UPON THE OCCURRENCE AND
DURING THE
110
CONTINUANCE OF ANY EVENT OF DEFAULT, BORROWER SHALL, SUBJECT TO THE TERMS AND
PROVISIONS OF SECTIONS 12.2.3, 12.2.4
AND SECTION 12.8
HEREOF, DEPOSIT INTO
THE INSURANCE RESERVE ACCOUNT WITHIN TEN (10) BUSINESS DAYS AFTER RECEIPT OF
NOTICE FROM LENDER, AN AMOUNT REASONABLY DETERMINED BY LENDER TO BE EQUAL TO ALL
AMOUNTS WHICH WOULD HAVE BEEN ON DEPOSIT IN THE INSURANCE RESERVE ACCOUNT AS OF
THE OCCURRENCE OF SUCH EVENT OF DEFAULT ASSUMING THAT BORROWER SHALL HAVE MADE
ALL DEPOSITS REQUIRED TO BE MADE PURSUANT TO SECTION 12.2
SINCE THE CLOSING
DATE HAD THE WAIVER OF DEPOSITS PROVIDED FOR ABOVE IN THIS SECTION 12.2.2 NOT
BEEN IN EFFECT, GIVING DUE CONSIDERATION TO ALL AMOUNTS THAT WOULD HAVE BEEN
PAYABLE BY A DISBURSEMENT FROM SUCH INSURANCE RESERVE ACCOUNT SINCE THE CLOSING
DATE.
12.2.3
NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN, IN LIEU OF
MAKING MONTHLY DEPOSITS TO THE INSURANCE RESERVE ACCOUNT FOLLOWING THE
OCCURRENCE AND DURING THE CONTINUANCE OF AN EVENT OF DEFAULT, BORROWER SHALL BE
PERMITTED TO DELIVER TO LENDER (A) CASH IN AN AMOUNT EQUAL TO TWELVE (12) MONTHS
OF THE MONTHLY INSURANCE RESERVE AMOUNT, OR (B) A LETTER OF CREDIT IN AN AMOUNT
EQUAL TO TWELVE (12) MONTHS OF THE MONTHLY INSURANCE RESERVE AMOUNT.
12.2.4
NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, TO THE EXTENT THAT
ANY OF THE INSURANCE REQUIRED TO BE MAINTAINED BY BORROWER IS EFFECTED UNDER A
BLANKET POLICY, BORROWER SHALL NOT BE REQUIRED TO MAKE DEPOSITS OF THE MONTHLY
INSURANCE RESERVE AMOUNT.
SECTION 12.3
CAPITAL EXPENDITURES RESERVE ACCOUNT.
12.3.1
SUBJECT TO THE PROVISIONS OF SECTIONS 12.3.5 AND 12.3.6, BORROWER
SHALL DEPOSIT WITH LENDER, TO BE HELD IN THE CAPITAL EXPENDITURES RESERVE
ACCOUNT, ON EACH PAYMENT DATE AN AMOUNT EQUAL TO $7,000 FOR ANNUAL CAPITAL
EXPENDITURES (SAID MONTHLY AMOUNTS HEREINAFTER CALLED THE "MONTHLY CAPITAL
EXPENDITURES RESERVE AMOUNT", AND THE AGGREGATE AMOUNT OF FUNDS HELD IN THE
CAPITAL EXPENDITURES RESERVE ACCOUNT FROM TIME TO TIME, THE "CAPITAL EXPENDITURE
FUNDS" ).
12.3.2
LENDER SHALL DISBURSE TO BORROWER THE CAPITAL EXPENDITURE FUNDS UPON
SATISFACTION BY BORROWER OF EACH OF THE FOLLOWING CONDITIONS: (A) BORROWER SHALL
SUBMIT A REQUEST FOR PAYMENT TO LENDER AT LEAST TEN (10) DAYS PRIOR TO THE DATE
ON WHICH BORROWER REQUESTS SUCH PAYMENT BE MADE AND SPECIFIES THE CAPITAL
EXPENDITURES TO BE PAID OR REIMBURSED; (B) ON THE DATE SUCH REQUEST IS RECEIVED
BY LENDER AND ON THE DATE SUCH PAYMENT IS TO BE MADE, NO EVENT OF DEFAULT SHALL
EXIST AND REMAIN UNCURED; (C) LENDER SHALL HAVE RECEIVED A CERTIFICATE FROM
BORROWER (I) STATING THAT THE ITEMS TO BE FUNDED BY THE REQUESTED DISBURSEMENT
ARE CAPITAL EXPENDITURES, (II) STATING THAT THE WORK TO BE PAID FOR (OR
REIMBURSED TO BORROWER) BY THE REQUESTED DISBURSEMENT HAS BEEN PERFORMED IN A
GOOD AND WORKMANLIKE MANNER AND IN ACCORDANCE WITH ALL APPLICABLE LEGAL
REQUIREMENTS, AND (III) STATING THAT EACH PERSON THAT SUPPLIED MATERIALS OR
LABOR IN CONNECTION WITH THE CAPITAL EXPENDITURES TO BE FUNDED BY THE REQUESTED
DISBURSEMENT HAS BEEN