WILL EXCEED
$200,000.00, LENDER MAY REQUIRE AN INSPECTION OF THE APPLICABLE PROPERTY AT
BORROWERS' EXPENSE PRIOR TO MAKING A DISBURSEMENT FROM THE INITIAL RENOVATION
RESERVE FUND IN ORDER TO VERIFY COMPLETION OF THE INITIAL RENOVATIONS FOR WHICH
REIMBURSEMENT IS SOUGHT.
LENDER MAY REQUIRE THAT SUCH INSPECTION BE CONDUCTED
BY AN APPROPRIATE INDEPENDENT QUALIFIED PROFESSIONAL SELECTED BY LENDER AND MAY
REQUIRE A CERTIFICATE OF COMPLETION BY AN INDEPENDENT QUALIFIED PROFESSIONAL
ARCHITECT ACCEPTABLE TO LENDER PRIOR TO THE DISBURSEMENT FROM THE INITIAL
RENOVATION RESERVE FUND.
BORROWERS SHALL PAY THE EXPENSE OF THE INSPECTION AS
REQUIRED HEREUNDER, WHETHER SUCH INSPECTION IS CONDUCTED BY LENDER OR BY AN
INDEPENDENT QUALIFIED PROFESSIONAL ARCHITECT.
(E)
IN ADDITION TO ANY INSURANCE REQUIRED UNDER
THE LOAN DOCUMENTS, BORROWERS SHALL PROVIDE OR CAUSE TO BE PROVIDED WORKER'S
COMPENSATION INSURANCE, BUILDER'S RISK, AND PUBLIC LIABILITY INSURANCE AND OTHER
INSURANCE TO THE EXTENT REQUIRED UNDER APPLICABLE LAW IN CONNECTION WITH ANY
INITIAL RENOVATIONS.
ALL SUCH POLICIES SHALL BE IN FORM AND AMOUNT REASONABLY
SATISFACTORY TO LENDER.
7.5.3
BALANCE IN THE INITIAL RENOVATION RESERVE ACCOUNT.
THE INSUFFICIENCY OF ANY BALANCE IN THE INITIAL RENOVATION RESERVE ACCOUNT SHALL
NOT RELIEVE BORROWERS FROM THEIR OBLIGATION TO FULFILL ALL PRESERVATION AND
MAINTENANCE COVENANTS IN THE LOAN DOCUMENTS.
Section 7.6
General Reserve Fund.
7.6.1
DEPOSITS TO GENERAL RESERVE ACCOUNT.
FROM TIME TO
TIME DURING THE TERM OF THE LOAN, PURSUANT TO SECTIONS 2.6.2(B)(XI)(B),
2.6.2(C)(XI)(B) AND/OR 2.4.3(G) HEREOF, CERTAIN AMOUNTS MAY BE DEPOSITED WITH
LENDER FOR THE PURPOSE OF ESTABLISHING A GENERAL RESERVE FUND FOR THE PURPOSES
DESCRIBED IN THIS SECTION 7.6.
ALL AMOUNTS SO DEPOSITED WITH LENDER SHALL
HEREINAFTER BE REFERRED TO AS THE "GENERAL RESERVE FUND" AND THE ACCOUNT IN
WHICH SUCH AMOUNT IS HELD SHALL HEREINAFTER BE REFERRED TO AS THE "GENERAL
RESERVE ACCOUNT."
7.6.2
WITHDRAWALS FROM GENERAL RESERVE ACCOUNT.
PROVIDED
THAT NO EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING, BORROWER SHALL
HAVE THE RIGHT FROM TIME TO TIME TO REQUEST A DISBURSEMENT OF FUNDS FROM THE
GENERAL RESERVE ACCOUNT FOR THE FOLLOWING PURPOSES: (A) FOR THE PAYMENT OF
OPERATING EXPENSES EITHER REFLECTED IN THE APPROVED ANNUAL BUDGET THEN IN EFFECT
OR OTHERWISE REASONABLY APPROVED BY LENDER, (B) FOR THE PAYMENT TO BORROWERS,
HRHI AND/OR HR HOLDINGS FOR THE PURPOSES OF PERMITTING SUCH PARTIES TO PAY
FEDERAL AND STATE INCOME TAX OBLIGATIONS WITH RESPECT TO INCOME ALLOCATED TO
THEM FROM THE PROPERTIES AND/OR THE IP (BUT ONLY FOR SO LONG AS ANY PARTICULAR
PROPERTY OR PORTION THEREOF OR ANY PARTICULAR PORTION OF THE IP REMAINS AS
SECURITY FOR THE LOAN); PROVIDED, HOWEVER, THAT IN NO EVENT SHALL THE AGGREGATE
AMOUNT OF THE GENERAL RESERVE FUND USED FOR THE PURPOSES OF THIS CLAUSE (B)
DURING THE ENTIRE TERM OF THE LOAN EXCEED THREE MILLION DOLLARS ($3,000,000.00),
(C) FOR THE PAYMENT OF COST OVER-RUNS IN CONNECTION WITH THE CONSTRUCTION OF THE
PROJECT, AS REASONABLY APPROVED BY LENDER TO THE EXTENT REQUIRED UNDER SECTION
3.15 HEREOF, AND/OR (D) AS PROVIDED IN SECTION 3.22(A)(IV) HEREOF; PROVIDED,
HOWEVER, THAT LENDER SHALL MAKE DISBURSEMENTS AS REQUESTED BY BORROWERS