THE AMOUNT THAT LENDER ESTIMATES IS SUFFICIENT TO MAKE UP THE
DEFICIENCY AT LEAST THIRTY (30) DAYS PRIOR TO DELINQUENCY OF THE TAXES OR
INSURANCE PREMIUMS.
NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN,
BORROWER SHALL NOT BE REQUIRED TO MAKE MONTHLY DEPOSITS WITH RESPECT TO (A) AND
(B) ABOVE PROVIDED THAT: (I) NO EVENT OF DEFAULT HAS OCCURRED, AND (II) BORROWER
PAYS ALL TAXES PRIOR TO DELINQUENCY AND DELIVERS TO LENDER EVIDENCE OF SUCH
PAYMENT PURSUANT TO SECTION 5.1.2 HEREOF (WITH RESPECT TO CLAUSE (A) ABOVE) AND
ALL INSURANCE PREMIUMS FOR THE POLICIES REQUIRED UNDER SECTION 6.1(A) HEREOF
WITHOUT ANY LAPSE OF COVERAGE ON THE PROPERTY (WITH RESPECT TO CLAUSE (B)
ABOVE).
71
SECTION 7.3
REPLACEMENTS AND REPLACEMENT RESERVE.
7.3.1
REPLACEMENT RESERVE FUNDS.
BORROWER SHALL PAY TO LENDER ON EACH
PAYMENT DATE THE SUM OF $6,670.00 (THE "REPLACEMENT RESERVE MONTHLY DEPOSIT")
FOR REPLACEMENTS AND REPAIRS REQUIRED TO BE MADE TO THE PROPERTY DURING THE
CALENDAR YEAR (COLLECTIVELY, THE "REPLACEMENTS").
AMOUNTS SO DEPOSITED SHALL
HEREINAFTER BE REFERRED TO AS BORROWER'S "REPLACEMENT RESERVE FUNDS" AND THE
ACCOUNT IN WHICH SUCH AMOUNTS ARE HELD SHALL HEREINAFTER BE REFERRED TO AS
BORROWER'S "REPLACEMENT RESERVE ACCOUNT".
NOTWITHSTANDING THE FOREGOING, IF THE
REPLACEMENT RESERVE FUNDS SHALL AT ANY TIME EQUAL OR EXCEED $240,105.00 (THE
"REPLACEMENT RESERVE CAP"), THEN BORROWER'S OBLIGATION TO MAKE THE REPLACEMENT
RESERVE MONTHLY DEPOSIT SHALL BE SUSPENDED UNTIL SUCH TIME AS THE REPLACEMENT
RESERVE FUNDS ARE LESS THAN THE REPLACEMENT RESERVE CAP.
LENDER MAY REASSESS
ITS ESTIMATE OF THE AMOUNT NECESSARY FOR THE REPLACEMENT RESERVE FUNDS FROM TIME
TO TIME, AND MAY INCREASE THE MONTHLY AMOUNTS REQUIRED TO BE DEPOSITED INTO THE
REPLACEMENT RESERVE ACCOUNT UPON THIRTY (30) DAYS NOTICE TO BORROWER IF LENDER
DETERMINES IN ITS COMMERCIALLY REASONABLE DISCRETION BASED UPON UPDATED
ENGINEERING REPORTS OR INSPECTIONS OF THE PROPERTY THAT AN INCREASE IS NECESSARY
TO MAINTAIN THE PROPER MAINTENANCE AND OPERATION OF THE PROPERTY.
ANY AMOUNT
HELD IN THE REPLACEMENT RESERVE ACCOUNT AND ALLOCATED FOR THE PROPERTY SHALL BE
RETAINED BY LENDER AND CREDITED TOWARD THE FUTURE REPLACEMENT RESERVES MONTHLY
DEPOSITS REQUIRED BY LENDER HEREUNDER IN THE EVENT THE PROPERTY IS RELEASED FROM
THE LIEN OF THE SECURITY INSTRUMENT IN ACCORDANCE WITH SECTION 2.5 HEREOF.
NOTWITHSTANDING THE FOREGOING, BORROWER'S OBLIGATION TO MAKE MONTHLY DEPOSITS TO
THE REPLACEMENT RESERVE ACCOUNT SHALL BE SUSPENDED PROVIDED THAT NO EVENT OF
DEFAULT OCCURS.
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, REPLACEMENTS OF INVENTORY OR FOR
COSTS WHICH ARE TO BE REIMBURSED FROM THE ROLLOVER RESERVE ACCOUNT.
(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