Common use of Replacement Escrow Fund Clause in Contracts

Replacement Escrow Fund. (a) For the partial year period commencing on the date hereof, and for each calendar year thereafter, Borrower shall submit to Lender, as part of the Annual Budget required under this Agreement, a budget for fixtures, furniture and equipment and other replacements and repairs required to be made to the Properties during the calendar year (collectively, the "Replacements"). Such Annual Budget shall provide for Replacements equal to or greater than four percent (4%) of annual Operating Revenues on an aggregate basis for all Properties (the "Replacements Budget"). (b) Borrower shall deposit with Lender on each Payment Date an amount equal to one-twelfth of the amount of the Replacement Budget for the then-current calendar year (the "Replacement Escrow Fund Monthly Deposit") as security for completion by Borrower of the Replacements (the "Replacement Escrow Fund"); provided, however, Borrower shall not be required to make such Replacement Escrow Fund Monthly Deposit so long as neither an Event of Default nor a Trigger Event has occurred and within twenty (20) days following the end of each calendar quarter, Borrower provides Lender with reports, in form and substance reasonably satisfactory to Lender, of the expenditures made by Borrower for the Replacements for each Property during such calendar quarter. If the actual expenditures made by Borrower for the Replacements for all of the Properties, in the aggregate, for the preceding four (4) calendar quarters is less than the Replacements Budget for all of the Properties, in the aggregate, Borrower shall deposit an amount equal to any such difference in the Replacement Escrow Fund for disbursement pursuant to Section 3.3. Notwithstanding the preceding sentence to the contrary, for purposes of calculating the amount of any such deposit required to be made by Borrower, actual expenditures made by Borrower shall not include any amounts disbursed to Borrower from the Replacement Escrow Fund. In the event Borrower fails to provide Lender with reasonably satisfactory evidence of the expenditures made by Borrower for the Replacements during each calendar quarter within twenty (20) days following the end of such calendar quarter, Borrower shall deposit an amount equal to one-quarter of the Replacements Budget in the Replacement Escrow Fund for disbursement pursuant to Section 3.3.

Replacement Escrow Fund. (a) For the partial year period commencing on the date hereof, and for Mortgagor shall pay to Mortgagee during each calendar year thereafter, Borrower shall submit to Lender, as part the aggregate amount of the Annual Budget required under this Agreement, a budget $325.00 per residential unit per calendar year for fixtures, furniture and equipment and other replacements and capital repairs required to be made to the Properties during Mortgaged Property, payable in twelve equal installments each on the tenth day of each calendar year (collectively, the "Replacements"). Such Annual Budget shall provide for Replacements equal to or greater than four percent (4%) of annual Operating Revenues on an aggregate basis for all Properties (the "Replacements Budget"). (b) Borrower shall deposit with Lender on each Payment Date an amount equal to one-twelfth of the amount of the Replacement Budget for the then-current calendar year (the "Replacement Escrow Fund Monthly Deposit") as security for completion by Borrower of the Replacements month (the "Replacement Escrow Fund"); provided, however, Borrower collection of monthly escrow deposits for such purpose shall be limited to $250.00 per unit per calendar year so long as Mortgagee is satisfied as to all of the following: (a) There must be no pending or uncured event of default; and (b) the Mortgaged Property is maintained as required hereunder and as confirmed by Xxxxxxxxx's regular inspections (at Xxxxxxxxx's expense if a third party is required). The amount of such annual and monthly payments for the Replacement Escrow Fund for any calendar year or portion thereof shall not be required to make such Replacement Escrow Fund Monthly Deposit so long as neither an Event of Default nor a Trigger Event has occurred and within twenty (20) days following increased during the end of each calendar quarter, Borrower provides Lender with reports, in form and substance reasonably satisfactory to Lender, term of the expenditures made by Borrower for Loan unless there is a material, adverse change in the Replacements for each Property during such calendar quarter. If the actual expenditures made by Borrower for the Replacements for all condition of the Properties, Mortgaged Property or in the aggregatecosts needed to maintain the Mortgaged Property, for the preceding four (4) calendar quarters is less than the Replacements Budget for all of the Properties, as determined in the aggregate, Borrower shall deposit an amount equal sole reasonable discretion of Mortgagee. Mortgagor hereby pledges to Mortgagee (and grants to Mortgagee a lien on and security interest in) any such difference and all monies now or hereafter deposited in the Replacement Escrow Fund as additional security for disbursement pursuant the payment of the Debt. As required in Section 18 below, Xxxxxxxxx shall deliver to Section 3.3. Notwithstanding Mortgagee for Mortgagee's review and approval, a capital expenditure budget (the preceding sentence "Budget") itemizing the replacements and capital repairs which are anticipated to be made to the contraryMortgaged Property during the next immediately succeeding calendar year (provided, however, such proposed budget may contain a reasonable contingency reserve for purposes the same). Mortgagee may, upon notice to Mortgagor and subject to the terms and conditions of calculating this Section 6, adjust the amount of any such deposit monthly amounts required to be made by Borrower, actual expenditures made by Borrower shall not include any amounts disbursed to Borrower from deposited into the Replacement Escrow Fund. In the event Borrower fails Fund to provide Lender with reasonably satisfactory evidence of the expenditures made by Borrower for the Replacements during each calendar quarter within twenty (20) days following the end of such calendar quarter, Borrower shall deposit an a monthly amount equal to one-quarter twelfth of the Replacements total amount specified in each approved Budget. So long as no-Event of Default exists and is continuing, Mortgagee shall make disbursements from the Replacement Escrow Fund for items specified in each approved Budget on a quarterly basis in increments of no less than $5,000.00 upon delivery to Mortgagee by Mortgagor of Mortgagee's standard form of draw request accompanied by copies of paid or unpaid invoices for the amounts requested and, if required by Mortgagee and customarily obtained in the location where the Mortgaged Property is located, lien waivers and releases from all parties furnishing materials and/or services in connection with the requested payment, delivery of such certificates and certifications as Mortgagee may require (including but not limited to a new certificate of occupancy for the portion of the Improvements covered by such repairs, if a new certificate of occupancy is required by applicable law, or a certification by Mortgagor that no new certificate of occupancy is required) and for disbursement requests in excess of $20,000.00, a certification from an inspecting architect or engineer or other third-party acceptable to Mortgagee describing the completed repairs or capital improvements, verifying the completion of the completed work and the compliance with applicable law and reimbursement of all out-of pocket inspection fees incurred by Mortgagee. Mortgagee may require an inspection of the Mortgaged Property prior to making a quarterly disbursement in order to verify completion of replacements and repairs. Following an Event of Default, Mortgagee reserves the right to make any disbursement from the Replacement Escrow Fund directly to the party furnishing materials and/or services. The Replacement Escrow Fund is solely for the protection of Mortgagee and entails no responsibility or obligation on Mortgagee's part beyond the payment of the costs and expenses described in this Section in accordance with the terms hereof and beyond the allowing of a due credit for the sums actually received. In the event that the amounts on deposit or available in the Replacement Escrow Fund are inadequate to pay the costs of such repairs or capital expenditures, Mortgagor shall pay the amount of such deficiency. Until expended or applied as above provided, any amounts in the Replacement Escrow Fund shall constitute additional security for disbursement pursuant the Debt. Upon the occurrence of an Event of Default, Mortgagee may apply any sums then present in the Replacement Escrow Fund to Section 3.3.the payment of the Debt in any order in its sole discretion. Upon payment of the Debt and performance by Mortgagor of all its obligations under this Mortgage and the other Loan Documents, any amounts remaining in the Replacement Escrow Fund shall be refunded to Mortgagor. The Replacement Escrow Fund shall not constitute a trust fund and may be commingled with other monies held by Mortgagee. The Funds shall be held in an account in Mortgagee's name (or such other account name style as Mortgagee may elect) at a financial institution or other depository selected by Mortgagee (or its servicer) in its sole discretion (the

Replacement Escrow Fund. (a) For the partial year period commencing Mortgagor shall pay to Mortgagee on the date hereof, and for first day of each calendar year thereafter, Borrower shall submit to Lender, as part month one-twelfth of the Annual Budget required under this Agreement, a budget for fixtures, furniture and equipment and other replacements and repairs required to be made to the Properties during the calendar year (collectively, the "Replacements"). Such Annual Budget shall provide for Replacements equal to or greater than four percent (4%) of annual Operating Revenues on an aggregate basis for all Properties (the "Replacements Budget"). (b) Borrower shall deposit total revenues of Mortgagor arising out of or in connection with Lender on each Payment Date an amount equal to one-twelfth of the Mortgaged Property during the preceding calendar year as the amount of estimated by Mortgagee in its sole discretion to be due for replacements and capital repairs and repairs and replacements to furniture, fixtures and equipment required to be made to the Replacement Budget for the then-current Mortgaged Property during each calendar year (the "Replacement Escrow Fund Monthly Deposit") as security for completion by Borrower of the Replacements (the "Replacement Escrow Fund"); provided, however, Borrower shall not be required . Mortgagor hereby pledges to make such Replacement Escrow Fund Monthly Deposit so long as neither an Event of Default nor a Trigger Event has occurred Mortgagee any and within twenty (20) days following the end of each calendar quarter, Borrower provides Lender with reports, in form and substance reasonably satisfactory to Lender, of the expenditures made by Borrower for the Replacements for each Property during such calendar quarter. If the actual expenditures made by Borrower for the Replacements for all of the Properties, in the aggregate, for the preceding four (4) calendar quarters is less than the Replacements Budget for all of the Properties, in the aggregate, Borrower shall deposit an amount equal to any such difference monies now or hereafter deposited in the Replacement Escrow Fund as additional security for disbursement pursuant to Section 3.3the payment of the Debt. Notwithstanding the preceding sentence to the contrary, for purposes Mortgagee may reassess its estimate of calculating the amount of any such deposit necessary for the Replacement Escrow Fund from time to time in its sole discretion, and may adjust the monthly amounts required to be made by Borrower, actual expenditures made by Borrower deposited into the Replacement Escrow Fund upon thirty (30) days notice to Mortgagor. Mortgagee shall not include any amounts disbursed to Borrower make disbursements from the Replacement Escrow FundFund as requested by Mortgagor, and approved by Mortgagee in its sole discretion, on a quarterly basis in increments of no less than $5,000.00 upon delivery by Mortgagor of Mortgagee's standard form of draw request accompanied by copies of paid invoices for the amounts requested and, if required by Mortgagee, lien waivers and releases from all parties furnishing materials and/or services in connection with the requested payment. In the event Borrower fails to provide Lender with reasonably satisfactory evidence Mortgagee may require an inspection of the expenditures made Mortgaged Property at Mortgagor's expense prior to making a quarterly disbursement in order to verify completion of replacements and repairs for which reimbursement is sought. The Replacement Escrow Fund shall be held in an interest bearing account in Mortgagee's name at a financial institution selected by Borrower for Mortgagee in its sole discretion and subject to an administrative fee determined by Mortgagee in its sole discretion. Upon the Replacements during each calendar quarter within twenty (20) days following the end occurrence of such calendar quarteran Event of Default, Borrower shall deposit an amount equal to one-quarter of the Replacements Budget Mortgagee may apply any sums then present in the Replacement Escrow Fund to the payment of the Debt in any order in its sole discretion. Until expended or applied as above provided, the Replacement Escrow Fund shall constitute additional security for disbursement pursuant to Section 3.3the Debt. The Replacement Escrow Fund shall not constitute a trust fund and may be commingled with other monies held by Mortgagee. All earnings or interest on the Replacement Escrow Fund shall be and become part of such Replacement Escrow Fund and shall be disbursed as provided in this paragraph.

Replacement Escrow Fund. (a) For the partial year period commencing on the date hereof, and for each calendar year thereafter, Borrower shall submit to Lender, as part of the Annual Budget required under this Agreement, a budget for fixtures, furniture and equipment and other replacements and repairs required to be made to the Properties during the calendar year (collectively, the "Replacements"). Such Annual Budget shall provide for Replacements equal to or greater than four percent (4%) of annual Operating Revenues on an aggregate basis for all Properties (the "Replacements Budget"). (b) Borrower shall deposit with Lender on each Payment Date an amount equal to one-twelfth of the amount of the Replacement Budget for the then-current calendar year (the "Replacement Escrow Fund Monthly Deposit") as security for completion by Borrower of the Replacements (the "Replacement Escrow Fund"); provided, however, Borrower shall not be required to make such Replacement Escrow Fund Monthly Deposit so So long as neither an no Default or Event of Default nor a Trigger Event has occurred and within twenty (20) days following exists hereunder, Administrative Agent shall credit for Borrowers' account interest at the end of each calendar quarterinterest rate actually available to Administrative Agent's servicer on the funds held in such account, Borrower provides Lender with reports, as determined by Administrative Agent in form and substance reasonably satisfactory its sole discretion. Borrowers hereby pledge to Lender, Administrative Agent for the benefit of the expenditures made by Borrower for the Replacements for each Property during such calendar quarter. If the actual expenditures made by Borrower for the Replacements for Lenders, and grant a security interest in, any and all of the Properties, in the aggregate, for the preceding four (4) calendar quarters is less than the Replacements Budget for all of the Properties, in the aggregate, Borrower shall deposit an amount equal to any such difference monies now or hereafter deposited in the Replacement Escrow Fund as additional security for disbursement pursuant to Section 3.3the payment of the Loan. Notwithstanding the preceding sentence to the contrary, for purposes Administrative Agent may reasonably reassess its estimate of calculating the amount of any such deposit necessary for the Replacement Escrow Fund from time to time and may adjust the monthly amounts required to be made deposited into the Replacement Escrow Fund upon thirty (30) days notice to Borrowers. Administrative Agent shall make disbursements from the Replacement Escrow Fund as requested by BorrowerBorrowers, actual expenditures made and approved by Borrower Administrative Agent in its reasonable discretion, on a quarterly basis in increments of no less than $5,000.00 upon delivery by Borrowers of Administrative Agent's standard form of draw request accompanied by copies of paid invoices for the amounts requested and, if required by Administrative Agent for any draw request for an invoice exceeding $15,000.00, lien waivers and releases from all parties furnishing materials and/or services in connection with the requested payment. Administrative Agent may require an inspection of the Borrowing Base Assets at Borrowers' expense prior to making a quarterly disbursement in order to verify completion of replacements and repairs for which reimbursement is sought. The Replacement Escrow Fund shall not include be held without interest in Administrative Agent's name and may be commingled with Administrative Agent's general funds at financial institutions selected by Administrative Agent in its reasonable discretion. Upon the occurrence of an Event of Default, Administrative Agent may apply any amounts disbursed sums then present in the Replacement Escrow Fund to Borrower the payment of the Loan in any order in its reasonable discretion. Until expended or applied as above provided, the Replacement Escrow Fund shall constitute additional security for the Loan. Administrative Agent shall have no obligation to release any of the Replacement Escrow Fund while any Event of Default or Default exists. All costs and expenses incurred by Administrative Agent in the disbursement of any of the Replacement Escrow Fund shall be paid by Borrowers promptly upon demand or, at Administrative Agent's sole discretion, deducted from the Replacement Escrow Fund. In the event Borrower fails to provide Lender with reasonably satisfactory evidence of the expenditures made by Borrower for the Replacements during each calendar quarter within twenty (20) days following the end of such calendar quarter, Borrower shall deposit an amount equal to one-quarter of the Replacements Budget in the Replacement Escrow Fund for disbursement pursuant to Section 3.3.

Replacement Escrow Fund. (a) For the partial year period commencing on the date hereof, and for each calendar year thereafter, Borrower shall submit to Lender, as part of the Annual Budget required under this Agreement, a budget for fixtures, furniture and equipment and other replacements and repairs required to be made to the Properties during the calendar year (collectively, the "Replacements"). Such Annual Budget shall provide for Replacements equal to or greater than four percent (4%) of annual Operating Revenues as calculated both on an aggregate basis for all of the Properties (the "Replacements Budget") and on an individual basis for each Individual Property in order to determine the pro-rata percentage that the Operating Revenues from each Individual Property bears to the aggregate Operating Revenues from all of the Properties (the "Pro-Rata Percentage"). (b) Borrower shall deposit with Lender on each Payment Date an amount equal to one-twelfth of the amount of the Replacement Budget for the then-current calendar year (the "Replacement Escrow Fund Monthly Deposit") as security for completion by Borrower of the Replacements (the "Replacement Escrow Fund"); provided, however, Borrower shall not be required to make such Replacement Escrow Fund Monthly Deposit so long as neither an Event of Default nor a Trigger DSCR Event has not occurred and within twenty (20) days following the end of each calendar quarter, Borrower provides Lender with reports, in form and substance reasonably satisfactory to Lender, reports of the expenditures made by Borrower for the Replacements for each Property during such calendar quarter. If the actual expenditures made by Borrower for the Replacements for all of the Properties, in the aggregate, for the preceding four (4) calendar quarters is less than the Replacements Budget for all of the Properties, in the aggregatesuch calendar quarter, Borrower shall deposit an amount equal to any such difference in the Replacement Escrow Fund for disbursement pursuant to Section 3.3. Notwithstanding the preceding sentence to the contrary, for purposes of calculating the amount of any such deposit required to be made by Borrower, Borrower shall be reduced by the amount of any actual expenditures expenditure made by Borrower shall not include for any amounts disbursed Replacement completed prior to Borrower from the calendar quarter in which such Replacement Escrow Fundwas scheduled to be made pursuant to the Replacements Budget. In the event Borrower fails to provide Lender with reasonably satisfactory evidence of the expenditures made by Borrower for the Replacements during each calendar quarter within twenty (20) days following the end of such calendar quarter, Borrower shall deposit an amount equal to one-quarter of the Replacements Budget in the Replacement Escrow Fund for disbursement pursuant to Section 3.3. (c) Within ninety (90) days after the end of the calendar year 2002 and within ninety (90) days after the end of each calendar year thereafter, Borrower shall provide Lender with satisfactory reports of the expenditures made by Borrower for the Replacements for each Individual Property, which reports shall indicate that expenditures for each Individual Property made during the preceding three (3) calendar year period equal an amount no less than the product of (A) the Pro-Rata Percentage applicable to such Individual Property and (B) the total expenditures made by Borrower for the Replacements (including disbursements from the Replacement Escrow Fund) for all of the Properties during such three (3) year period (such amount, the "Allocable Amount"); provided, however, solely for purposes of calculating the Allocable Amount, an amount equal to four percent (4%) of Operating Revenues for such three (3) year period shall be applied if such amount is less than the actual amount of the total expenditures specified in the preceding subclause (B). If the amount expended by Borrower is less than the Allocable Amount, Borrower shall deposit an amount equal to any such difference in the Replacement Escrow Fund for disbursement solely for Replacements for the particular Individual Property and otherwise in accordance with Section 3.3.

Replacement Escrow Fund. (a) For the partial year period commencing Mortgagor shall enter into a Replacement Reserve Agreement which shall require Mortgagor to pay to Mortgagee on the date hereof, and for first day of each calendar year thereafter, Borrower shall submit to Lender, as part month one twelfth (1/12) of the Annual Budget required under this Agreement, a budget amount reasonably estimated by Mortgagee to be due for fixtures, furniture and equipment and other the replacements and capital repairs required to be made to the Properties Mortgaged Property during the calendar year (collectively, the "Replacements"). Such Annual Budget shall provide for Replacements equal to or greater than four percent (4%) of annual Operating Revenues on an aggregate basis for all Properties (the "Replacements Budget"). (b) Borrower shall deposit with Lender on each Payment Date an amount equal to one-twelfth of the amount of the Replacement Budget for the then-current calendar year (the "Replacement Escrow Fund Monthly Deposit") as security for completion by Borrower of the Replacements (the "Replacement Escrow FundREPLACEMENT ESCROW FUND"); provided, however, Borrower shall not be required to make such Replacement Escrow Fund Monthly Deposit so long as neither an Event of Default nor a Trigger Event has occurred and within twenty . At least thirty (2030) days following prior to the end of each calendar quarteryear, Borrower provides Lender with reportsMortgagor shall deliver to Mortgagee for Mortgagee's review and approval, in form a capital expenditure budget (the "BUDGET") itemizing the replacements and substance reasonably satisfactory capital repairs which are anticipated to Lender, of be made to the expenditures made by Borrower for the Replacements for each Mortgaged Property during such the next immediately succeeding calendar quarteryear. If Mortgagee may, upon notice to Mortgagor, adjust the actual expenditures made by Borrower for monthly amounts required to be deposited into the Replacements for all of the Properties, in the aggregate, for the preceding four (4) calendar quarters is less than the Replacements Budget for all of the Properties, in the aggregate, Borrower shall deposit an Replacement Escrow Fund to a monthly amount equal to any such difference one twelfth (1/12) of the total amount specified in each approved Budget. Mortgagee shall make disbursements from the Replacement Escrow Fund for items specified in each approved Budget or in the Replacement Reserve Agreement as set forth in such Agreement. Mortgagee may require an inspection of the Mortgaged Property prior to making a disbursement pursuant in order to Section 3.3verify completion of replacements and repairs. Notwithstanding Mortgagee reserves the preceding sentence right to the contrary, for purposes of calculating the amount of make any such deposit required to be made by Borrower, actual expenditures made by Borrower shall not include any amounts disbursed to Borrower disbursement from the Replacement Escrow FundFund directly to the party furnishing materials and/or services. In Provided that (i) the event Borrower fails to provide Lender with reasonably satisfactory evidence Mortgagor named herein is the owner of the expenditures made Mortgaged Property, (ii) there is no default by Borrower for Mortgagor under the Replacements during each calendar quarter within twenty Loan Documents and (20iii) days following the end of such calendar quarterMortgaged Property is being properly maintained by Mortgagor, Borrower shall deposit an amount equal then the monthly deposits to one-quarter of the Replacements Budget in the Replacement Escrow Fund may be suspended so long as the balance of the Replacement Escrow Fund is equal to at least twenty-four times the monthly deposit required (the "CAP AMOUNT"), it being understood that if any disbursements under the Replacement Reserve Agreement shall cause said balance to be less than the Cap Amount, or Loan No. 3212525 if such balance shall for disbursement pursuant any other reason be less than the Cap Amount, the monthly deposits shall resume until the balance of the Replacement Escrow Fund is again equal to Section 3.3the Cap Amount.

Replacement Escrow Fund. (a) For the partial year period commencing If initially or subsequently required by Mortgagee, Mortgagor shall pay to Mortgagee on the date hereof, and for first day of each calendar year thereafter, Borrower shall submit to Lender, as part month one-twelfth of the Annual Budget required under this Agreement, a budget product of multiplying the annual gross revenues from the Mortgaged Property (as reasonably estimated by Mortgagee from time to time) by three percent (the amount reasonably estimated by Mortgagee to be due for fixtures, furniture and equipment and other replacements and capital repairs required to be made to the Properties Mortgaged Property during the each calendar year year) (collectively, the "ReplacementsReplacement Escrow Fund"). Such Annual Budget Mortgagor hereby pledges (and grants a lien and security interest) to Mortgagee any and all monies now or hereafter deposited in the Replacement Escrow Fund as additional security for the payment of the Debt. As required in Section 18 below, Mortgagor shall provide deliver to Mortgagee for Replacements equal to or greater than four percent (4%) of annual Operating Revenues on an aggregate basis for all Properties Mortgagee's review and approval, a capital expenditure budget (the "Replacements Budget"). (b) Borrower shall deposit with Lender on each Payment Date an itemizing the replacements and capital repairs which are anticipated to be made to the Mortgaged Property during the next immediately succeeding calendar year. Mortgagee may, upon notice to Mortgagor, adjust the monthly amounts required to be deposited into the Replacement Escrow Fund to a monthly amount equal to one-twelfth of the total amount specified in each approved Budget. So long as no Event of Default exists and is continuing, Mortgagee shall make disbursements from the Replacement Budget for the then-current calendar year (the "Replacement Escrow Fund Monthly Deposit") as security for completion items specified in each approved Budget on a quarterly basis in increments of no less than $5,000.00 upon delivery by Borrower Mortgagor of the Replacements Mortgagee's standard form of draw request accompanied by copies of paid invoices (the "Replacement Escrow Fund")or unpaid invoices to be paid from such requested disbursement; provided, however, Borrower that disbursements with respect to unpaid invoices shall not be exceed $20,000 during any calendar quarter) for the amounts requested and, if required by Mortgagee, lien waivers and releases from all parties furnishing materials and/or services in connection with the requested payment, delivery of such certificates and certifications as Mortgagee may require, including but not limited to a new certificate of occupancy for the portion of the Improvements covered by such repairs, if a new certificate of occupancy is required by applicable law, or a certification by Mortgagor that no new certificate of occupancy is required and for disbursement requests in excess of $20,000.00, if requested by Mortgagee a certification from an inspecting architect or other third party acceptable to Mortgagee describing the completed repairs or capital improvements, verifying the completion of the completed work and the compliance with applicable law and reimbursement of all out-of-pocket inspection fees incurred by Mortgagee. Mortgagee may require an inspection of the Mortgaged Property prior to making a quarterly disbursement in order to verify completion of replacements and repairs. Mortgagee reserves the right to make such any disbursement from the Replacement Escrow Fund Monthly Deposit so long as neither an Event directly to the party furnishing materials and/or services. The Replacement Escrow Fund is solely for the protection of Default nor a Trigger Event has occurred Mortgagee and within twenty (20) days following entails no responsibility or obligation on Mortgagee's part beyond the end of each calendar quarter, Borrower provides Lender with reports, in form and substance reasonably satisfactory to Lender, payment of the expenditures made by Borrower costs and expenses described in this section in accordance with the terms hereof and beyond the allowing of due credit for the Replacements for each Property during such calendar quartersums actually received. If In the actual expenditures made by Borrower for event that the Replacements for all of the Properties, in the aggregate, for the preceding four (4) calendar quarters is less than the Replacements Budget for all of the Properties, in the aggregate, Borrower shall amounts on deposit an amount equal to any such difference or available in the Replacement Escrow Fund for disbursement pursuant are inadequate to Section 3.3. Notwithstanding pay the preceding sentence to the contrarycosts of such repairs or capital expenditure, for purposes of calculating Mortgagor shall pay the amount of any such deposit required to be made by Borrowerdeficiency. Until expended or applied as above provided, actual expenditures made by Borrower shall not include any amounts disbursed to Borrower from the Replacement Escrow Fund. In the event Borrower fails to provide Lender with reasonably satisfactory evidence of the expenditures made by Borrower for the Replacements during each calendar quarter within twenty (20) days following the end of such calendar quarter, Borrower shall deposit an amount equal to one-quarter of the Replacements Budget in the Replacement Escrow Fund shall constitute additional security for disbursement pursuant the Debt. Upon the occurrence of an Event of Default, Mortgagee may apply any sums then present in the Replacement Escrow Fund to Section 3.3the payment of the Debt in any order in its sole discretion. Upon payment of the Debt and performance by Mortgagor of all its obligations under this Mortgage and the other Loan Documents, any amounts remaining in the Replacement Escrow Fund shall be refunded to Mortgagor. The Replacement Escrow Fund shall not constitute a trust fund and may be commingled with other monies held by Mortgagee. The Replacement Escrow Fund shall be held in an account in Mortgagee's name (or such other account name style as Mortgagee may elect) at a financial institution selected by Mortgagee in its sole discretion. Mortgagor shall be entitled to, and shall report under its federal tax identification number, the amount earned, if any, on the Replacement Escrow Fund at a yield equal to that which would accrue on such funds by taking the average of the interest rate paid on each tier (if any) of such institution's basic business checking with interest account and the interest rates paid on each tier (if any) of such institution's business money market savings account, as such rates change from time to time, as quoted by the institution with which Mortgagee (or its servicer) deposits the Replacement Escrow Fund ("Mortgagor's Interest"), or if such institution does not have established basic business checking with interest and business money market savings accounts (or if rates for such accounts cannot otherwise be determined in connection with the deposit of such Replacement Escrow Fund), then at such average of comparable rates as quoted by Bank One, Texas, N.A., Mortgagor's Interest, less applicable administrative fees (if any), shall be and become part of such Replacement Escrow Fund and shall be disbursed as provided in this section. Mortgagee shall not be responsible for obtaining a specific return or yield on such deposit and, unless otherwise prohibited by applicable law, shall be entitled to retain any fees or other earnings in excess of Mortgagor's Interest paid in connection with the deposit or placement of any Replacement Escrow Fund. Mortgagee will cause to be furnished to Mortgagor on an annual basis such income tax reporting forms as are required by applicable law.