial institution, by a financial institution selected by the then Beneficiary (the holder of such monies, the "Depository") in accordance with the following provisions of this SECTION 2.5.7.
(c) The Beneficiary shall have received as to each such disbursement a certificate of the Trustor (i) requesting the payment of a specified amount of such insurance or condemnation proceeds;
(ii) describing in reasonable detail the work and materials applied to the restoration, replacement or rebuilding of the damaged, destroyed or taken Improvement, or Building Service Equipment and/or Furnishings located therein, since the date of the last such certificate; (iii) stating that the requested amount does not exceed the cost of such work and materials; and (iv) stating that a request for payment for such work and materials has not previously been made, accompanied by:
1. a certificate of an independent engineer or architect designated by the Trustor, who shall have been approved in writing by the Beneficiary (such approval not to be unreasonably withheld), stating (i) that the work and materials described in the accompanying certificate of the Trustor were satisfactorily performed and furnished and were necessary, appropriate or desirable to the restoration, replacement or rebuilding of the damaged, destroyed or taken Improvement, or Building Service Equipment and/or Furnishings; (ii) that the amount specified in such certificate of the Trustor does not exceed the reasonable cost of such work and materials; and (iii) the FRK11622.A05 285741572 01/09/97 KDF: additional amount, if any, required to complete the restoration, replacement or rebuilding of the damaged, destroyed or taken Improvement, Building Service Equipment and/or Furnishings; and
Appears in 1 contract
Samples: Mortgage, Assignment of Leases and Rents and Security Agreement (Corporate Realty Income Fund I L P)
Insurance; Restoration Following Casualty. 2.5.1. Until the indebtedness secured hereby is paid in full, the Trustor shall at its own expense at all times maintain or cause to be maintained on all of the Mortgaged Premises (a) comprehensive general liability insurance, including umbrella liability insurance, covering all claims for bodily injury, including death, and property damage occurring on, in or about the Mortgaged Premises in an aggregate amount of not less than Five Million Dollars ($5,000,000) per occurrence, and a single limit of not less than Two Million Dollars ($2,000,000) per person and per occurrence for personal injury, bodily injury and property damage; the policy shall have no deductible or self insured retention requirements; the policy limits of such insurance, if requested by the Beneficiary, shall be increased from time to time to reflect what a reasonably prudent owner or lessee of buildings or improvements similar in type and locality to the Mortgaged Premises would carry; during any period of substantial alterations or improvements in, on or to the Mortgaged Premises, the Trustor will cause the comprehensive general liability insurance, including umbrella liability insurance, endorsed to provide owners' and contractors' protective liability coverage, including completed operations liability coverage; (b) physical damage insurance (all risk non-reporting property insurance, including earthquake insurance, with the Beneficiary named as loss payee), covering the Mortgaged Premises for loss or damages resulting from the perils of fire, lightning, earthquake, and such other risks and hazards as are provided under the current standard "Extended Coverage Endorsement" and vandalism and malicious mischief coverage, for the full replacement value of the Mortgaged Premises on a stipulated and agreed-amount basis; (c) if the Mortgaged Premises is in an area identified as a flood hazard area by the Secretary of Housing and Urban Development, flood insurance, to the extent obtainable, in an amount equal to the lesser of the full replacement value of the Mortgaged Premises or the maximum amount available under the Federal flood insurance program; (d) boiler and machinery insurance covering all boilers, machinery, air conditioning, pressure vessels, and similar type equipment commonly covered under a broad-form boiler and machinery policy, in an amount satisfactory to the Beneficiary; (e) insurance against such other risks of damage, hazards, casualties and contingencies in such amounts as the Beneficiary shall from time to time reasonably require, provided that insurance against such FRK11622.A05 FRK11626.A05 285741572 01/09/97 KDF:
(a) shall be paid solely to the Beneficiary and be held, applied or disbursed by the Beneficiary as provided in SECTIONS 2.5.7 and 2.5.8.
2.5.2. All insurance required in SECTION 2.5.1 shall be evidenced by valid and enforceable policies, in form and substance as shall be required by the Beneficiary from time to time, and issued by and distributed among insurers of recognized responsibility having an A.M. Best's Guide of A:XII or better, a financial size category of Class XI or above, and the total limit of liability shall not exceed ten percent (10%) of the total policyholders' surplus. Such insurers shall be authorized to do business in the State and in all other respects shall be reasonably satisfactory to the Beneficiary. The originals of all such policies, or duplicate copies or certificates thereof, shall be delivered to the Beneficiary concurrently with the execution and delivery of this Trust Deed. Thereafter, all renewal or replacement policies, or duplicate copies or certificates thereof, shall be delivered to the Beneficiary not less than thirty fifteen (3015) days prior to the expiration date of the policy or policies to be renewed or replaced, in each case accompanied by evidence reasonably satisfactory to the Beneficiary that all premiums currently payable with respect FRK11626.A05 285741572 01/09/97 KDF: to such policies have been paid in full by or at the direction of the Trustor.
2.5.3. All such insurance policies shall (a) except for any liability policy required hereunder, FRK11622.A05 285741572 01/09/97 KDF: contain a standard noncontributory form of mortgagee clause (in favor of and entitling the Beneficiary to collect any and all proceeds payable under such insurance), as well as a standard waiver of subrogation endorsement, all to be in form and substance reasonably satisfactory to the Beneficiary; (b) provide that such policies may not be cancelled or amended without at least thirty (30) days prior written notice to the Beneficiary; and (c) provide that no act, omission or negligence of the Trustor, or its agents, servants or employees, or of any Space Tenant under any Space Lease, which might otherwise result in a forfeiture of such insurance or any part thereof, shall in any way affect the validity or enforceability of such insurance insofar as the Beneficiary is concerned. The Trustor shall not carry separate insurance, concurrent in kind or form or contributing in the event of loss with any insurance required under this SECTION 2.5. All losses under such insurance policies shall be adjusted by the Trustor in the case of any single instance of such damage or destruction not exceeding $200,000, by the Trustor and the Beneficiary in the case of any such single instance of damage or destruction exceeding such amount, provided that in no event shall the Trustor approve or consent to any final adjustment in any amount exceeding the amount specified above in this sentence without obtaining the Beneficiary's prior approval (which approval shall not be unreasonably withheld) of the amount of such adjustment, and solely by the Beneficiary in the case when an Event of Default exists and is continuing.
2.5.4. The Trustor, at its expense, will furnish to the Beneficiary, within ninety (90) days after written demand, but in no event, except for reasonable cause, more frequently than annually, proof of the then full replacement value of each of the Improvements and the Building Service Equipment and Furnishings therein, such proof to be by appraisals reasonably satisfactory in form and substance to the Beneficiary and prepared by an appraiser (who may be an appraiser for the insurance company insuring such property) designated and paid for by the Trustor and approved by the Beneficiary, which approval shall not be unreasonably withheld or delayed.
2.5.5. If the Beneficiary shall, by any means, acquire the title or estate of the Trustor in or to any portion of the Mortgaged Premises, it shall thereupon FRK11626.A05 285741572 01/09/97 KDF: become the sole and absolute owner of all insurance policies affecting such portion of the Mortgaged Premises held by, or required hereunder to be delivered to, the Beneficiary, with the sole right to collect and retain all unearned premiums thereon; and the Trustor shall be entitled only to a credit FRK11622.A05 285741572 01/09/97 KDF: in reduction of the then outstanding indebtedness secured hereby in the amount of the short rate cancellation refund, when and if received by Beneficiary. The Trustor agrees, immediately upon demand, to execute and deliver such assignments or other authorizations or instruments as may, in the reasonable opinion of the Beneficiary, be reasonably necessary or desirable to effectuate any of the provisions of this SECTION 2.5.5.
2.5.6. If any of the Improvements, Building Service Equipment or Furnishings shall be damaged or destroyed, in whole or in part, by fire or other casualty, the Trustor shall give prompt notice thereof to the Beneficiary, and, without regard to the availability or adequacy of insurance proceeds, shall promptly following receipt of any insurance proceeds or the date when any such proceeds are made available to the Trustor in accordance with the terms hereof, commence to restore, replace, rebuild or alter the same as nearly as possible to the condition, character and value thereof existing immediately prior to such damage or destruction. Any insurance proceeds in respect of such damage or destruction, or any Award (as defined in SECTION 3.2) for a partial taking which is not a substantial or total taking, as such terms are referred to in ARTICLE III hereof, at the option of the Beneficiary, may either (i) be applied as a prepayment of the unpaid balance of the principal of the Note and of accrued and unpaid interest thereon and as a payment of any other sums due and owing under the Note, the Loan Agreement and the Security Documents, or (ii) be made available to pay or reimburse costs incurred for restoration, replacement or rebuilding necessitated as a result of such damage or destruction, or as a result of such taking, as the case may be, or (iii) be used for any other purpose or object deemed appropriate by the Beneficiary in connection with the Mortgaged Premises, provided, however, that the Beneficiary may not elect either option (i) or (iii) above if, and for so long as all of the following conditions (collectively, the "Insurance or Award Conditions" have been and remain satisfied: (a) no Event of Default has occurred and is continuing or would occur as a result of such casualty or taking and no event has occurred that with the passage of time or the giving of notice, or both, would constitute an Event of Default; (b) the balance of the insurance proceeds or such Award either initially paid to the Beneficiary or deposited with the Depository (as FRK11626.A05 285741572 01/09/97 KDF: hereinafter defined) or remaining from time to time, shall be sufficient, in the Beneficiary's reasonable judgment, to complete the restoration, replacement or rebuilding, or the Trustor shall have deposited such sufficient funds with the Beneficiary or the Depository; and (c) the Beneficiary FRK11622.A05 285741572 01/09/97 KDF: determines, in its reasonable discretion, that (i) the Loan to Value Ratio (as defined in the Loan Agreement, and taking into consideration the value of all of the Projects, as defined in the Loan Agreement) is not greater than 55%, and (ii) the Debt Service Coverage Ratio (as defined in the Loan Agreement, and taking into consideration the loss of income resulting from such damage or destruction as projected by the Beneficiary in its reasonable discretion) is not less than 1.40:1.0. Notwithstanding the foregoing, if an event has occurred and is continuing that with the passage of time or the giving of notice, or both, would constitute an Event of Default but the same has not yet matured into an Event of Default, then, if the conditions set forth in the foregoing clauses (b) and (c) have been or will be, in the Beneficiary's reasonable judgment, satisfied, the Beneficiary shall not elect either option (i) or (iii) unless such event shall have matured into an Event of Default and, unless and until such event shall have so matured into an Event of Default or such event has been cured or shall otherwise cease to exist, the Beneficiary (or the Depository) shall not release any such insurance proceeds or Award and the same shall be held until an Event of Default occurs or the Default has been cured or shall otherwise cease to exist.
2.5.7. Any such insurance proceeds (other than the proceeds of the rent insurance policy, which shall be paid as provided in SECTION 2.5.8 below) or Award which are to be applied to restoration, replacement or rebuilding of the Mortgaged Premises shall, after payment or reimbursement to the Beneficiary of all reasonable costs and expenses of the Beneficiary in collecting such proceeds or Award, be applied upon satisfaction of the following provisions and conditions:
(a) If the damage be of such nature as to require the Trustor to construct a replacement for, or to alter in any material or substantial way, the damaged or destroyed items, the Trustor shall, before commencing any such work, submit copies of the plans and specifications therefor to the Beneficiary for the Beneficiary's approval, such approval to not be unreasonably withheld or delayed.. FRK11626.A05 285741572 01/09/97 KDF:
(b) If after payment or reimbursement to the Beneficiary of all costs and expenses of the Beneficiary in collecting such insurance proceeds or Award, the aggregate insurance proceeds or Award received by reason of any single instance of such damage or destruction or condemnation, as the case may FRK11622.A05 285741572 01/09/97 KDF: be, shall be $200,000 or less such insurance proceeds or Award shall be paid to the Trustor, which shall hold all amounts so received in trust for application first to pay the entire cost of restoring, repairing, rebuilding or replacing the damaged or destroyed items, before any portion of such proceeds may be used or applied for any other purpose. If the aggregate net insurance proceeds or Award by reason of any single instance of such damage or destruction or condemnation, as the case may be, shall be more than $200,000 such sums shall be held and disbursed by Fleet Bank, National Association or, if this Trust Deed is held by another financial institution, by such financial institution or, if this Trust Deed is not held by a financial institution, by a financial institution selected by the then Beneficiary (the holder of such monies, the "Depository") in accordance with the following provisions of this SECTION 2.5.7.
(c) The Beneficiary shall have received as to each such disbursement a certificate of the Trustor (i) requesting the payment of a specified amount of such insurance or condemnation proceeds;
(ii) describing in reasonable detail the work and materials applied to the restoration, replacement or rebuilding of the damaged, destroyed or taken Improvement, or Building Service Equipment and/or Furnishings located therein, since the date of the last such certificate; (iii) stating that the requested amount does not exceed the cost of such work and materials; and (iv) stating that a request for payment for such work and materials has not previously been made, accompanied by:
1. a certificate of an independent engineer or architect designated by the Trustor, who shall have been approved in writing by the Beneficiary (such approval not to be unreasonably withheld), stating (i) that the work and materials described in the accompanying certificate of the Trustor were satisfactorily performed and furnished and were necessary, appropriate or desirable to the restoration, replacement or rebuilding FRK11626.A05 285741572 01/09/97 KDF: of the damaged, destroyed or taken Improvement, or Building Service Equipment and/or Furnishings; (ii) that the amount specified in such certificate of the Trustor does not exceed the reasonable cost of such work and materials; and (iii) the FRK11622.A05 285741572 01/09/97 KDF: additional amount, if any, required to complete the restoration, replacement or rebuilding of the damaged, destroyed or taken Improvement, Building Service Equipment and/or Furnishings; and
Appears in 1 contract
Insurance; Restoration Following Casualty. 2.5.1. Until the indebtedness secured hereby is paid in full, the Trustor shall at its own expense at all times maintain or cause to be maintained on all of the Mortgaged Premises (a) comprehensive general liability insurance, including umbrella liability insurance, covering all claims for bodily injury, including death, and property damage occurring on, in or about the Mortgaged Premises in an aggregate amount of not less than Five Million Dollars ($5,000,000) per occurrence, and a single limit of not less than Two Million Dollars ($2,000,000) per person and per occurrence for personal injury, bodily injury and property damage; the policy shall have no deductible or self insured retention requirements; the policy limits of such insurance, if requested by the Beneficiary, shall be increased from time to time to reflect what a reasonably prudent owner or lessee of buildings or improvements similar in type and locality to the Mortgaged Premises would carry; during any FRK11623.A05 285741572 01/09/97 KDF: period of substantial alterations or improvements in, on or to the Mortgaged Premises, the Trustor will cause the comprehensive general liability insurance, including umbrella liability insurance, endorsed to provide owners' and contractors' protective liability coverage, including completed operations liability coverage; (b) physical damage insurance (all risk non-reporting property insurance, including earthquake insurance, with the Beneficiary named as loss payee), covering the Mortgaged Premises for loss or damages resulting from the perils of fire, lightning, earthquake, and such other risks and hazards as are provided under the current standard "Extended Coverage Endorsement" and vandalism and malicious mischief coverage, for the full replacement value of the Mortgaged Premises on a stipulated and agreed-amount basis; (c) if the Mortgaged Premises is in an area identified as a flood hazard area by the Secretary of Housing and Urban Development, flood insurance, to the extent obtainable, in an amount equal to the lesser of the full replacement value of the Mortgaged Premises or the maximum amount available under the Federal flood insurance program; (d) boiler and machinery insurance covering all boilers, machinery, air conditioning, pressure vessels, and similar type equipment commonly covered under a broad-form boiler and machinery policy, in an amount satisfactory to the Beneficiary; (e) insurance against such other risks of damage, hazards, casualties and contingencies in such amounts as the Beneficiary shall from time to time reasonably require, provided that insurance against such FRK11622.A05 285741572 01/09/97 KDF:
other risks, hazards, casualties or contingencies shall then be commonly carried by prudent owners or lessees of building or improvements in the locality similar in character, construction, use and occupancy to the Improvements, Building Service Equipment and Furnishings on, or constituting a part of, the Mortgaged Premises; and (af) loss of rents/business interruption coverage in an amount sufficient to pay all Impositions, insurance premiums, interest and principal installments and all other amounts due under the Note and the Loan Agreement and the normal operating expenses of the Mortgaged Premises, all for a period of one (1) year. Furthermore, the Beneficiary reserves the right to require additional insurance and/or higher policy limits than heretofore specified if such additional insurance and/or higher policy limits are commercially reasonable for similar properties, which right may be exercised by written notice to the Trustor, and, as soon thereafter as practicable, but in any event within thirty (30) days of the receipt thereof, the Trustor agrees to obtain insurance coverage complying with such notice. The proceeds of all such insurance (except the insurance specified in SECTION 2.5.1(a)) shall be paid solely to the FRK11623.A05 285741572 01/09/97 KDF: Beneficiary and be held, applied or disbursed by the Beneficiary as provided in SECTIONS 2.5.7 and 2.5.8.
2.5.2. All insurance required in SECTION 2.5.1 shall be evidenced by valid and enforceable policies, in form and substance as shall be required by the Beneficiary from time to time, and issued by and distributed among insurers of recognized responsibility having an A.M. Best's Guide of A:XII or better, a financial size category of Class XI or above, and the total limit of liability shall not exceed ten percent (10%) of the total policyholders' surplus. Such insurers shall be authorized to do business in the State and in all other respects shall be reasonably satisfactory to the Beneficiary. The originals of all such policies, or duplicate copies or certificates thereof, shall be delivered to the Beneficiary concurrently with the execution and delivery of this Trust Deed. Thereafter, all renewal or replacement policies, or duplicate copies or certificates thereof, shall be delivered to the Beneficiary not less than thirty (30) days prior to the expiration date of the policy or policies to be renewed or replaced, in each case accompanied by evidence reasonably satisfactory to the Beneficiary that all premiums currently payable with respect to such policies have been paid in full by or at the direction of the Trustor.
2.5.3. All such insurance policies shall (a) except for any liability policy required hereunder, FRK11622.A05 285741572 01/09/97 KDF: contain a standard noncontributory form of mortgagee clause (in favor of and entitling the Beneficiary to collect any and all proceeds payable under such insurance), as well as a standard waiver of subrogation endorsement, all to be in form and substance reasonably satisfactory to the Beneficiary; (b) provide that such policies may not be cancelled or amended without at least thirty (30) days prior written notice to the Beneficiary; and (c) provide that no act, omission or negligence of the Trustor, or its agents, servants or employees, or of any Space Tenant under any Space Lease, which might otherwise result in a forfeiture of such insurance or any part thereof, shall in any way affect the validity or enforceability of such insurance insofar as the Beneficiary is concerned. The Trustor shall not carry separate insurance, concurrent in kind or form or contributing in the event of loss with any insurance required under this SECTION 2.5. All losses under such insurance policies shall be adjusted by the Trustor in the case of any single instance of such damage or destruction not exceeding $200,000, by the Trustor and the Beneficiary in the case of any such single instance of damage or destruction exceeding such amount, provided that in no event FRK11623.A05 285741572 01/09/97 KDF: shall the Trustor approve or consent to any final adjustment in any amount exceeding the amount specified above in this sentence without obtaining the Beneficiary's prior approval (which approval shall not be unreasonably withheld) of the amount of such adjustment, and solely by the Beneficiary in the case when an Event of Default exists and is continuing.
2.5.4. The Trustor, at its expense, will furnish to the Beneficiary, within ninety (90) days after written demand, but in no event, except for reasonable cause, more frequently than annually, proof of the then full replacement value of each of the Improvements and the Building Service Equipment and Furnishings therein, such proof to be by appraisals reasonably satisfactory in form and substance to the Beneficiary and prepared by an appraiser (who may be an appraiser for the insurance company insuring such property) designated and paid for by the Trustor and approved by the Beneficiary, which approval shall not be unreasonably withheld or delayed.
2.5.5. If the Beneficiary shall, by any means, acquire the title or estate of the Trustor in or to any portion of the Mortgaged Premises, it shall thereupon become the sole and absolute owner of all insurance policies affecting such portion of the Mortgaged Premises held by, or required hereunder to be delivered to, the Beneficiary, with the sole right to collect and retain all unearned premiums thereon; and the Trustor shall be entitled only to a credit FRK11622.A05 285741572 01/09/97 KDF: in reduction of the then outstanding indebtedness secured hereby in the amount of the short rate cancellation refund, when and if received by Beneficiary. The Trustor agrees, immediately upon demand, to execute and deliver such assignments or other authorizations or instruments as may, in the reasonable opinion of the Beneficiary, be reasonably necessary or desirable to effectuate any of the provisions of this SECTION 2.5.5.
2.5.6. If any of the Improvements, Building Service Equipment or Furnishings shall be damaged or destroyed, in whole or in part, by fire or other casualty, the Trustor shall give prompt notice thereof to the Beneficiary, and, without regard to the availability or adequacy of insurance proceeds, shall promptly following receipt of any insurance proceeds or the date when any such proceeds are made available to the Trustor in accordance with the terms hereof, commence to restore, replace, rebuild or alter the same as nearly as possible to the condition, character and value thereof existing immediately prior to such damage or destruction. Any insurance proceeds in respect of such damage or destruction, or any Award (as FRK11623.A05 285741572 01/09/97 KDF: defined in SECTION 3.2) for a partial taking which is not a substantial or total taking, as such terms are referred to in ARTICLE III hereof, at the option of the Beneficiary, may either (i) be applied as a prepayment of the unpaid balance of the principal of the Note and of accrued and unpaid interest thereon and as a payment of any other sums due and owing under the Note, the Loan Agreement and the Security Documents, or (ii) be made available to pay or reimburse costs incurred for restoration, replacement or rebuilding necessitated as a result of such damage or destruction, or as a result of such taking, as the case may be, or (iii) be used for any other purpose or object deemed appropriate by the Beneficiary in connection with the Mortgaged Premises, provided, however, that the Beneficiary may not elect either option (i) or (iii) above if, and for so long as all of the following conditions (collectively, the "Insurance or Award Conditions" have been and remain satisfied: (a) no Event of Default has occurred and is continuing or would occur as a result of such casualty or taking and no event has occurred that with the passage of time or the giving of notice, or both, would constitute an Event of Default; (b) the balance of the insurance proceeds or such Award either initially paid to the Beneficiary or deposited with the Depository (as hereinafter defined) or remaining from time to time, shall be sufficient, in the Beneficiary's reasonable judgment, to complete the restoration, replacement or rebuilding, or the Trustor shall have deposited such sufficient funds with the Beneficiary or the Depository; and (c) the Beneficiary FRK11622.A05 285741572 01/09/97 KDF: determines, in its reasonable discretion, that (i) the Loan to Value Ratio (as defined in the Loan Agreement, and taking into consideration the value of all of the Projects, as defined in the Loan Agreement) is not greater than 55%, and (ii) the Debt Service Coverage Ratio (as defined in the Loan Agreement, and taking into consideration the loss of income resulting from such damage or destruction as projected by the Beneficiary in its reasonable discretion) is not less than 1.40:1.0. Notwithstanding the foregoing, if an event has occurred and is continuing that with the passage of time or the giving of notice, or both, would constitute an Event of Default but the same has not yet matured into an Event of Default, then, if the conditions set forth in the foregoing clauses (b) and (c) have been or will be, in the Beneficiary's reasonable judgment, satisfied, the Beneficiary shall not elect either option (i) or (iii) unless such event shall have matured into an Event of Default and, unless and until such event shall have so matured into an Event of Default or such event has been cured or shall otherwise cease to exist, the Beneficiary (or the Depository) shall not release any such insurance proceeds or Award and the same shall be held until an Event FRK11623.A05 285741572 01/09/97 KDF: of Default occurs or the Default has been cured or shall otherwise cease to exist.
2.5.7. Any such insurance proceeds (other than the proceeds of the rent insurance policy, which shall be paid as provided in SECTION 2.5.8 below) or Award which are to be applied to restoration, replacement or rebuilding of the Mortgaged Premises shall, after payment or reimbursement to the Beneficiary of all reasonable costs and expenses of the Beneficiary in collecting such proceeds or Award, be applied upon satisfaction of the following provisions and conditions:
(a) If the damage be of such nature as to require the Trustor to construct a replacement for, or to alter in any material or substantial way, the damaged or destroyed items, the Trustor shall, before commencing any such work, submit copies of the plans and specifications therefor to the Beneficiary for the Beneficiary's approval, such approval to not be unreasonably withheld or delayed.
(b) If after payment or reimbursement to the Beneficiary of all costs and expenses of the Beneficiary in collecting such insurance proceeds or Award, the aggregate insurance proceeds or Award received by reason of any single instance of such damage or destruction or condemnation, as the case may FRK11622.A05 285741572 01/09/97 KDF: be, shall be $200,000 or less such insurance proceeds or Award shall be paid to the Trustor, which shall hold all amounts so received in trust for application first to pay the entire cost of restoring, repairing, rebuilding or replacing the damaged or destroyed items, before any portion of such proceeds may be used or applied for any other purpose. If the aggregate net insurance proceeds or Award by reason of any single instance of such damage or destruction or condemnation, as the case may be, shall be more than $200,000 such sums shall be held and disbursed by Fleet Bank, National Association or, if this Trust Deed is held by another financial institution, by such financial institution or, if this Trust Deed is not held by a financial institution, by a financial institution selected by the then Beneficiary (the holder of such monies, the "Depository") in accordance with the following provisions of this SECTION 2.5.7.
(c) The Beneficiary shall have received as to each such disbursement a certificate of the Trustor (i) requesting the payment of a specified FRK11623.A05 285741572 01/09/97 KDF: amount of such insurance or condemnation proceeds;
; (ii) describing in reasonable detail the work and materials applied to the restoration, replacement or rebuilding of the damaged, destroyed or taken Improvement, or Building Service Equipment and/or Furnishings located therein, since the date of the last such certificate; (iii) stating that the requested amount does not exceed the cost of such work and materials; and (iv) stating that a request for payment for such work and materials has not previously been made, accompanied by:
1. a certificate of an independent engineer or architect designated by the Trustor, who shall have been approved in writing by the Beneficiary (such approval not to be unreasonably withheld), stating (i) that the work and materials described in the accompanying certificate of the Trustor were satisfactorily performed and furnished and were necessary, appropriate or desirable to the restoration, replacement or rebuilding of the damaged, destroyed or taken Improvement, or Building Service Equipment and/or Furnishings; (ii) that the amount specified in such certificate of the Trustor does not exceed the reasonable cost of such work and materials; and (iii) the FRK11622.A05 285741572 01/09/97 KDF: additional amount, if any, required to complete the restoration, replacement or rebuilding of the damaged, destroyed or taken Improvement, Building Service Equipment and/or Furnishings; and
Appears in 1 contract
Insurance; Restoration Following Casualty. 2.5.1. Until the indebtedness secured hereby is paid in full, the Trustor Mortgagor shall at its own expense at all times maintain or cause to be maintained on all of the Mortgaged Premises (a) comprehensive general liability insurance, including umbrella liability insurance, covering all claims for bodily injury, including death, and property damage occurring on, in or about the Mortgaged Premises in an aggregate amount of not less than Five Million Dollars ($5,000,000) per occurrence, and a single limit of not less than Two Million Dollars ($2,000,000) per person and per occurrence for personal injury, bodily injury FRK11625.A05 285741572 01/09/97 KDF: and property damage; the policy shall have no deductible or self insured retention requirements; the policy limits of such insurance, if requested by the BeneficiaryMortgagee, shall be increased from time to time to reflect what a reasonably prudent owner or lessee of buildings or improvements similar in type and locality to the Mortgaged Premises would carry; during any period of substantial alterations or improvements in, on or to the Mortgaged Premises, the Trustor Mortgagor will cause the comprehensive general liability insurance, including umbrella liability insurance, endorsed to provide owners' and contractors' protective liability coverage, including completed operations liability coverage; (b) physical damage insurance (all risk non-reporting property insurance, including earthquake insurance, with the Beneficiary Mortgagee named as loss payee), covering the Mortgaged Premises for loss or damages resulting from the perils of fire, lightning, earthquake, and such other risks and hazards as are provided under the current standard "Extended Coverage Endorsement" and vandalism and malicious mischief coverage, for the full replacement value of the Mortgaged Premises on a stipulated and agreed-amount basis; (c) if the Mortgaged Premises is in an area identified as a flood hazard area by the Secretary of Housing and Urban Development, flood insurance, to the extent obtainable, in an amount equal to the lesser of the full replacement value of the Mortgaged Premises or the maximum amount available under the Federal flood insurance program; (d) boiler and machinery insurance covering all boilers, machinery, air conditioning, pressure vessels, and similar type equipment commonly covered under a broad-form boiler and machinery policy, in an amount satisfactory to the BeneficiaryMortgagee; (e) insurance against such other risks of damage, hazards, casualties and contingencies in such amounts as the Beneficiary Mortgagee shall from time to time reasonably require, provided that insurance against such FRK11622.A05 other risks, hazards, casualties or contingencies shall then be commonly carried by prudent owners or lessees of building or improvements in the locality similar in character, construction, use and occupancy to the Improvements, Building Service Equipment and Furnishings on, or constituting a part of, the Mortgaged Premises; and (f) loss of rents/business interruption coverage in an amount sufficient to pay all Impositions, insurance premiums, interest and principal installments and all other amounts due under the Note and the Loan Agreement and the normal operating expenses of the Mortgaged Premises, all for a period of one (1) year. Furthermore, the Mortgagee reserves the right to require additional insurance and/or higher policy limits than heretofore specified if such additional insurance and/or higher policy limits are commercially reasonable for similar properties, which right FRK11625.A05 285741572 01/09/97 KDF:
(a) shall be paid solely to the Beneficiary Mortgagee and be held, applied or disbursed by the Beneficiary Mortgagee as provided in SECTIONS 2.5.7 and 2.5.8.
2.5.2. All insurance required in SECTION 2.5.1 shall be evidenced by valid and enforceable policies, in form and substance as shall be required by the Beneficiary Mortgagee from time to time, and issued by and distributed among insurers of recognized responsibility having an A.M. Best's Guide of A:XII or better, a financial size category of Class XI or above, and the total limit of liability shall not exceed ten percent (10%) of the total policyholders' surplus. Such insurers shall be authorized to do business in the State and in all other respects shall be reasonably satisfactory to the BeneficiaryMortgagee. The originals of all such policies, or duplicate copies or certificates thereof, shall be delivered to the Beneficiary Mortgagee concurrently with the execution and delivery of this Trust DeedMortgage. Thereafter, all renewal or replacement policies, or duplicate copies or certificates thereof, shall be delivered to the Beneficiary Mortgagee not less than thirty (30) days prior to the expiration date of the policy or policies to be renewed or replaced, in each case accompanied by evidence reasonably satisfactory to the Beneficiary Mortgagee that all premiums currently payable with respect to such policies have been paid in full by or at the direction of the TrustorMortgagor.
2.5.3. All such insurance policies shall (a) except for any liability policy required hereunder, FRK11622.A05 285741572 01/09/97 KDF: contain a standard noncontributory form of mortgagee clause (in favor of and entitling the Beneficiary Mortgagee to collect any and all proceeds payable under such insurance), as well as a standard waiver of subrogation endorsement, all to be in form and substance reasonably satisfactory to the BeneficiaryMortgagee; (b) provide that such policies may not be cancelled or amended without at least thirty (30) days prior written notice to the BeneficiaryMortgagee; and (c) provide that no act, omission or negligence of the TrustorMortgagor, or its agents, servants or employees, or of any Space Tenant under any Space Lease, which might otherwise result in a forfeiture of such insurance or any part thereof, shall in any way affect the validity or enforceability of such insurance insofar as the Beneficiary Mortgagee is concerned. The Trustor Mortgagor shall not carry separate insurance, concurrent in kind or form or contributing in the event of loss with any insurance FRK11625.A05 285741572 01/09/97 KDF: required under this SECTION 2.5. All losses under such insurance policies shall be adjusted by the Trustor Mortgagor in the case of any single instance of such damage or destruction not exceeding $200,000, by the Trustor Mortgagor and the Beneficiary Mortgagee in the case of any such single instance of damage or destruction exceeding such amount, provided that in no event shall the Trustor Mortgagor approve or consent to any final adjustment in any amount exceeding the amount specified above in this sentence without obtaining the BeneficiaryMortgagee's prior approval (which approval shall not be unreasonably withheld) of the amount of such adjustment, and solely by the Beneficiary Mortgagee in the case when an Event of Default exists and is continuing.
2.5.4. The TrustorMortgagor, at its expense, will furnish to the BeneficiaryMortgagee, within ninety (90) days after written demand, but in no event, except for reasonable cause, more frequently than annually, proof of the then full replacement value of each of the Improvements and the Building Service Equipment and Furnishings therein, such proof to be by appraisals reasonably satisfactory in form and substance to the Beneficiary Mortgagee and prepared by an appraiser (who may be an appraiser for the insurance company insuring such property) designated and paid for by the Trustor Mortgagor and approved by the BeneficiaryMortgagee, which approval shall not be unreasonably withheld or delayed.
2.5.5. If the Beneficiary Mortgagee shall, by any means, acquire the title or estate of the Trustor Mortgagor in or to any portion of the Mortgaged Premises, it shall thereupon become the sole and absolute owner of all insurance policies affecting such portion of the Mortgaged Premises held by, or required hereunder to be delivered to, the BeneficiaryMortgagee, with the sole right to collect and retain all unearned premiums thereon; and the Trustor Mortgagor shall be entitled only to a credit FRK11622.A05 285741572 01/09/97 KDF: in reduction of the then outstanding indebtedness secured hereby in the amount of the short rate cancellation refund, when and if received by BeneficiaryMortgagee. The Trustor Mortgagor agrees, immediately upon demand, to execute and deliver such assignments or other authorizations or instruments as may, in the reasonable opinion of the BeneficiaryMortgagee, be reasonably necessary or desirable to effectuate any of the provisions of this SECTION 2.5.5.
2.5.6. If any of the Improvements, Building Service Equipment or Furnishings shall be damaged or destroyed, in whole or in part, by fire or other casualty, the Trustor Mortgagor shall give prompt notice thereof to the BeneficiaryMortgagee, and, without regard to the availability or adequacy of insurance proceeds, shall promptly following FRK11625.A05 285741572 01/09/97 KDF: receipt of any insurance proceeds or the date when any such proceeds are made available to the Trustor Mortgagor in accordance with the terms hereof, commence to restore, replace, rebuild or alter the same as nearly as possible to the condition, character and value thereof existing immediately prior to such damage or destruction. Any insurance proceeds in respect of such damage or destruction, or any Award (as defined in SECTION 3.2) for a partial taking which is not a substantial or total taking, as such terms are referred to in ARTICLE III hereof, at the option of the BeneficiaryMortgagee, may either (i) be applied as a prepayment of the unpaid balance of the principal of the Note and of accrued and unpaid interest thereon and as a payment of any other sums due and owing under the Note, the Loan Agreement and the Security Documents, or (ii) be made available to pay or reimburse costs incurred for restoration, replacement or rebuilding necessitated as a result of such damage or destruction, or as a result of such taking, as the case may be, or (iii) be used for any other purpose or object deemed appropriate by the Beneficiary Mortgagee in connection with the Mortgaged Premises, provided, however, that the Beneficiary Mortgagee may not elect either option (i) or (iii) above if, and for so long as all of the following conditions (collectively, the "Insurance or Award Conditions" have been and remain satisfied: (a) no Event of Default has occurred and is continuing or would occur as a result of such casualty or taking and no event has occurred that with the passage of time or the giving of notice, or both, would constitute an Event of Default; (b) the balance of the insurance proceeds or such Award either initially paid to the Beneficiary Mortgagee or deposited with the Depository (as hereinafter defined) or remaining from time to time, shall be sufficient, in the BeneficiaryMortgagee's reasonable judgment, to complete the restoration, replacement or rebuilding, or the Trustor Mortgagor shall have deposited such sufficient funds with the Beneficiary Mortgagee or the Depository; and (c) the Beneficiary FRK11622.A05 285741572 01/09/97 KDF: Mortgagee determines, in its reasonable discretion, that (i) the Loan to Value Ratio (as defined in the Loan Agreement, and taking into consideration the value of all of the Projects, as defined in the Loan Agreement) is not greater than 55%, and (ii) the Debt Service Coverage Ratio (as defined in the Loan Agreement, and taking into consideration the loss of income resulting from such damage or destruction as projected by the Beneficiary Mortgagee in its reasonable discretion) is not less than 1.40:1.0. Notwithstanding the foregoing, if an event has occurred and is continuing that with the passage of time or the giving of notice, or both, would constitute an Event of Default but the same has not yet matured into an Event of Default, then, if the conditions set forth in the foregoing clauses (b) and (c) have been or will be, in the BeneficiaryMortgagee's reasonable judgment, satisfied, the Beneficiary Mortgagee shall not FRK11625.A05 285741572 01/09/97 KDF: elect either option (i) or (iii) unless such event shall have matured into an Event of Default and, unless and until such event shall have so matured into an Event of Default or such event has been cured or shall otherwise cease to exist, the Beneficiary Mortgagee (or the Depository) shall not release any such insurance proceeds or Award and the same shall be held until an Event of Default occurs or the Default has been cured or shall otherwise cease to exist.
2.5.7. Any such insurance proceeds (other than the proceeds of the rent insurance policy, which shall be paid as provided in SECTION 2.5.8 below) or Award which are to be applied to restoration, replacement or rebuilding of the Mortgaged Premises shall, after payment or reimbursement to the Beneficiary Mortgagee of all reasonable costs and expenses of the Beneficiary Mortgagee in collecting such proceeds or Award, be applied upon satisfaction of the following provisions and conditions:
(a) If the damage be of such nature as to require the Trustor Mortgagor to construct a replacement for, or to alter in any material or substantial way, the damaged or destroyed items, the Trustor Mortgagor shall, before commencing any such work, submit copies of the plans and specifications therefor to the Beneficiary Mortgagee for the BeneficiaryMortgagee's approval, such approval to not be unreasonably withheld or delayed.
(b) If after payment or reimbursement to the Beneficiary Mortgagee of all costs and expenses of the Beneficiary Mortgagee in collecting such insurance proceeds or Award, the aggregate insurance proceeds or Award received by reason of any single instance of such damage or destruction or condemnation, as the case may FRK11622.A05 285741572 01/09/97 KDF: be, shall be $200,000 or less such insurance proceeds or Award shall be paid to the TrustorMortgagor, which shall hold all amounts so received in trust for application first to pay the entire cost of restoring, repairing, rebuilding or replacing the damaged or destroyed items, before any portion of such proceeds may be used or applied for any other purpose. If the aggregate net insurance proceeds or Award by reason of any single instance of such damage or destruction or condemnation, as the case may be, shall be more than $200,000 such sums shall be held and disbursed by Fleet Bank, National Association or, if this Trust Deed Mortgage is held by another financial institution, by such financial institution or, if this Trust Deed Mortgage is not held by a financial institution, by a financial institution selected by the then Beneficiary Mortgagee (the holder of such FRK11625.A05 285741572 01/09/97 KDF: monies, the "Depository") in accordance with the following provisions of this SECTION 2.5.7.
(c) The Beneficiary Mortgagee shall have received as to each such disbursement a certificate of the Trustor Mortgagor (i) requesting the payment of a specified amount of such insurance or condemnation proceeds;
(ii) describing in reasonable detail the work and materials applied to the restoration, replacement or rebuilding of the damaged, destroyed or taken Improvement, or Building Service Equipment and/or Furnishings located therein, since the date of the last such certificate; (iii) stating that the requested amount does not exceed the cost of such work and materials; and (iv) stating that a request for payment for such work and materials has not previously been made, accompanied by:
1. a certificate of an independent engineer or architect designated by the TrustorMortgagor, who shall have been approved in writing by the Beneficiary Mortgagee (such approval not to be unreasonably withheld), stating (i) that the work and materials described in the accompanying certificate of the Trustor Mortgagor were satisfactorily performed and furnished and were necessary, appropriate or desirable to the restoration, replacement or rebuilding of the damaged, destroyed or taken Improvement, or Building Service Equipment and/or Furnishings; (ii) that the amount specified in such certificate of the Trustor Mortgagor does not exceed the reasonable cost of such work and materials; and (iii) the FRK11622.A05 285741572 01/09/97 KDF: additional amount, if any, required to complete the restoration, replacement or rebuilding of the damaged, destroyed or taken Improvement, Building Service Equipment and/or Furnishings; and
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