IN FULL ON ANY PAYMENT DATE PURSUANT TO SECTION
2.6.4(A)(II) AND THE AMOUNT OF CASH EXPENSES AND OTHER AMOUNTS TO BE PAID FOR
SUCH MONTH PURSUANT TO SECTION 2.6.4(A)(IV), LENDER WILL, UPON RECEIPT OF
WRITTEN REQUEST FROM BORROWER, DISBURSE TO LENDER FROM THE INTEREST RESERVE FUND
ON SUCH PAYMENT DATE THE AMOUNT NECESSARY TO PAY IN FULL ANY MONTHLY DEBT
SERVICE PAYMENT DUE AND PAYABLE ON SUCH PAYMENT DATE AND THE SAME SHALL BE
APPLIED PURSUANT TO THE TERMS OF THIS AGREEMENT; PROVIDED, HOWEVER, THAT (I)
BORROWER SHALL ONLY BE PERMITTED TO DIRECT LENDER TO DISBURSE SUCH FUNDS FROM
THE INTEREST RESERVE ACCOUNT TO THE EXTENT THAT THERE ARE INSUFFICIENT FUNDS TO
PAY THE SAME, IN THE EXCESS CASH RESERVE ACCOUNT, (II) UPON ANY APPLICATION OF
AMOUNTS IN THE INTEREST RESERVE ACCOUNT TO THE PAYMENT OF MONTHLY DEBT SERVICE,
ANY REMAINING FUNDS DEPOSITED INTO THE CASH MANAGEMENT ACCOUNT THEREAFTER UNTIL
THE NEXT PAYMENT DATE SHALL BE MADE AVAILABLE TO PAY CASH EXPENSES AND OTHER
AMOUNTS PURSUANT TO SECTION 2.6.4(A)(IV).
BORROWER AGREES AND ACKNOWLEDGES
THAT, SUBJECT TO THE PROVISIONS OF SECTION 2.6.5, NEITHER THE SUFFICIENCY OR THE
INSUFFICIENCY, NOR THE AVAILABILITY OR UNAVAILABILITY, OF THE INTEREST RESERVE
FUNDS SHALL CONSTITUTE A LIMITATION ON THE OBLIGATION OF BORROWER TO PAY THE
MONTHLY DEBT SERVICE UNDER THIS AGREEMENT.
FOLLOWING THE APPLICATION OF LENDER
OF ANY PORTION OF THE INTEREST RESERVE FUNDS TO PAY ANY MONTHLY DEBT SERVICE
PAYMENT, TO THE EXTENT THERE WERE SUFFICIENT FUNDS TO MAKE SUCH PAYMENT IN FULL,
BORROWER SHALL NOT BE DEEMED TO BE IN DEFAULT AS A RESULT OF ANY SUCH
NON-PAYMENT OF DEBT SERVICE.
IT IS ACKNOWLEDGED AND AGREED THAT BORROWER MAY
HAVE AN OBLIGATION TO REPLENISH OR MAKE FURTHER DEPOSITS TO THE INTEREST RESERVE
FUND IN CONNECTION WITH THE EXERCISE OF ANY EXTENSION OPTION AS PROVIDED IN
SECTION 2.7.
7.4.4.
RELEASE OF INTEREST RESERVE FUNDS. NOTWITHSTANDING BORROWER'S
OBLIGATION TO DEPOSIT THE INTEREST RESERVE FUND WITH LENDER PURSUANT TO SECTION
7.4.1, ANY AMOUNTS IN THE INTEREST RESERVE ACCOUNT (AND ANY LETTER OF CREDIT
HELD BY LENDER IN LIEU THEREOF) SHALL BE TRANSFERRED TO THE GENERAL RESERVE
ACCOUNT AND HELD AND APPLIED IN ACCORDANCE WITH THE TERMS OF SECTION 7.9 ON THE
DATE (THE "INTEREST RELEASE TRIGGER DATE") AT SUCH TIME THAT THE PROPERTY HAS
159
ACHIEVED A DEBT SERVICE COVERAGE RATIO (ASSUMING FOR THIS DETERMINATION THAT THE
FULL LOAN AMOUNT HAS BEEN ADVANCED HEREUNDER, AS THE SAME MAY BE REDUCED BY ANY
ACTUAL PERMITTED PREPAYMENT OR REDUCTION OF ANY UNADVANCED PORTION OF THE FUTURE
FUNDING PURSUANT TO SECTION 2.1.5(C) OR (D)) OF AT LEAST 1.2:1.0 FOR TWO
CONSECUTIVE CALENDAR QUARTERS.
SECTION 7.5.
RENOVATION PROJECT RESERVE ACCOUNT.
7.5.1.
DEPOSIT OF RENOVATION PROJECT RESERVE FUNDS.
ON THE CLOSING DATE,
A PORTION OF THE PROCEEDS OF THE BASE LOAN IN THE AMOUNT OF $117,045,200 (PLUS
AN ADDITIONAL $36,000 WITH RESPECT TO CERTAIN EXPECTED FEES OF CONSTRUCTION
CONSULTANT) WITH SHALL BE DEPOSITED WITH LENDER INTO AN ELIGIBLE ACCOUNT (WHICH
MAY BE A SUB-ACCOUNT OF THE CASH MANAGEMENT ACCOUNT) ESTABLISHED AND