MAKE ADDITIONAL DEPOSITS TO
THE PIP RESERVE FUND IN AN AMOUNT EQUAL TO THE DEFICIENCY (THE "ADDITIONAL PIP
RESERVE DEPOSITS"; TOGETHER WITH THE INITIAL PIP RESERVE DEPOSIT, THE "PIP
RESERVE DEPOSIT").
THE MINIMUM PIP RESERVE DEPOSIT, THE PIP RESERVE DEPOSIT AND
ALL OTHER AMOUNTS SO DEPOSITED WITH LENDER, IF ANY, SHALL BE HELD BY LENDER IN
AN INTEREST BEARING ACCOUNT.
AMOUNTS SO DEPOSITED, IF ANY, SHALL HEREINAFTER BE
REFERRED TO AS BORROWER'S "PIP RESERVE FUND" AND THE ACCOUNT, IF ANY, IN WHICH
SUCH AMOUNTS ARE HELD SHALL HEREINAFTER BE REFERRED TO AS BORROWER'S "PIP
RESERVE ACCOUNT". BORROWER SHALL COMPLETE OR CAUSE TO BE COMPLETED THE PIP
REQUIREMENTS ON OR BEFORE THE DEADLINE FOR EACH PIP REQUIREMENT AS SET FORTH ON
SCHEDULE XIV, AS SAME MAY BE EXTENDED BY THE APPLICABLE FRANCHISOR; PROVIDED,
HOWEVER, THE TIME FOR BORROWER TO COMPLETE ANY OF THE PIP REQUIREMENTS SHALL BE
EXTENDED UNTIL SUCH TIME AS FRANCHISOR DELIVERS A DEFAULT NOTICE TO BORROWER
UNDER THE
95
RELATED FRANCHISE AGREEMENT REGARDING BORROWER'S FAILURE TO SO COMPLETE SUCH PIP
REQUIREMENTS AND ANY CURE PERIOD RELATING TO SUCH NOTICE OF DEFAULT SHALL HAVE
EXPIRED.
IN ADDITION TO THE FOREGOING REQUIRED DEPOSITS, IF BORROWER HAS NOT PROVIDED TO
LENDER ON OR BEFORE DECEMBER 31, 2007 EVIDENCE THAT IT HAS COMPLETED AND PAID
FOR PIP REQUIREMENTS COSTING AT LEAST $1,269,105.40, THEN WITHIN ONE
(1) BUSINESS DAY, BORROWER SHALL MAKE AN ADDITIONAL PIP RESERVE DEPOSIT EQUAL TO
THE DIFFERENCE BETWEEN (A) $1,269,105.40 AND (B) THE COST OF PIP REQUIREMENTS
FOR WHICH BORROWER HAS DELIVERED TO LENDER EVIDENCE OF COMPLETION AND PAYMENT.
FAILURE TO MAKE SUCH ADDITIONAL PIP RESERVE DEPOSIT SHALL BE AN EVENT OF
DEFAULT.
7.4.2
DISBURSEMENTS FROM PIP RESERVE ACCOUNT.
LENDER SHALL DISBURSE TO
BORROWER (A) FUNDS FROM THE PIP RESERVE ACCOUNT OR (B) AMOUNTS DRAWN ON THE PIP
RESERVE LC (AS DEFINED BELOW) FROM TIME TO TIME UPON SATISFACTION BY BORROWER OF
EACH OF THE FOLLOWING CONDITIONS:
(I) BORROWER SHALL SUBMIT A WRITTEN REQUEST
FOR PAYMENT TO LENDER AT LEAST FIFTEEN (15) DAYS PRIOR TO THE DATE ON WHICH
BORROWER REQUESTS SUCH PAYMENT BE MADE AND SPECIFIES THE PIP REQUIREMENTS TO BE
PAID, (II) ON THE DATE SUCH REQUEST IS RECEIVED BY LENDER AND ON THE DATE SUCH
PAYMENT IS TO BE MADE, NO DEFAULT OR EVENT OF DEFAULT SHALL EXIST AND REMAIN
UNCURED, (III) LENDER SHALL HAVE RECEIVED A CERTIFICATE FROM BORROWER
(A) STATING THAT ALL PIP REQUIREMENTS AT THE APPLICABLE INDIVIDUAL PROPERTY TO
BE FUNDED BY THE REQUESTED DISBURSEMENT HAVE BEEN COMPLETED IN GOOD AND
WORKMANLIKE MANNER AND IN ACCORDANCE WITH ALL APPLICABLE FEDERAL, STATE AND
LOCAL LAWS, RULES AND REGULATIONS, SUCH CERTIFICATE TO BE ACCOMPANIED BY A COPY
OF ANY LICENSE, PERMIT OR OTHER APPROVAL BY ANY GOVERNMENTAL AUTHORITY REQUIRED
TO COMMENCE AND/OR COMPLETE THE PIP REQUIREMENTS, (B) IDENTIFYING EACH PERSON
THAT SUPPLIED MATERIALS OR LABOR IN CONNECTION WITH THE PIP REQUIREMENTS
PERFORMED AT SUCH INDIVIDUAL PROPERTY TO BE FUNDED BY THE REQUESTED DISBURSEMENT
UNDER A CONTRACT IN EXCESS OF $50,000, AND (C) STATING THAT