THE IMMEDIATELY PRECEDING INTEREST
PERIOD SHALL BE APPLIED ON EACH PAYMENT DATE AS FOLLOWS IN THE FOLLOWING ORDER
OF PRIORITY: (I) FIRST, TO MAKE PAYMENTS INTO THE TAX AND INSURANCE SUBACCOUNT
AS REQUIRED UNDER SECTION 3.3; (II) SECOND, TO MAKE PAYMENTS INTO THE GROUND
RENT SUBACCOUNT AS REQUIRED UNDER SECTION 3.4; (III) THIRD, TO PAY THE MONTHLY
PORTION OF THE FEES CHARGED BY THE DEPOSIT BANK IN ACCORDANCE WITH THE DEPOSIT
ACCOUNT AGREEMENT; (IV) FOURTH, TO LENDER TO PAY THE MONTHLY DEBT SERVICE
PAYMENT AMOUNT DUE ON SUCH PAYMENT DATE (PLUS, IF APPLICABLE, INTEREST AT THE
DEFAULT RATE AND ALL OTHER AMOUNTS, OTHER THAN THOSE DESCRIBED UNDER OTHER
CLAUSES OF THIS SECTION 3.11(A), THEN DUE TO LENDER UNDER THE LOAN DOCUMENTS);
(V) INTENTIONALLY OMITTED; (VI) FIFTH, DURING THE CONTINUANCE OF A CASH TRAP
PERIOD, TO MAKE PAYMENTS FOR APPROVED OPERATING EXPENSES AS REQUIRED UNDER
SECTION 3.6; (VII) SIXTH, DURING THE CONTINUANCE OF A CASH TRAP PERIOD, TO MAKE
PAYMENTS IN AN AMOUNT EQUAL TO ALL REMAINING AVAILABLE CASH ON SUCH PAYMENT DATE
INTO THE CASH COLLATERAL SUBACCOUNT IN ACCORDANCE WITH SECTION 3.9; AND (VIII)
LASTLY, EXCEPT DURING THE CONTINUANCE OF A CASH TRAP PERIOD, PAYMENTS TO
BORROWER OF ANY REMAINING AMOUNTS.
NOTWITHSTANDING THE FOREGOING, EXCEPT DURING
THE CONTINUANCE OF A CASH TRAP PERIOD, PROVIDED THAT IN ANY GIVEN INTEREST
PERIOD, ALL AMOUNTS REFERRED TO IN THE FOREGOING CLAUSES (I) - (V) HAVE BEEN
PAID (IF AND AS APPLICABLE), THEN AT BORROWER'S REQUEST, THE PAYMENTS TO
BORROWER UNDER THE FOREGOING CLAUSE (VIII) SHALL BE MADE ON A WEEKLY BASIS.
(B)
THE FAILURE OF BORROWER TO MAKE ALL OF THE
PAYMENTS REQUIRED UNDER CLAUSES (I) THROUGH (VII) OF SECTION 3.11(A) IN FULL ON
EACH PAYMENT DATE SHALL CONSTITUTE AN EVENT OF DEFAULT UNDER THIS AGREEMENT;
PROVIDED, HOWEVER, IF ADEQUATE FUNDS ARE AVAILABLE IN THE DEPOSIT ACCOUNT FOR
SUCH PAYMENTS, THE FAILURE BY THE DEPOSIT BANK TO ALLOCATE SUCH FUNDS INTO THE
APPROPRIATE SUBACCOUNTS SHALL NOT CONSTITUTE AN EVENT OF DEFAULT.
(C)
NOTWITHSTANDING ANYTHING TO THE CONTRARY
CONTAINED IN THIS SECTION 3.11, AFTER THE OCCURRENCE OF AN EVENT OF DEFAULT,
LENDER MAY APPLY ALL RENTS DEPOSITED INTO THE DEPOSIT ACCOUNT AND OTHER PROCEEDS
OF REPAYMENT IN SUCH ORDER AND IN SUCH MANNER AS LENDER SHALL ELECT, PROVIDED
THAT LENDER MAY NOT APPLY RENTS TO THE PREPAYMENT OF PRINCIPAL UNLESS THE LOAN
HAS BEEN ACCELERATED.
3.12
INITIAL DEPOSITS INTO RESERVES.
THE INITIAL
DEPOSITS REQUIRED TO BE MADE ON THE DATE HEREOF INTO THE RESERVE ACCOUNTS
ESTABLISHED UNDER THIS ARTICLE 3 ARE FUNDED FROM THE PROCEEDS OF THE LOAN
DISBURSED AT CLOSING.
3.13
INITIAL LEASING RESERVE.
ON THE DATE HEREOF,
BORROWER SHALL DEPOSIT WITH LENDER $4,398,707.84 (THE "TENANT IMPROVEMENT
FUNDS") AND LENDER SHALL TRANSFER SUCH AMOUNT INTO A SUBACCOUNT (THE "TENANT
IMPROVEMENT RESERVE SUBACCOUNT").
THE TENANT IMPROVEMENT FUNDS SHALL BE USED TO
REIMBURSE BORROWER AND/OR TO PAY, IN THE ALLOCATED AMOUNTS AND IN ACCORDANCE
WITH THE TERMS AND CONDITIONS SET FORTH IN THIS AGREEMENT, FOR THE REASONABLE
COSTS AND EXPENSES INCURRED BY BORROWER IN COMPLETING