CORRECT, ACCURATE, AND COMPLETE AND FAIRLY PRESENT THE FINANCIAL CONDITION AND
RESULTS OF THE OPERATIONS OF BORROWER AND THE PROPERTIES ON A COMBINED BASIS AS
WELL AS EACH INDIVIDUAL PROPERTY (SUBJECT TO NORMAL YEAR-END ADJUSTMENTS) AS
APPLICABLE: (I) AN OCCUPANCY REPORT FOR THE SUBJECT MONTH, INCLUDING AN AVERAGE
DAILY RATE ACCOMPANIED BY AN OFFICER'S CERTIFICATE WITH RESPECT THERETO;
(II) QUARTERLY AND YEAR-TO-DATE OPERATING STATEMENTS (INCLUDING CAPITAL
EXPENDITURES) PREPARED FOR EACH CALENDAR QUARTER, NOTING NET OPERATING INCOME,
GROSS INCOME FROM OPERATIONS, AND OPERATING EXPENSES (NOT INCLUDING ANY
CONTRIBUTIONS TO THE REPLACEMENT RESERVE FUND, AND OTHER INFORMATION NECESSARY
AND SUFFICIENT TO FAIRLY REPRESENT THE FINANCIAL POSITION AND RESULTS OF
OPERATION OF THE PROPERTIES DURING SUCH CALENDAR MONTH, AND CONTAINING A
COMPARISON OF BUDGETED INCOME AND EXPENSES AND THE ACTUAL INCOME AND EXPENSES
TOGETHER WITH A DETAILED EXPLANATION OF ANY VARIANCES OF FIVE PERCENT (5%) OR
MORE BETWEEN BUDGETED AND ACTUAL AMOUNTS FOR SUCH PERIODS, ALL IN FORM
SATISFACTORY TO LENDER; (III) A CALCULATION REFLECTING THE ANNUAL DEBT SERVICE
COVERAGE RATIO FOR THE IMMEDIATELY PRECEDING TWELVE (12) MONTH PERIOD AS OF THE
LAST DAY OF SUCH MONTH ACCOMPANIED BY AN OFFICER'S CERTIFICATE WITH RESPECT
THERETO; (IV) A NET CASH FLOW SCHEDULE; AND (V) THE TOTAL AMOUNT OF RENT PAID BY
EACH INDIVIDUAL OPERATING LESSEE BORROWER UNDER ITS OPERATING LEASE.
IN
ADDITION, SUCH CERTIFICATE SHALL ALSO BE ACCOMPANIED BY A CERTIFICATE OF THE
CHIEF FINANCIAL OFFICER OF BORROWER, SOLE MEMBER OR GUARANTOR STATING THAT THE
REPRESENTATIONS AND WARRANTIES OF BORROWER SET FORTH IN SECTION 4.1.31(A) ARE
TRUE AND CORRECT AS OF THE DATE OF SUCH CERTIFICATE.
ON OR BEFORE THIRTY (30)
DAYS AFTER THE END OF EACH CALENDAR MONTH, BORROWER ALSO WILL FURNISH, OR CAUSE
TO BE FURNISHED, TO LENDER THE MOST CURRENT SMITH TRAVEL RESEARCH REPORTS IN THE
FORM OF SCHEDULE XIII HERETO THEN AVAILABLE TO BORROWER REFLECTING MARKET
PENETRATION AND RELEVANT HOTEL PROPERTIES COMPETING WITH EACH INDIVIDUAL
PROPERTY.
(D)
FOR THE PARTIAL YEAR PERIOD COMMENCING ON THE CLOSING DATE, AND
FOR EACH FISCAL YEAR THEREAFTER, BORROWER SHALL SUBMIT TO LENDER AN ANNUAL
BUDGET NOT LATER THAN THIRTY (30) DAYS PRIOR TO THE COMMENCEMENT OF SUCH PERIOD
OR FISCAL YEAR (OR IF MANAGER PREPARES SUCH ANNUAL BUDGET, SUCH LONGER TIME AS
SET FORTH IN THE MANAGEMENT AGREEMENT) IN FORM REASONABLY SATISFACTORY TO LENDER
(OR AS OTHERWISE SET FORTH IN THE MANAGEMENT AGREEMENT).
THE ANNUAL BUDGET
SHALL BE SUBJECT TO LENDER'S WRITTEN APPROVAL (EACH SUCH ANNUAL BUDGET, AN
"APPROVED ANNUAL BUDGET").
IN THE EVENT THAT LENDER OBJECTS TO A PROPOSED
ANNUAL BUDGET SUBMITTED BY BORROWER, LENDER SHALL ADVISE BORROWER OF SUCH
OBJECTIONS WITHIN FIFTEEN (15) DAYS AFTER RECEIPT THEREOF (AND DELIVER TO
BORROWER A REASONABLY DETAILED DESCRIPTION OF SUCH OBJECTIONS) AND BORROWER
SHALL PROMPTLY REVISE SUCH ANNUAL BUDGET AND RESUBMIT THE SAME TO LENDER.
LENDER SHALL ADVISE BORROWER OF ANY OBJECTIONS TO SUCH REVISED ANNUAL BUDGET
WITHIN TEN (10) DAYS AFTER RECEIPT THEREOF (AND DELIVER TO BORROWER A REASONABLY
DETAILED DESCRIPTION OF SUCH OBJECTIONS) AND BORROWER SHALL PROMPTLY REVISE THE
SAME IN ACCORDANCE WITH