Reserve Accounts All unexpended funds in project reserve accounts shall remain with the Project to be used for the benefit of the property and/or its residents. The minimum replacement reserve deposit for projects shall be $ per unit per year. The on- going funding of the replacement reserve in this amount is a requirement of this Agreement during the Compliance Period, and the Owner shall maintain these reserves in a segregated account. Funds in the replacement reserve shall only be used for capital improvements or repairs. An operating reserve shall be funded in an amount equal to three months of estimated operating expenses and debt service under stabilized occupancy. Additional funding will be required only if withdrawals result in a reduction of the operating reserve account balance to 50% or less of the originally funded amount. An equal, verified operating reserve requirement of any other debt or equity source may be used as a substitute, and the reserve may be released following achievement of a minimum annual debt service ratio of 1.15 for three consecutive years following stabilized occupancy only to pay deferred developer fee. Upon Committee approval, operating reserve amounts in excess of industry norms may be considered “reasonable costs,” for purposes of this subsection, only for homeless assistance projects under the Non- Profit Set-Aside, as described in Section 10315(b), Special Needs projects, HOPE VI projects, or project based Section 8 projects. The original Sources and Uses budget and the final cost certification shall demonstrate the initial and subsequent funding of the operating reserves.
Debt Service Reserve Account Borrower shall fund and maintain a debt service reserve in the Debt Service Reserve Account, in an amount equal to twelve (12) monthly payments of principal and interest on the Term Loan as determined from time to time by the Lender (the “Debt Service Reserve Amount”). Beginning with the first fiscal year end after the Effective Date, and at each fiscal year end thereafter, until such time as the balance in the Debt Service Reserve Account is equal to or greater than the Debt Service Reserve Amount, one hundred percent (100%) of Excess Cash Flow shall be deposited in the Debt Service Reserve Account by Borrower within 120 days of each fiscal year end. The balance held in the Debt Service Reserve Account shall earn interest at the rate determined by the Lender from time to time. If at any time after the Debt Service Reserve Amount has been fully funded by the Borrower the balance in the Debt Service Reserve Account is less than sixty-seven percent (67.0%) of the applicable Debt Service Reserve Amount, the Borrower shall, within sixty (60) days after receipt of notice from the Lender as provided herein, deposit in the Debt Service Reserve Account an amount sufficient to restore the balance in the Debt Service Reserve Account to an amount not less than the Debt Service Reserve Amount; provided, however, Borrower shall not be required to make a deposit in the Debt Service Reserve Account to the extent that such a deposit would exceed one hundred percent (100%) of Excess Cash Flow, calculated based upon unaudited monthly financial statements required by Section 5.01(c)(ii) of this Agreement for the month ending immediately prior to receipt of notice from the Lender. In the event that Borrower is not required to fully restore the balance in the Debt Service Reserve Account pursuant to the foregoing sentence, Borrower shall at the earliest possible date thereafter, to the extent of Excess Cash Flow determined on unaudited monthly financial statements required by Section 5.01(c)(ii) of this Agreement or audited financial statements required by Section 5.01(c)(i) of this Agreement, as applicable, deposit in the Debt Service Reserve Account such additional amounts as will restore the balance in the Debt Service Reserve Account to an amount not less than the Debt Service Reserve Amount. As and when any of the Loan Obligations are past due, after any applicable grace periods have expired, under any Loan Document, Lender, in its sole discretion, may withdraw from the Debt Service Reserve Account the amount of the then past due Loan Obligations and apply such amounts to the payment of the past due Loan Obligations. Notwithstanding the foregoing sentence, if an Event of Default has occurred and is continuing under the Loan Documents, the Lender may, after any applicable grace periods have expired, withdraw amounts in the Debt Service Reserve Account, in its sole discretion, and apply such amounts to the payment of the Loan Obligations in such order and manner as Lender shall determine in its sole discretion. Withdrawals by the Lender of any amounts from the Debt Service Reserve Account to pay any Loan Obligations as provided in this Section 2.14 may be made without the requirement of any consent by or notice to the Borrower, provided that Lender shall provide to Borrower notice that such withdrawal was made within a reasonable time thereafter. Borrower recognizes and acknowledges that its obligation to pay the Loan Obligations are absolute and unconditional and it is not dependent upon sufficient deposits in the Debt Service Reserve Account being available to make payment on any Loan Obligations, and nothing herein shall be construed to negate or modify the Borrower’s absolute and unconditional obligation to pay the Loan Obligations in accordance with the terms and conditions of this Agreement and the Loan Documents. Borrower shall execute and deliver to the Lender any and all deposit account control agreements the Lender may reasonably request in accordance with the terms and conditions of the Loan Documents, and take all actions and deliver all documents the Lender may reasonably request or require to perfect the Lender’s security interest in the Debt Service Reserve Account, in accordance with the terms and conditions of the Loan Documents.
Collateral Accounts (a) The Trustee is authorized to receive any funds for the benefit of the Holders distributed under, and in accordance with, the Collateral Documents, and to make further distributions of such funds to the Holders according to the provisions of this Indenture, the Collateral Documents and the Intercreditor Agreement.
(b) Prior to the Issue Date, the Trustee shall have established the Collateral Accounts, which shall at all times hereafter until this Indenture shall have terminated, be maintained with, and under the sole control of, the Trustee. The Collateral Accounts shall be trust accounts and shall be established and maintained by the Trustee at one of its corporate trust offices (which may include the New York corporate trust office) and all Collateral shall be credited thereto. All cash and Cash Equivalents received by the Trustee from Asset Dispositions of Collateral, Recovery Events, Asset Swaps involving the transfer of Collateral, foreclosures of or sales of the Collateral, issuances of Additional Securities and other awards or proceeds pursuant to the Collateral Documents, including earnings, revenues, rents, issues, profits and income from the Collateral received pursuant to the Collateral Documents, shall be deposited in the First Priority Collateral Account, in the case of proceeds from First Priority Collateral, or in the Second Priority Collateral Account, in the case of proceeds from Second Priority Collateral, and thereafter shall be held, applied and/or disbursed by the Trustee in accordance with the terms of this Indenture (including, without limitation, Section 2.1(a), Section 3.5, Section 6.10 and Section 11.8(a). In connection with any and all deposits to be made into the Collateral Accounts under this Indenture, the Collateral Documents or the Intercreditor Agreement, the Trustee and/or the Collateral Agent, as applicable, shall receive an Officers’ Certificate identifying which Collateral Account shall receive such deposit and directing the Trustee and/or the Collateral Agent to make such deposit.
(c) Pending the distribution of funds in the Collateral Account in accordance with the provisions hereof and provided that no Event of Default shall have occurred and be continuing, the Company may direct the Trustee to invest such funds in Cash Equivalents specified in such direction, such investments to mature by the times such funds are needed hereunder and such direction to certify that such funds constitute Cash Equivalents and that no Event of Default shall have occurred and be continuing. So long as no Event of Default shall have occurred and be continuing, the Company may direct the Trustee to sell, liquidate or cause the redemption of any such investments, such direction to certify that no Event of Default shall have occurred and be continuing. Any gain or income on any investment of funds in the Collateral Account shall be credited to the Collateral Account. The Trustee shall have no liability for any loss incurred in connection with any investment or any sale, liquidation or redemption thereof made in accordance with the provisions of this Section 11.8(c).
Reserve Account (i) On the Closing Date, the Seller shall deposit the Specified Reserve Balance into the Reserve Account. Amounts held from time to time in the Reserve Account shall be held by the Trust Collateral Agent for the benefit of the Noteholders.
(ii) The Seller may, from time to time after the date hereof, request each Rating Agency to approve a formula for determining the Specified Reserve Balance that is different from the formula set forth herein, which may result in a decrease in the amount of the Specified Reserve Balance or change the manner by which the Reserve Account is funded. Notwithstanding any other provision of this Agreement, if each Rating Agency then rating the Notes notifies the Seller (who shall send such notification to the Trust Collateral Agent) in writing that the use of any such new formula, and any decrease in the amount of the Specified Reserve Balance or change in the manner by which the Reserve Account is funded, will not result in the qualification, reduction or withdrawal of its then current rating of the Notes then the Specified Reserve Balance will be determined in accordance with such new formula and this Agreement will be amended to reflect such new formula without the consent of any Noteholder.
(iii) On each Distribution Date, the Servicer shall instruct the Trust Collateral Agent (based on the information contained in the Servicer’s Certificate delivered on the related Determination Date) (A) if the amount on deposit in the Reserve Account (without taking into account any amount on deposit in the Reserve Account representing net investment earnings) is less than the Specified Reserve Balance, in which case the Trust Collateral Agent shall, after payment of any amounts required to be distributed pursuant to clauses (i) through (xviii) of Section 5.7(a) deposit in the Reserve Account the Reserve Account Deposit Amount pursuant to Section 5.7(a)(xix), and (B) if the amount on deposit in the Reserve Account, after giving effect to all other deposits thereto and withdrawals therefrom to be made on such Distribution Date is greater than the Specified Reserve Balance, in which case the Trust Collateral Agent shall distribute the amount of such excess as part of Available Funds on such Distribution Date.
(b) On each Distribution Date, the Servicer shall instruct the Trust Collateral Agent (based on the information contained in the Servicer’s Certificate delivered on the related Determination Date) to withdraw the Reserve Account Withdrawal Amount from the Reserve Account and deposit such amounts in the Collection Account to be included as Total Available Funds for that Distribution Date.
(c) Amounts properly transferred to the Certificate Distribution Account for payment to the Certificateholder pursuant to this Agreement shall not be available to the Trust Collateral Agent or the Trust for the purpose of making deposits to the Reserve Account, or making payments to the Noteholders, nor shall the Certificateholder be required to refund any amount properly received by them.
Project Accounts The Grantee agrees to establish and maintain for the Project either a separate set of accounts or accounts within the framework of an established accounting system, in a manner consistent with 49 C.F.R. § 18.20, or 49 C.F.R. § 19.21, as amended, whichever is applicable.