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.
35
(C)
NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS SECTION
3.10, 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.
(D)
ALL TRANSFERS OF FUNDS FROM THE DEPOSIT ACCOUNT OR OTHER SOURCES
TO OR FOR THE BENEFIT OF MEZZANINE LENDER OR MEZZANINE BORROWER PURSUANT TO THIS
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, ARE INTENDED BY BORROWER AND
MEZZANINE BORROWER TO CONSTITUTE AND SHALL CONSTITUTE DISTRIBUTIONS FROM
BORROWER TO MEZZANINE BORROWER OF SUCH FUNDS.
3.11
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.
3.12
TENANT IMPROVEMENT RESERVE SUBACCOUNT.
ON THE DATE HEREOF, BORROWER
SHALL DEPOSIT WITH LENDER $0.00 (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 THE TENANT IMPROVEMENTS AND/OR PAYING THE
TENANTS UNDER THE APPLICABLE LEASES ALLOWANCES FOR TENANT IMPROVEMENTS AND/OR
PAYING LEASING COMMISSIONS UNDER THE APPLICABLE LEASES, IN EACH CASE IN THE
AMOUNTS ALLOCATED TO, AND AS DESCRIBED FOR EACH APPLICABLE LEASE (THE "TI
LEASES").
PROVIDED THAT NO EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING,
LENDER SHALL DISBURSE TENANT IMPROVEMENT FUNDS HELD IN THE TENANT IMPROVEMENT
RESERVE SUBACCOUNT AND APPLICABLE TO EACH TI LEASE TO BORROWER, WITHIN FIFTEEN
(15) DAYS AFTER THE DELIVERY BY BORROWER TO LENDER OF A REQUEST THEREFORE (BUT
NOT MORE OFTEN THAN ONCE PER MONTH), IN INCREMENTS OF AT LEAST $25,000 (OR THE
REMAINING BALANCE OF THE AMOUNT ALLOCATED TO THE APPLICABLE TI LEASE, IF LESS),
PROVIDED: (I) BORROWER SHALL HAVE PROVIDED LENDER WITH EITHER (1) AS TO LEASING
COMMISSIONS RELATING TO THE APPLICABLE TI LEASE, REASONABLE EVIDENCE THAT SUCH
COMMISSIONS HAVE BEEN PAID, OR ARE THEN DUE AND WILL BE PAID WITH PROCEEDS OF
THE REQUESTED DISBURSEMENT, OR (2) AS TO LEASEHOLD IMPROVEMENT WORK OR
ALLOWANCES THEREFOR, REASONABLE EVIDENCE (WHICH MAY, IF REQUIRED BY LENDER,
INCLUDE A TENANT ESTOPPEL CERTIFICATE FROM THE TENANT UNDER THE APPLICABLE TI
LEASE) INDICATING, AS APPLICABLE, (A) THAT THE TENANT IMPROVEMENTS OR ALLOWANCES
THEREFOR HAVE BEEN COMPLETED IN ACCORDANCE WITH THE APPLICABLE TI LEASE, (B)
THAT THE TENANT UNDER THE APPLICABLE TI LEASE IS THEN OWED AND ENTITLED TO
PAYMENT UPON THE APPLICABLE TENANT ALLOWANCE PURSUANT TO THE TERMS OF SUCH TI
LEASE, OR (C) IF