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73495086v3 39 notice to the Controlling Person and the Funding Lender following any such Regulatory Agreement Default, may reduce the 60-day period provided above to such shorter period of time as is specified in such notice (but in no event less than fifteen (15) Business Days), but only if the Funding Lender, the Controlling Person and the Funding Lender shall have been provided with an opinion of Tax Counsel to the effect that such reduction of such period is necessary to preserve the exclusion from gross income for federal income tax purposes of interest on the Governmental Note. (c) In the event of a default in respect of Reserved Rights or a Regulatory Agreement Default which remains uncured after written notice thereof to the Borrower, the Controlling Person and the Funding Lender, nothing in this Section 7.9 shall restrict or in any way limit the right of the Governmental Lender to take any action for specific performance available under the Land Use Restriction Agreement or at law or in equity in order to enforce the terms of the Land Use Restriction Agreement or to enforce Reserved Rights hereunder, so long as the Governmental Lender does not take any action (i) to declare the outstanding balance of the Governmental Note or the Borrower Loan to be due on account of such default, (ii) to have a receiver appointed in respect of the Project Facilities, (iii) to foreclose any liens upon or security interests or to enforce any other similar remedy against any of the property described in the Mortgage, or (iv) to enforce any other similar remedy which would cause such liens or security interests to be discharged or materially impaired thereby. ARTICLE 8 DEPOSITS Section 8.1 Deposits to and Disbursements from the Replacement Reserve Account. Pursuant to the Replacement Reserve Agreement, the Borrower shall pay or cause to be paid to the Fiscal Agent, for deposit into the Replacement Reserve Account, the amounts described in the Replacement Reserve Agreement. The sums contained in the Replacement Reserve Account from time to time, shall be maintained, disbursed, and applied as provided in the Replacement Reserve Agreement. Section 8.2 Deposits to Tax and Insurance Escrow Account. Unless otherwise directed by the Controlling Person, two Business Days before each Loan Payment Date, commencing the First Loan Payment Date, and continuing each month thereafter, the Borrower shall pay, or cause to be paid, to the Fiscal Agent an amount equal to the Monthly Tax and Insurance Amount for the Project Facilities to be deposited in the Tax and Insurance Escrow Account. Section 8.3 [Intentionally Omitted.] Section 8.4 Establishment of Operating Reserve Account. The Borrower shall, upon receipt of the [Fourth] Installment under the Partnership Agreement of the Borrower, establish and maintain an operating reserve fund (the “Operating Reserve Account”) in the Operating Reserve Amount. Moneys in the Operating Reserve Account may be used by the Borrower only to fund any operating deficits of the Borrower, Expenses, or for any other operating or capital needs approved by the Controlling Person and Investor Limited Partner in writing. During the continuance of an Event of Default or in order to prevent an Event of Default, the Operating Reserve Account shall be applied to by the Borrower, at the direction of the Controlling Person: (i) first to pay current debt service on the Governmental Note; (ii) second to pay other operating deficits of the Project Facilities; and (iii) thereafter to payment of other amounts owed by the Borrower. Borrower additionally covenants and agrees that promptly following the date that the Investor Limited Partner, or an Affiliate of Investor Limited Partner, is no longer a partner under the