LENDER
REASONABLY DETERMINES THAT THE TAX AND INSURANCE ESCROW FUND IS NOT OR WILL NOT
BE SUFFICIENT TO PAY TAXES AND INSURANCE PREMIUMS BY THE DATES SET FORTH IN (A)
AND (B) ABOVE, LENDER SHALL NOTIFY BORROWER OF SUCH DETERMINATION AND BORROWER
SHALL INCREASE ITS MONTHLY PAYMENTS TO LENDER BY THE AMOUNT THAT LENDER
REASONABLY ESTIMATES IS SUFFICIENT TO MAKE UP THE DEFICIENCY AT LEAST THIRTY
(30) DAYS PRIOR TO THE DUE DATE OF THE TAXES AND/OR THIRTY (30) DAYS PRIOR TO
EXPIRATION OF THE POLICIES, AS THE CASE MAY BE.
SECTION 7.3.
FF&E RESERVE ACCOUNT.
7.3.1.
FF&E RESERVE FUND.
BORROWER SHALL PAY TO LENDER ON EACH PAYMENT
DATE AN AMOUNT EQUAL THREE PERCENT (3%) OF THE AMOUNT OF GROSS INCOME FROM
OPERATIONS FOR THE PROPERTY FROM THE SECOND PREVIOUS CALENDAR MONTH.
AMOUNTS SO
DEPOSITED SHALL HEREINAFTER BE REFERRED TO AS THE "FF&E RESERVE FUND" AND THE
ACCOUNT IN WHICH SUCH AMOUNTS ARE HELD SHALL HEREINAFTER BE REFERRED TO AS THE
"FF&E RESERVE ACCOUNT".
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7.3.2.
DISBURSEMENTS FROM FF&E RESERVE ACCOUNT. ALL DISBURSEMENTS FROM THE
FF&E RESERVE ACCOUNT SHALL BE MADE SOLELY FOR THE PURPOSE OF REIMBURSING
BORROWER FOR ITS COSTS AND EXPENSES INCURRED, OR FOR PAYING COSTS TO BE
INCURRED, IN CONNECTION WITH THE REPAIR, REPLACEMENT AND/OR UPGRADE OF FF&E AT
THE PROPERTY.
LENDER SHALL, WITHIN TEN (10) DAYS FOLLOWING REQUEST BY BORROWER,
MAKE DISBURSEMENTS FROM THE FF&E RESERVE FUND, NO MORE FREQUENTLY THAN ONCE IN
ANY THIRTY (30) DAY PERIOD OF NO LESS THAN $10,000 PER DISBURSEMENT (OR A LESSER
AMOUNT IF THE TOTAL AMOUNT IN THE FF&E RESERVE ACCOUNT IS LESS THAN $10,000, IN
WHICH CASE ONLY ONE DISBURSEMENT OF THE AMOUNT REMAINING IN THE ACCOUNT SHALL BE
MADE) UPON DELIVERY BY BORROWER OF LENDER'S STANDARD FORM OF DRAW REQUEST
ACCOMPANIED BY COPIES OF INVOICES FOR THE AMOUNTS REQUESTED AND, IF REQUIRED BY
LENDER FOR REQUESTS IN EXCESS OF $50,000 FOR A SINGLE ITEM, RECEIPTS AND
RELEASES FROM ALL PARTIES FURNISHING MATERIALS AND/OR SERVICES IN CONNECTION
WITH THE REQUESTED PAYMENT.
NOTWITHSTANDING THE FOREGOING, BORROWER SHALL APPLY
AN AMOUNT
EQUAL TO 75% OF EACH MONTHLY DEPOSIT INTO THE FF&E RESERVE ACCOUNT TO
RENOVATE 1,000 ROOMS (THE "ADDITIONAL ROOMS") IN ADDITION TO THE 608 ROOMS TO BE
RENOVATED AS PART OF THE RENOVATION PROJECT, PROVIDED THAT:
(A)
SUCH ADDITIONAL ROOMS SHALL BE RENOVATED TO A STANDARD
SUBSTANTIALLY EQUIVALENT TO THAT OF THE ROOM RENOVATIONS CONTEMPLATED BY THE
RENOVATION PROJECT;
(B)
BORROWER SHALL NOT BE REQUIRED TO UNDERTAKE THE RENOVATION OF MORE
THAN SIXTY ADDITIONAL ROOMS FOR EACH CALENDAR MONTH DURING THE TERM OF THE LOAN;
AND
(C)
IN THE EVENT THAT, IN ANY MONTH,
BORROWER APPLIES FUNDS ("OTHER
FUNDS") OTHER THAN FUNDS FROM THAT MONTH'S FF&E RESERVE FUND DEPOSIT TO PAY THE
COST OF RENOVATING ADDITIONAL ROOMS, THE AMOUNT OF SUCH MONTH'S FF&E RESERVE
FUND DEPOSIT REQUIRED TO BE APPLIED TO THE RENOVATION OF ADDITIONAL ROOMS SHALL
BE REDUCED BY THE AMOUNT OF OTHER FUNDS SO APPLIED.
7.3.3.
BALANCE IN THE FF&E RESERVE ACCOUNT.
THE INSUFFICIENCY OF ANY