Common use of Debt Service Reserve Clause in Contracts

Debt Service Reserve. On the Closing Date, Prior Owner deposited with Lender the amount of $1,000,000.00, which amount so deposited with Lender, together with any additional deposits with Lender pursuant to Section 2.5.2(b)(vi)(A) hereof, shall be held by Lender in accordance with Section 7.5 hereof. As of the Assumption Date, the amount held in the Debt Service Reserve Fund is $88.55. Amounts so deposited shall hereinafter be referred to as Borrower’s “Debt Service Reserve Fund” and the account in which such amounts are held shall hereinafter be referred to as Borrower’s “Debt Service Reserve Account”. Provided no Event of Default exists and is continuing, in the event on any Payment Date the funds available in the Cash Management Account for application on such Payment Date pursuant to Section 2.5.2(b)(ii) are not sufficient to fund the Monthly Debt Service Amount on such Payment Date in full (the amount of insufficiency being herein referred to as the “Payment Date Deficiency” for such Payment Date), then to the extent of funds available in the Debt Service Reserve Account, Lender shall authorize the transfer on such Payment Date from the Debt Service Reserve Account to the Cash Management Account, for application on such Payment Date pursuant to Section 2.5.2(b)(ii) to satisfy the Payment Date Deficiency. To the extent sufficient amounts are available in the Debt Service Reserve Account in accordance with this Section 7.4.3 and Lender is required hereunder to so authorize a transfer on such Payment Date of funds from the Debt Service Reserve Account to the Cash Management Account to satisfy the Payment Date Deficiency but Lender fails to so authorize the same, it shall not be a default or an Event of Default if such Payment Date Deficiency is not paid due to such failure by Lender and, accordingly, no late charges or default interest shall be payable by Borrower. When the Property shall have achieved the Debt Service Coverage Ratio Threshold, then provided no Event of Default exists and is continuing, the balance of the Debt Service Reserve Fund shall be disbursed to Borrower. The Debt Service Coverage Ratio shall be determined as of the end of each calendar quarter upon receipt by Lender from Borrower of such information and documentation concerning operating results at the Property as Lender may reasonably require to determine the same.

Debt Service Reserve. On A portion of the Closing Date, Prior Owner deposited with Lender proceeds of the Term Facility in the amount of Two Hundred Ten Thousand Six Hundred Eighty Two and 43/100 DOLLARS ($1,000,000.00, which amount so deposited with Lender, together with any additional deposits with 210,682.43) shall be advanced by Lender pursuant on the Closing Date into a reserve to Section 2.5.2(b)(vi)(A) hereof, pay interest and principal coming due under the Term Facility (the “Debt Service Reserve”). All amounts on deposit in the Debt Service Reserve shall be held by Lender in accordance with Section 7.5 hereofas additional collateral for the Credit Facilities. As of the Assumption DateBorrower shall have no right to require (or expect) Lender to disburse funds therefrom to pay debt service and, the amount held in the Debt Service Reserve Fund is $88.55. Amounts so deposited shall hereinafter be referred to as Borrower’s “Debt Service Reserve Fund” and the account in which such amounts are held shall hereinafter be referred to as Borrower’s “Debt Service Reserve Account”. Provided no Event of Default exists and is continuing, in the event on any Payment Date the funds available in the Cash Management Account for application on such Payment Date pursuant to Section 2.5.2(b)(ii) are not sufficient to fund the Monthly Debt Service Amount on such Payment Date in full (the amount of insufficiency being herein referred to as the “Payment Date Deficiency” for such Payment Date), then to the extent of funds available Lender elects, in the Debt Service Reserve Accountits sole discretion, Lender shall authorize the transfer on such Payment Date from the Debt Service Reserve Account to the Cash Management Account, for application on such Payment Date pursuant to Section 2.5.2(b)(ii) to satisfy the Payment Date Deficiency. To the extent sufficient amounts are available in the Debt Service Reserve Account in accordance with this Section 7.4.3 and Lender is required hereunder to so authorize a transfer on such Payment Date of disburse funds from the Debt Service Reserve Account to pay Borrower’s debt service under the Cash Management Account to satisfy Term Facility or any other portion of the Payment Date Deficiency but Lender fails to so authorize the sameObligations, it shall not be a default or an Event of Default if such Payment Date Deficiency is not paid due to such failure by Lender and, accordingly, no late charges or default interest Borrower shall be payable by Borrower. When the Property shall have achieved the Debt Service Coverage Ratio Threshold, then provided no Event of Default exists and is continuing, the balance of obligated to promptly re-deposit all such funds into the Debt Service Reserve Fund upon demand by Lender, Nothing in this Section shall be disbursed deemed to relieve Borrower of its obligation to timely pay all interest and principal as it comes due. All sums reserved by Lender in the Debt Service Reserve may be commingled with the genera! funds of Lender and no such sums shall be deemed to be held in trust for the benefit of Borrower. The Lender shall hold the funds in the Debt Service Coverage Ratio Reserve in an interest-bearing account. Borrower hereby grants Lender a first priority lien on and security interest in any interest Borrower may have in such funds, including all interest accruing thereon, and all such funds are pledged as additional collateral for the Loan and Borrower shall execute any other documents and take any other actions necessary to provide Lender with such a perfected security interest in such funds. Upon the Maturity Date or at any time following an Event of Default, the moneys then remaining on deposit with Lender or its agent shall, at Lender’s option, be determined as of applied against the end of each calendar quarter upon receipt by Lender from Borrower of such information and documentation concerning operating results at the Property as Lender may reasonably require to determine the sameObligations.

Debt Service Reserve. On Concurrently with the Closing Datemalcing of the Loan, Prior Owner deposited with Lender shall deposit into the Account the amount of $1,000,000.00the Debt Service Reserve, which amount so deposited with Lender, together with any additional deposits with Lender pursuant to Section 2.5.2(b)(vi)(A) hereof, Debt Service Reserve shall be held by Lender in accordance with Section 7.5 hereofas additional security for Borrower's obligations under the Loan Documents. As of Lender shall not be deemed a trustee as to the Assumption Date, the amount held in Debt Service Reserve. Lender shall be entitled to draw on the Debt Service Reserve Fund is $88.55. Amounts so deposited shall hereinafter be referred one or more times for the purpose of compensating Lender for any amounts due to as Borrower’s “Debt Service Reserve Fund” and Lender under this Agreement or the account in which such amounts are held shall hereinafter be referred to as Borrower’s “Debt Service Reserve Account”. Provided no Event other Loan Documents by reason of Default exists and is continuing, in the event on any Payment Date the funds available in the Cash Management Account for application on such Payment Date pursuant to Section 2.5.2(b)(ii) are not sufficient to fund the Monthly Debt Service Amount on such Payment Date in full (the amount of insufficiency being herein referred to as the “Payment Date Deficiency” for such Payment Date), then to the extent of funds available in the Debt Service Reserve Account, Lender shall authorize the transfer on such Payment Date from the Debt Service Reserve Account to the Cash Management Account, for application on such Payment Date pursuant to Section 2.5.2(b)(ii) to satisfy the Payment Date Deficiency. To the extent sufficient amounts are available in the Debt Service Reserve Account in accordance with this Section 7.4.3 and Lender is required hereunder to so authorize a transfer on such Payment Date of funds from the Debt Service Reserve Account to the Cash Management Account to satisfy the Payment Date Deficiency but Lender fails to so authorize the same, it shall not be a default or an Event of Default if such Payment Date Deficiency is not paid due to such failure occurring under any of the Loan Documents. Any amount drawn by Lender and, accordingly, no late charges shall not be deemed: (a) to fix or determine the amounts to which Lender is entitled to recover under this Agreement or otherwise; (b) to waive or cure any default interest shall be payable by Borrowerunder this Agreement or the other Loan Documents; or (c) to limit or waive Lender's right to pursue any remedies provided for hereunder or under the other Loan Documents. When the Property shall have achieved the Debt Service Coverage Ratio Threshold, then provided no Event of Default exists and is continuing, the balance If all or any portion of the Debt Service Reserve Fund is drawn against by Lender pursuant to the provisions of this Section 7.24, Borrower shall, within ten (10) business days after written demand by Lender, deposit into the Account immediately available funds equal to the amount so drawn by Lender, such that at all times during the term of this Agreement Lender shall be disbursed have the ability to draw upon the entire amount of the Debt Service Reserve. Borrower shall have the right to substitute a Letter of Credit for the Debt Service Reserve issued by a financial institution mutually acceptable to Lender and Borrower. In the event that Borrower substitutes a Letter of Credit, Borrower and Lender shall execute a Letter of Credit Agreement. Upon the satisfaction in full of all of Borrower's obligations under the Loan Documents, Lender shall return the Debt Service Reserve to Borrower. The Debt Service Coverage Ratio shall be determined as of the end of each calendar quarter upon receipt by Lender from Borrower of such information and documentation concerning operating results at the Property as Lender may reasonably require to determine the same.

Debt Service Reserve. On the Closing Date, Prior Owner Borrower shall establish and maintain a debt service reserve account (“Debt Service Reserve”). The account shall be deposited with Lender or in a safe and responsible depository designated by Lender. Such funds shall at all times remain under the control of Lender, whether in the form of a cash deposit or invested in obligations of, or fully guaranteed as to principal by, the United States of America or in such other investments as may be allowed by HUD. Such funds are to be drawn upon only with HUD’s consent, which consent may require replenishment to the minimum balance. The purpose of this reserve is to protect the insured loan in circumstances where Xxxxxxxx’s funds generated by the Project are insufficient to make the required debt service payments on the Note while other Project obligations remain current. Borrower shall deposit at endorsement of the Note an initial amount of $1,000,000.00_________. Thereafter, which amount so deposited with Lender, together with any additional deposits with Lender pursuant to Section 2.5.2(b)(vi)(A) hereof, the minimum allowable balance shall be held by Lender in accordance with Section 7.5 hereof. As of the Assumption Date$___________, the amount held in the Debt Service Reserve Fund is $88.55. Amounts so deposited shall hereinafter be referred to as Borrower’s “Debt Service Reserve Fund” and the account in which such amounts are held shall hereinafter be referred to as Borrower’s “Debt Service Reserve Account”. Provided no Event of Default exists and is continuing, in the event on if at any Payment Date the funds available in the Cash Management Account for application on such Payment Date pursuant to Section 2.5.2(b)(ii) are not sufficient to fund the Monthly Debt Service Amount on such Payment Date in full (the amount of insufficiency being herein referred to as the “Payment Date Deficiency” for such Payment Date), then to the extent of funds available in the Debt Service Reserve Account, Lender shall authorize the transfer on such Payment Date from the Debt Service Reserve Account to the Cash Management Account, for application on such Payment Date pursuant to Section 2.5.2(b)(ii) to satisfy the Payment Date Deficiency. To the extent sufficient amounts are available in the Debt Service Reserve Account in accordance with this Section 7.4.3 and Lender is required hereunder to so authorize a transfer on such Payment Date of funds from the Debt Service Reserve Account to the Cash Management Account to satisfy the Payment Date Deficiency but Lender fails to so authorize the same, it shall not be a default or an Event of Default if such Payment Date Deficiency is not paid due to such failure by Lender and, accordingly, no late charges or default interest shall be payable by Borrower. When the Property shall have achieved the Debt Service Coverage Ratio Threshold, then provided no Event of Default exists and is continuing, time the balance of the Debt Service Reserve Fund is less than the minimum allowable balance, Borrower shall make such deposits as necessary to cause the balance to be disbursed to Borrowerno less than such minimum allowable balance. The Borrower may make or take no Distribution at any time when the balance of that account is below the minimum allowable balance. Borrower shall carry the balance in this account on the financial records as a restricted asset. The Debt Service Coverage Ratio Reserve shall be invested in accordance with Program Obligations, and any interest earned on the investment shall be deposited in the Debt Service Reserve. Disbursements from such account shall only be made after consent, in writing, of HUD, which may be given or withheld in HUD’s sole discretion and upon such terms as approved by HUD. In the event of a notification of default under the terms of the Borrower’s Security Instrument pursuant to which the Indebtedness has been accelerated, a written notification by HUD to Borrower of a violation of this Agreement, or at such other times as determined solely by HUD, HUD may direct the application of the balance in such account to the amount due on the Indebtedness as accelerated or for such other purposes as may be determined solely by HUD. Where the Mortgaged Property is already subject to a security instrument insured or held by HUD as of the end date hereof and this Agreement is now being executed by Borrower as of each calendar quarter upon receipt the date hereof, the Debt Service Reserve now to be established shall be equal to the amount due to be in such account under this Agreement, and payments hereunder shall begin with the first payment due on the Borrower’s Note after acquisition, unless some other method of establishing and maintaining the account is approved in writing by HUD. Upon Xxxxxxxx’s full satisfaction of all Lender from and HUD obligations, Borrower of such information and documentation concerning operating results at shall receive any monies remaining in the Property as Lender may reasonably require to determine the sameDebt Service Reserve.