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200102665 5. HAZARD INSURANCE. Borrower shall keep the improvements now existing or hereafter erected on the Property insured by carriers at all times satisfactory to Lender against loss by (a) fire and extended or all risk coverage in the full amount of the insurable replacement value of all improvements not including the land; (b) public liability coverage; (c) business interruption coverage and/or rental value coverage, respectively; (d) vandalism, malicious mischief, and sprinkler leakage, by endorsement; (e) boiler, where applicable, and in amounts related to the exposure; (f) so called "dram shop" insurance if alcoholic beverages are sold on the Property; and (g) evidence of flood insurance through the National Flood Insurance Program or evidence satisfactory to Lender that the Property is not within the boundaries of any 100 year flood plain designated by the National Flood Program and such other hazards, casualties, liabilities and contingencies as Lender (and, if this Instrument is on a leasehold, the ground lease) shall require and in such amounts and for such periods as Lender shall require. All premiums on insurance policies shall be paid by Borrower making payment, when due, directly to the carrier, or in such other manner as Lender may reasonably designate in writing. Borrower shall provide evidence to Lender of the above coverage in the form of Accord 27 Evidence of Property Insurance. All insurance policies and renewals thereof shall be in a form acceptable to Lender and shall include a standard mortgagee clause in favor of and in form acceptable to Lender. Lender shall have the right to hold the policies, and Borrower shall promptly furnish to Lender all renewal notices and all receipts of paid premiums. At least twenty days prior to the expiration date of a policy, Borrower shall deliver to Lender a renewal policy or certificate thereof in form satisfactory to Lender. In the event ofloss, Borrower shall give immediate written notice to the insurance carrier and to Lender. Borrower hereby authorizes and empowers Lender as attorney -in -fact for Borrower to make proof of loss, to adjust and compromise any claim under insurance policies, to appear in and prosecute any action arising from such insurance policies, to collect and receive insurance proceeds, and to deduct therefrom Lender's expenses incurred in the collection of such proceeds; provided however, that nothing contained in this paragraph 5 shall require Lender to incur any expense or take any action hereunder. Provided no event of default has occurred and is continuing under the Loan Documents, all insurance proceeds shall be paid to and used by Borrower for restoration of the Property, subject to the following conditions: (a) proceeds disbursed do not exceed 100% ofthe costs actually incurred; (b) the proceeds will be disbursed under procedures reasonably established by Lender, which shall include an administrative fee equal to $500 for every disbursement or partial disbursement of the proceeds; (c) the loan to value ratio of the restored Property in the Lender's reasonable discretion is not more than 75 %; and (d) the projected net operating income from the Property (less structural/replacement reserves) is sufficient to service the Loan as determined by Lender in its reasonable discretion. Any proceeds remaining after the restoration of the Property as contemplated herein shall be retained by Lender and applied to the debt without payment of a prepayment premium at Lender's sole and absolute discretion, or returned to Borrower for such purposes as Lender may designate. Ifthe insurance proceeds are held by Lender to reimburse Borrower for the cost of restoration and repair of the Property, the Property shall be restored to the equivalent of its original condition or such other condition as Lender may approve in writing. Lender may, at Lender's option, condition disbursement of said proceeds on Lender's approval of such plans and specifications of an architect satisfactory to Lender, contractor's cost estimates, architect's certificates, waivers of liens, sworn 1048094.1 4