BE MADE BY BORROWER PURSUANT TO SECTION 5.2 HEREOF AND SECTION 7.1 HEREOF,
PROVIDED THAT BORROWER HAS PROMPTLY SUPPLIED LENDER WITH NOTICES OF ALL TAXES
AND INSURANCE PREMIUMS DUE AND PAID ANY DEFICIENCY BETWEEN THE AMOUNTS HELD IN
THE TAX AND INSURANCE SUBACCOUNT AND THE AMOUNTS DUE WITH RESPECT TO SUCH TAXES
AND INSURANCE PREMIUMS, OR (B) REIMBURSE BORROWER FOR SUCH AMOUNTS UPON
PRESENTATION OF EVIDENCE OF PAYMENT; SUBJECT, HOWEVER, TO BORROWER'S RIGHT TO
CONTEST TAXES IN ACCORDANCE WITH SECTION 5.2 HEREOF.
IN MAKING ANY PAYMENT
RELATING TO TAXES AND INSURANCE PREMIUMS, LENDER MAY DO SO ACCORDING TO ANY
BILL, STATEMENT OR ESTIMATE PROCURED FROM THE APPROPRIATE PUBLIC OFFICE (WITH
RESPECT TO TAXES) OR INSURER OR AGENT (WITH RESPECT TO INSURANCE PREMIUMS),
WITHOUT INQUIRY INTO THE ACCURACY OF SUCH BILL, STATEMENT OR ESTIMATE OR INTO
THE VALIDITY OF ANY TAX, ASSESSMENT, SALE, FORFEITURE, TAX LIEN OR TITLE OR
CLAIM THEREOF.
22
3.3.2
GUARANTY IN LIEU OF TAX AND INSURANCE DEPOSITS.
IN LIEU OF A REQUIREMENT
FOR MONTHLY DEPOSITS BY BORROWER INTO THE TAX AND INSURANCE SUBACCOUNT,
GUARANTOR, PURSUANT TO THE GUARANTY, HAS (AMONG OTHER OBLIGATIONS THEREUNDER)
GUARANTEED PAYMENT IN FULL OF ALL TAXES AND INSURANCE PREMIUMS AND AGREED TO PAY
TO LENDER, UPON LENDER'S DEMAND FOLLOWING THE OCCURRENCE AND DURING THE
CONTINUANCE OF AN EVENT OF DEFAULT, AN AMOUNT EQUAL TO THE GUARANTY LIMIT
AMOUNT, DETERMINED AS THE SUM OF VARIOUS AMOUNTS, INCLUDING AN AMOUNT (INITIALLY
EQUAL TO $6,230,661) EQUAL TO THE SUM OF THE ESTIMATED ANNUAL TAXES AND
INSURANCE PREMIUMS (AS SUCH ESTIMATE MAY INCREASE FROM TIME TO TIME, AS
REASONABLY DETERMINED BY LENDER, THE "TAX AND INSURANCE RESERVE OFFSET
AMOUNT").
UPON THE OCCURRENCE OF AN EVENT OF DEFAULT (AND WITHOUT LIMITING ANY
RIGHTS OR REMEDIES AVAILABLE TO LENDER IN CONNECTION THEREWITH), BORROWER SHALL
MAKE MONTHLY DEPOSITS INTO THE TAX AND INSURANCE SUBACCOUNT ON EACH PAYMENT DATE
IN AN AMOUNT EQUAL TO THE SUM OF (I) ONE-TWELFTH (1/12TH) OF THE TAXES THAT
LENDER ESTIMATES WILL BE PAYABLE DURING THE NEXT TWELVE (12) MONTHS IN ORDER TO
ACCUMULATE WITH LENDER SUFFICIENT FUNDS TO PAY ALL SUCH TAXES AT LEAST THIRTY
(30) DAYS PRIOR TO THEIR RESPECTIVE DUE DATES AND (II) ONE-TWELFTH (1/12TH) OF
THE INSURANCE PREMIUMS THAT LENDER ESTIMATES WILL BE PAYABLE FOR THE RENEWAL OF
THE COVERAGE AFFORDED BY THE POLICIES UPON THE EXPIRATION THEREOF IN ORDER TO
ACCUMULATE WITH LENDER SUFFICIENT FUNDS TO PAY ALL SUCH INSURANCE PREMIUMS AT
LEAST THIRTY (30) DAYS PRIOR TO THE EXPIRATION OF THE POLICIES (SUCH MONTHLY
REQUIRED DEPOSIT AMOUNT, AS ADJUSTED BY LENDER FROM TIME TO TIME IN THE EVENT OF
INCREASES OR DECREASES IN ANNUAL ESTIMATED TAXES AND INSURANCE PREMIUMS, THE
"MONTHLY TAX AND INSURANCE DEPOSIT").
IF LENDER RECEIVES THE TAX AND INSURANCE
RESERVE OFFSET AMOUNT FROM GUARANTOR UNDER THE GUARANTY, LENDER SHALL TRANSFER
THE SAME TO THE TAX AND INSURANCE SUBACCOUNT TO BE APPLIED AS PROVIDED IN
SECTION 3.1.1 ABOVE, SUBJECT TO LENDER'S RIGHT TO APPLY THE SAME OTHERWISE AS
SET FORTH IN SECTION 3.10 BELOW.
3.4
Capital Expense