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ARTICLE 3
Insurance
SECTION 3.01. Mortgagor agrees, at Mortgagor's sole cost and expense,
to keep the buildings, structures, improvements and Fixtures included in the Mortgaged
Property insured at all times throughout the term of this Mortgage (including any period
or periods of time during which any such buildings, structures, improvements oc Fixtures
are in the course of remodeling or constriction) and to furnish the following to Mortgagee:
A. Policies of insurance against loss or damage by fire, lightning, wind-
storm, explosion, riot, riot attending a strike, civil commotion, damage from air-
craft and vehicles, and smoke damage and loss or damage from such hazards as
are presently included in so-called "extended coverage" and agair~t vandalism
and malicious mischief and against such other insurable-hazards as, under good
insurance practices, from time to time are insured agairet for similar buildings
in the area where the Mortgaged Property is located. The amount of such insur-
ance shall be not less than the greater of (ij 100916 of the "Full Replacement Cost"
of such buildings, strictures, improvements and Fixtures without deduction for
depreciation; (2) an amount sufficient to prevent the Mortgagee and/or Mortgagor
from becoming a co-insurer within the terms of the applicable policies; or (3)
the original principal amount of this Mortgage. "Full Replacement Cost," as used
herein, means the cost of replacing all such buildings, structures, improvements
and Fixtures, exclusive of the cost of excavations, foundations and footings below
the lowest basement floor. Such Full Replacement Cost shall be determined from
time to time at the request of Mortg~egee by an insurer or by an appraiser, en-
gineer, architect or contractor designated by Mortgagor and approved in writing
by Mortgagee and paid by Mortgagor. No omission on the part of Mortgagee to
request any such determination shall relieve Mortgagor of any of its obligations
under this Article 3. Each policy shall contain a "Replacement Cost Endorsement "
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B. If required by Mortgagee, policies of insurance against loss or damage
to the major components of the air conditioning and/or heating system, fly-wheels,
k steam pipes, steam turbines, steam engines, steam boilers, other pressure vessels,
high pressure piping and machinery, if any, such as are installed in the buildings
and improvements for an amount not less than ;1,000,000. Such policies shall
also insure against physical damage to the Mortgage Property arising out of an
accident covered thereunder,
C. If required by Mortgagee, rent and/or business interruption insurance
against loss of income arising out of damage or destruction by fire or the perils
of "extended coverage" so-called, in an amount equal to at least one year's gross
income from operation of the Mortgaged Property. All proceeds of such insurance
in the event of loss recovery thereunder shall be paid to Mortgagee and shall be
held end applied by Mortgagee to the extent of such loss recovery toward the
payment of the interest or principal and interest due under the Note and all sums
and obligations secured by this Mortgage. The Mortgagee shall have the first
priority and claim on such proceeds to the extent of an amount equal to the pay-
ments of interest or principal and interest becoming due under the Note and all
sums and obli~tions secured by this Mortgage for the pen~od for which the pro-
seeds are paid. The balance of the proceeds shall be used to pay taxes, assess-
marts, water and sewer rents and operating expenses in that order of priority.
~ Mortgagee shall disburse payments for such items when due and payable, but not
more frequently than every 30 days (unless Mortgagee elects to make more fre-
quent disbursements) to the Mortgagor, or, at Mortgagee's option, to the party
to whom any such payment is due. Upon satisfactory completion of the resto-
ration of the Mortgaged Property, and provided Mortgagor is not then in default
under this Mortgage, the balance of the loss recovery, if anpr, shall be paid over
to the Mortgagor.
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