Discretionary Funding Advance. (a) In the event there are insufficient funds in the Collection Account and also insufficient funds in the Working Capital Reserve Account to make Funding Draws with respect to specific Loans (and related Acquired Property), the Manager may, in its discretion, make an advance to the Company (the “Discretionary Funding Advance”), which Discretionary Funding Advance shall be reimbursable (and shall accrue interest as set forth herein) only to the extent used exclusively for the applicable Funding Draws for specified Loans (or related Acquired Property). In no event may Discretionary Funding Advances be used for payment of any Working Capital Expenses other than Funding Draws. The proceeds of Discretionary Funding Advances shall be deposited into the Collection Account for disbursement therefrom for the making of the applicable Funding Draws. All Discretionary Funding Advances, together with a detailed statement of the sources and uses thereof (which shall be broken out by the reimbursable and unreimbursable portions thereof) and description of the allocation to the Loans for which such Discretionary Funding Advance was made, shall be reflected in the Monthly Report with respect to the calendar month during which the relevant Discretionary Funding Advance was made.
(b) Discretionary Funding Advances shall bear interest on the outstanding principal amount thereof at a rate per annum equal to the LIBOR Rate in effect from time to time, plus 3.0%. Interest shall be calculated on the basis of a 360 day year and actual days elapsed. Interest shall accrue on each Discretionary Funding Advance for the day on which the Discretionary Funding Advance is made, and shall not accrue on a Discretionary Funding Advance, or any portion thereof, for the day on which the Discretionary Funding Advance or such portion is paid. Each Discretionary Funding Advance, including interest accrued with respect thereto, shall be repaid in accordance with Sections 3.1 and 5.1 of the Custodial and Paying Agency Agreement, it being agreed that, as to any specific amounts to be so applied to the repayment of one or more Discretionary Funding Advances relating to the same Loan, such amounts shall be applied first to outstanding interest on such Discretionary Funding Advances (on a pro rata basis as among such Discretionary Funding Advances, if applicable) and then to the principal amount (on a pro rata basis as among such Discretionary Funding Advances, if applicable). The Manager may not assi...
