DEPOSITED SHALL HEREINAFTER BE REFERRED TO AS
BORROWER'S "REPLACEMENT RESERVE FUND" AND THE ACCOUNT IN WHICH SUCH AMOUNTS ARE
HELD SHALL HEREINAFTER BE REFERRED TO AS BORROWER'S "REPLACEMENT RESERVE
ACCOUNT".
LENDER MAY REASSESS ITS ESTIMATE OF THE AMOUNT NECESSARY FOR THE
REPLACEMENT RESERVE FUND FROM TIME TO TIME BASED UPON AN UPDATED ENGINEERING
REPORT OF THE PROPERTY, AND MAY INCREASE THE MONTHLY AMOUNTS REQUIRED TO BE
DEPOSITED INTO THE REPLACEMENT RESERVE FUND UPON THIRTY (30) DAYS NOTICE TO
BORROWER IF LENDER DETERMINES IN ITS REASONABLE DISCRETION THAT AN INCREASE IS
NECESSARY TO MAINTAIN THE PROPER MAINTENANCE AND OPERATION OF THE PROPERTY.
NOTWITHSTANDING THE FOREGOING, LENDER SHALL WAIVE THE REQUIREMENT FOR MONTHLY
DEPOSITS TO THE REPLACEMENT RESERVE FUND UNTIL SUCH TIME AS EITHER LENDER
DETERMINES THAT THE PROPERTY IS NOT BEING PROPERLY MAINTAINED OR THE TANGIBLE
NET WORTH OF INDEMNITOR FALLS BELOW $250,000,000, IN WHICH CASE (A) BORROWER
SHALL PROMPTLY DEPOSIT WITH LENDER GREATER OF (I) THE AMOUNT OF PREVIOUS
DEPOSITS THAT HAVE BEEN WAIVED LESS AMOUNTS ACTUALLY EXPENDED BY BORROWER FOR
REPLACEMENTS AND REPAIRS DURING THE PERIOD THAT SUCH DEPOSITS WERE WAIVED OR
(II) AN AMOUNT DETERMINED AT THAT TIME AS NECESSARY FOR THE COMPLETION OF ANY
DEFERRED MAINTENANCE AND TO COMPLETE ANY ONGOING REPLACEMENTS AS AND WHEN
NECESSARY TO KEEP THE PROPERTY IN GOOD REPAIR AND CONDITION, BASED ON AN
ENGINEERING REPORT PREPARED BY AN ENGINEER ACCEPTABLE TO LENDER (THE
"REPLACEMENT RESERVE SHORTFALL"); PROVIDED THAT IN NO EVENT SHALL THE
REPLACEMENT RESERVE SHORTFALL EXCEED THIRTY-SIX TIMES THE REPLACEMENT RESERVE
MONTHLY DEPOSIT, AND (B) BORROWER SHALL THEREAFTER MAKE THE MONTHLY DEPOSITS TO
THE REPLACEMENT RESERVE FUND UNTIL SUCH TIME AS LENDER DETERMINES IN ITS SOLE
DISCRETION THAT SUCH MONTHLY DEPOSITS ARE NOT NECESSARY FOR THE PROPER
MAINTENANCE OF THE PROPERTY.
PURSUANT TO THE INDEMNITY AGREEMENT, INDEMNITOR
HAS GUARANTEED TO LENDER THE PAYMENT OF THE REPLACEMENT RESERVE SHORTFALL.
73
7.3.2
DISBURSEMENTS FROM REPLACEMENT RESERVE ACCOUNT.
(A)
LENDER SHALL MAKE DISBURSEMENTS FROM THE REPLACEMENT RESERVE
ACCOUNT TO PAY BORROWER ONLY FOR THE COSTS OF THE REPLACEMENTS.
LENDER SHALL
NOT BE OBLIGATED TO MAKE DISBURSEMENTS FROM THE REPLACEMENT RESERVE ACCOUNT TO
REIMBURSE BORROWER FOR THE COSTS OF ROUTINE MAINTENANCE TO THE PROPERTY OR FOR
COSTS WHICH ARE TO BE REIMBURSED FROM THE REQUIRED REPAIR FUND (IF ANY).
(B)
LENDER SHALL, UPON WRITTEN REQUEST FROM BORROWER AND SATISFACTION
OF THE REQUIREMENTS SET FORTH IN THIS SECTION 7.3.2, DISBURSE TO BORROWER
AMOUNTS FROM THE REPLACEMENT RESERVE ACCOUNT NECESSARY TO PAY FOR THE ACTUAL
APPROVED COSTS OF REPLACEMENTS OR TO REIMBURSE BORROWER THEREFOR, UPON
COMPLETION OF SUCH REPLACEMENTS (OR, UPON PARTIAL COMPLETION IN THE CASE OF
REPLACEMENTS MADE PURSUANT TO SECTION 7.3.2(E)) AS DETERMINED BY LENDER.
IN NO
EVENT SHALL LENDER BE OBLIGATED TO DISBURSE FUNDS FROM THE REPLACEMENT RESERVE
ACCOUNT IF A DEFAULT OR AN EVENT OF DEFAULT EXISTS.
(C)
EACH REQUEST FOR DISBURSEMENT FROM THE REPLACEMENT RESERVE ACCOUNT
SHALL BE IN A FORM SPECIFIED OR APPROVED BY LENDER AND SHALL SPECIFY (I) THE
SPECIFIC REPLACEMENTS FOR WHICH THE DISBURSEMENT IS REQUESTED, (II) THE