OR WILL NOT
BE SUFFICIENT TO PAY TAXES AND INSURANCE PREMIUMS BY THE DATES SET FORTH ABOVE,
LENDER SHALL NOTIFY BORROWER OF SUCH DETERMINATION AND BORROWER SHALL INCREASE
ITS MONTHLY PAYMENTS TO LENDER BY 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
THE TAX AND INSURANCE ESCROW FUND PROVIDED THAT: (I) NO EVENT OF DEFAULT HAS
OCCURRED, AND (II) BORROWER PAYS ALL TAXES PRIOR TO DELINQUENCY AND INSURANCE
PREMIUMS AS THE SAME BECOME DUE AND PAYABLE AND DELIVERS TO LENDER EVIDENCE OF
SUCH PAYMENT PURSUANT TO SECTION 5.1.2 HEREOF.
SECTION 7.3
REPLACEMENTS AND REPLACEMENT
RESERVE.
7.3.1
REPLACEMENT RESERVE FUND.
BORROWER SHALL PAY TO
LENDER ON EACH PAYMENT DATE THE SUM OF $9,360.50 (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
FUND" AND THE ACCOUNT IN WHICH SUCH AMOUNTS ARE HELD SHALL
70
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, 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 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 MORTGAGE IN ACCORDANCE WITH SECTION 2.5
HEREOF.
NOTWITHSTANDING THE FOREGOING, BORROWER'S OBLIGATION TO MAKE MONTHLY
DEPOSITS TO THE REPLACEMENT RESERVE FUND 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 FUND.
(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