REPAIRS AND
ENVIRONMENTAL REMEDIAL WORK AT THE PROPERTY DESCRIBED ON SCHEDULE 2 (THE
"REQUIRED REPAIRS"), IF ANY, WITHIN ONE (1) YEAR OF THE DATE HEREOF OR SUCH
SHORTER PERIOD OF TIME FOR SUCH ITEM SET FORTH ON SCHEDULE 2, IF ANY.
ALL SUCH
REPAIRS AND REMEDIAL WORK SHALL BE COMPLETED IN A GOOD AND WORKMANLIKE MANNER IN
ACCORDANCE WITH ALL APPLICABLE LEGAL REQUIREMENTS AND FREE FROM ALL LIENS NOT
PREVIOUSLY APPROVED BY LENDER.
3.3
TAX AND INSURANCE SUBACCOUNT.
3.3.1
MONTHLY DEPOSITS.
SUBJECT TO THE TERMS AND PROVISIONS
OF SECTION 3.3.2 BELOW, BORROWER SHALL PAY TO LENDER ON EACH PAYMENT DATE
(I) ONE-TWELFTH OF THE TAXES THAT LENDER ESTIMATES WILL BE PAYABLE DURING THE
NEXT 12 MONTHS IN ORDER TO ACCUMULATE WITH LENDER SUFFICIENT FUNDS TO PAY ALL
SUCH TAXES AT LEAST THIRTY (30) DAYS PRIOR TO THE DELINQUENCY DATE AND
(II) ONE-TWELFTH 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 30 DAYS PRIOR TO THE EXPIRATION OF THE POLICIES.
SUCH AMOUNTS WILL BE TRANSFERRED BY LENDER TO A SUBACCOUNT (THE "TAX AND
INSURANCE SUBACCOUNT").
PROVIDED THAT NO MONETARY EVENT OF DEFAULT OR MATERIAL
NON-MONETARY EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING, LENDER WILL
(A) APPLY FUNDS IN THE TAX AND INSURANCE SUBACCOUNT TO PAYMENTS OF TAXES AND
INSURANCE PREMIUMS REQUIRED TO BE MADE BY BORROWER PURSUANT TO SECTIONS 5.2 AND
7.1, PROVIDED THAT BORROWER HAS PROMPTLY SUPPLIED LENDER WITH NOTICES OF ALL
TAXES AND INSURANCE PREMIUMS DUE, 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.
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.
IF LENDER DETERMINES IN ITS REASONABLE JUDGMENT THAT THE FUNDS IN THE
TAX AND INSURANCE SUBACCOUNT WILL BE INSUFFICIENT TO PAY (OR IN EXCESS OF) THE
TAXES OR INSURANCE PREMIUMS NEXT COMING DUE, LENDER MAY INCREASE (OR
DECREASE) THE MONTHLY CONTRIBUTION REQUIRED TO BE MADE BY BORROWER TO THE TAX
AND INSURANCE SUBACCOUNT.
3.3.2
WAIVER OF MONTHLY DEPOSITS.
NOTWITHSTANDING THE
FOREGOING, PROVIDED NO EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING AND
BORROWER HAS PROVIDED TO LENDER EVIDENCE OF PAYMENT OF THE TAXES AND THE
INSURANCE PREMIUMS IN THE MANNER AND WITHIN THE TIME PERIODS SET FORTH HEREIN,
LENDER SHALL NOT REQUIRE BORROWER TO MAKE THE MONTHLY DEPOSITS REQUIRED UNDER
SECTION 3.3.1 ABOVE.
UPON NOTICE BY LENDER FOLLOWING THE OCCURRENCE OF AN EVENT
OF DEFAULT OR BORROWER'S FAILURE TO PROVIDE SUCH EVIDENCE OF PAYMENT, BORROWER
SHALL