Replacement Reserve Account Clause Samples

Replacement Reserve Account. Borrower shall establish and maintain an account that is available for capital expenditures for repairs and replacement necessary to maintain the Development in the condition required by the Loan Documents (the "Replacement Reserve Account"). Borrower shall make annual deposits to the Replacement Reserve Account in the amounts required in the Partnership Agreement and/or the documents evidencing the Bank Loan, whichever is greater. In no event shall the annual amount deposited in the Replacement Reserve Account exceed Five Hundred Dollars ($500) per unit, increasing by the applicable consumer price index every five (5) years, or such greater amount required in connection with the Partnership Agreement or any permanent financing, and approved by the County.

Replacement Reserve Account. Owner shall fund a Replacement Reserve Account with annual deposits in the first year following construction completion (which may be prorated based on the actual date of completion) equal to $250 per unit per year. In subsequent years, the deposit to the Replacement Reserve shall be increased by 3.5% annually. To the extent that other Project lenders require higher annual deposits to the Replacement Reserve Account, the 3.5% inflator will not be required so long as the total aggregate amount of annual deposits is equal to or greater than $250 per unit per year plus the 3.5% annual inflator compounded annually. Disbursements from this Replacement Reserve Account shall be for the purpose of effecting replacement of structural elements and mechanical equipment of the Project or for other similar purposes for the benefit of the Project. Prior to a Transfer Event, Owner shall submit to the City a Qualified Capital Needs Assessment. The entity which shall own the Project subsequent to the Transfer Event (the “Post Transfer Owner”) shall covenant to the City that the Post Transfer Owner (and any assignee thereof) shall: 1. Set aside at the closing of the Transfer Event adequate funds to perform the Short Term Work; 2. Perform the Short Term Work within three years from the date of the Transfer Event; 3. Make monthly deposits to reserves as are necessary to fund the Long Term Work, taking into account any balance in replacement reserve accounts upon the conclusion of the Transfer Event beyond those required by Section 1 of this clause; and 4. Complete the long term work when required, or prior thereto, pursuant to the Qualified Capital Needs Assessment. Proposed Term For purposes of this section, the following terms shall have the following meanings: 1. “Qualified Capital Needs Assessment” shall mean a capital needs assessment for the property dated within one hundred eighty (180) days of the proposed Transfer Event which is prepared by an independent third- party architect, engineer, or other qualified firm approved by the City and clearly sets forth (1) the capital needs of the Project for the next three (3) years (the “Short-Term Work”) and the projected costs thereof, and (2) the capital needs of the Project for the subsequent twelve (12) years (the “Long Term Work”) and the projected contributions to reserves that will be needed to accomplish that work. 2. “Transfer Event” shall mean (1) a transfer of the ownership of the Project, (2) the sale or assignment ...

Replacement Reserve Account. (a) On and after the first anniversary of the date of this Agreement, the Lender may, in the Lender's reasonable discretion, annually adjust the Monthly Reserve Deposit to the Replacement Reserve Account to an amount sufficient, in the Lender's reasonable judgment, to maintain adequate balances necessary for Additional Repairs, including, without limitation, Additional Repairs made pursuant to the terms of and consistent with the requirements of the applicable Franchise Agreement and Operating Lease. Between annual adjustments the Lender may from time to time, but not more than once a year, adjust the Monthly Reserve Deposit to the Replacement Reserve Account to an amount sufficient, in the Lender's reasonable judgment, to maintain adequate balances necessary for Additional Repairs, including, without limitation, Additional Repairs made pursuant to the terms of and consistent with the requirements of the applicable Franchise Agreement and Operating Lease. Notwithstanding the foregoing, in the event the Lender shall at any time increase the Monthly Reserve Deposit to the Replacement Reserve Account over the Monthly Reserve Deposit to the Replacement Reserve Account then required pursuant to Exhibit B hereto, the Borrower may, at its election, request that the Lender obtain, at the sole cost, fee and expense of the Borrower, an engineering report from an engineer to be selected by the Lender in its reasonable discretion, in which case the Monthly Reserve Deposit to the Replacement Reserve Account shall be adjusted by the Lender based on such engineering report, provided that in no event shall the Monthly Reserve Deposit to the Replacement Reserve Account be decreased below the applicable amount set forth on Exhibit B hereto. Following any defeasance of any permitted portion of the Premises, or substitution of properties pursuant to Section 2.6 hereof, and upon written request from Borrower, Lender will, at Borrower's expense, commission an updated engineering report (from an engineer selected by Lender) of the remaining portion of the Premises and, subject to Lender's review and approval, the amount of the Monthly Reserve Deposit to the Replacement Reserve Account shall be adjusted to reflect that the defeased portion of the Premises no longer serves as collateral for the Loan.

Replacement Reserve Account. Borrower shall establish and maintain an account that is available for capital expenditures for repairs and replacement necessary to maintain the Development in the condition required by the Loan Documents (the "Replacement Reserve Account"). Borrower shall make annual deposits to the Replacement Reserve Account and replenish the Replacement Reserve Account in the amounts required in the Partnership Agreement and/or the documents evidencing the Permanent Loan, whichever is greater. In no event shall the annual amount deposited in the Replacement Reserve Account exceed Six Hundred Dollars ($600) per unit, increasing by the applicable consumer price index every five

Replacement Reserve Account. Commencing no later than the date funds are disbursed pursuant to the Loan Documents, Borrower shall establish a segregated replacement reserve account. Borrower shall make annual deposits from Operating Income to the replacement reserve account in the amount set forth in Exhibit C, unless the Department determines, in its sole discretion, that more frequent deposits are required. Borrower shall also deposit any Development funds designated for replacement reserves into this account, including those identified in Exhibit C. The amount of the minimum annual deposit may be adjusted, as determined by the Department, in its sole discretion, based on the results of reserve studies, performed by an independent third party at the Borrower’s expense as requested by the Department or as based on other reliable indicators of the need for reserve funds over time.

Replacement Reserve Account. An Eligible Account established and maintained pursuant to the terms of this Loan Agreement.

Replacement Reserve Account. Owner shall fund a Replacement Reserve Account as required by ADFA. Owner shall use the Replacement Reserve Account only for eligible capital costs at the Project as defined from time to time by ADFA. Following completion of construction, Owner shall make monthly deposits to the Replacement Reserve Account at no less than an annualized rate of Two Hundred Fifty and 00/100 Dollars ($250.00) per unit per year. Thereafter, the minimum annual deposit shall be increased each year by 3%. Draws from this Replacement Reserve Account shall be for the purpose of effecting replacement of structural elements and mechanical equipment of the Project or for other similar purposes for the benefit of the Project. ADFA shall have the right to conduct physical inspections of the Project at any time during the Term of this Agreement. Based on ADFA’s physical inspections, ADFA may periodically require Owner to obtain a capital needs assessment prepared by an independent third-party architect, engineer, or other qualified firm approved by ADFA. Alternatively, ADFA may conduct a capital needs assessment using its own staff or contractors. Such capital needs assessments shall be used for the purposes of determining the adequacy of the Replacement Reserve Account, taking into account its existing balance, planned deposits, and anticipated future capital replacement costs for the Project. ADFA, at its discretion, may authorize paying the cost of a capital needs assessment from the Replacement Reserve Account if operating funds are not otherwise available. If the capital needs assessment indicates the Replacement Reserve Account is not sufficient to address anticipated capital costs during the term of this Agreement, Owner shall, at ADFA’s option, either make an additional deposit or increase its annual deposits sufficient to meet any underfunding.

Replacement Reserve Account. Borrower shall establish and maintain an account that is available for capital expenditures for repairs and replacement necessary to maintain the Property in the condition required by the Loan Documents (the "Replacement Reserve Account"). Borrower shall make annual deposits to the Replacement Reserve Account in the amount of Six Hundred Dollars ($600). In no event shall the annual amount deposited in the Replacement Reserve Account exceed Five Thousand Dollars ($5,000) per unit, increasing by the applicable consumer price index every five (5) years, or such greater amount approved by the County.

Replacement Reserve Account. Lender may reassess its estimate of the amount necessary for the Replacement Reserve Fund from time to time, but not more frequently than 2 times in any calendar year, 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 reasonable discretion that an increase is necessary to maintain the proper maintenance and operation of the Property.