Common use of PIP Reserve Funds Clause in Contracts

PIP Reserve Funds. (a) Borrower shall deposit into an Eligible Account held by Lender or Lender’s agent (the “PIP Reserve Account”) (i) on the Closing Date, $0 for the applicable Individual Properties specified on Schedule 9.9 for the remaining 2018 budgeted costs of the Scheduled PIPs and (ii) unless Guarantor has provided a PIP Guaranty, on (y) the date that any PIP other than the Scheduled PIP, including, without limitation, any PIP relating to a Replacement Management Agreement and/or Replacement Franchise Agreement (the “New PIP”) is imposed by a Franchisor or Manager, the PIP Required Deposit for such New PIP and (z) on the first Business Day of each calendar year thereafter, an amount equal to the PIP Required Deposit (any such deposits to the PIP Reserve Account described in clauses (i) and (ii) above shall hereinafter be referred to, collectively, as the “PIP Reserve Deposits”. Amounts held in the PIP Reserve Account are herein referred to as the “PIP Reserve Funds”. In lieu of making any of the PIP Reserve Deposits in cash, Borrower shall be entitled to, at its option, deposit with Lender a Letter of Credit in the amount of such applicable PIP Reserve Deposit. The aggregate amount of PIP Reserve Funds and the notional amount of any such Letter of Credit delivered for any PIP Reserve Deposits shall not exceed the remaining cost of any PIP as reasonably determined by Lender, and any such excess shall be promptly released to Borrower or, in the case of a Letter of Credit, the amount thereof shall be reduced. (b) Provided no Event of Default shall have occurred and be continuing, within thirty (30) days of Borrower’s complying with the requirements contained in Section 9.7, Lender shall make disbursements from the PIP Reserve Account directly to Borrower as requested by Borrower for Borrower’s actual out of pocket expenses incurred in connection with performance of the PIP (including, without limitation, any project management fees, construction management fees and other similar fees (whether owed to Manager or otherwise)), no more frequently than once in any thirty (30) day period and in an amount of no less than $5,000.00, upon delivery by Borrower of (1) Lender’s standard form of draw request accompanied by copies of invoices for the amounts requested, including, without limitation, invoices for all items or materials purchased and all labor or services provided showing (A) the quantity and price of each item purchased, if such PIP includes the purchase or replacement of specific item, (B) the price of all materials (grouped by type or category) used in other than the purchase or replacement of specific items, (C) the cost of all contracted labor or other services or expenses attributable to such PIP, and (D) the PIP Completion Evidence, (2) if required by Lender, for requests in excess of $250,000.00 for a single item, lien waivers and releases from all parties furnishing materials and/or services in connection with the requested payment (conditioned upon the receipt of payment of the requested fund) and (3) such other evidence as may be reasonably required by Lender of performance and payment of the applicable PIP. Lender may additionally require an inspection of the Property at Borrower’s expense prior to making a disbursement from the PIP Reserve Account, in order to verify completion of replacements and repairs of items in excess of $250,000.00 for which reimbursement is sought. (c) The insufficiency of any balance in the PIP Reserve Account shall not relieve Borrower from its obligation to fulfill all preservation and maintenance covenants in the Loan Documents. (d) Any PIP Reserve Funds attributable to an Individual Property that has been released from the Lien of the Mortgages in accordance with the terms hereof shall be disbursed to Borrower within thirty (30) days of such release.

PIP Reserve Funds. (a) Borrower shall deposit into an Eligible Account held by Lender or Lender’s agent Servicer (the “PIP Reserve Account”) (i) on the Closing Date, the sum of . $0 for the applicable Individual Properties specified 2,206,099.00 on Schedule 9.9 for the remaining 2018 budgeted costs account of the Scheduled PIPs PIP, and (ii) unless Guarantor has provided a PIP Guaranty, on (y) the date that any New PIP other than the Scheduled PIP, including, without limitation, any PIP relating to a Replacement Management Agreement and/or Replacement Franchise Agreement (the “New PIP”) is imposed by a the Franchisor or Manager, pursuant to the PIP Required Deposit for such New PIP and (z) on the first Business Day of each calendar year thereafterFranchise Agreement, an amount equal to one hundred twenty-five percent (125%) of the PIP Required Deposit (any sum required to pay for such deposits to the PIP Reserve Account described in clauses (i) and (ii) above shall hereinafter be referred to, collectively, as the “PIP Reserve Deposits”New PIP. Amounts held in the PIP Reserve Account are herein referred to as the “PIP Reserve Funds”. In lieu of making any of the PIP Reserve Deposits in cash, Borrower shall be entitled to, at its option, deposit with Lender a Letter of Credit in the amount of such applicable PIP Reserve Deposit. The aggregate amount of PIP Reserve Funds and the notional amount of any such Letter of Credit delivered for any PIP Reserve Deposits shall not exceed the remaining cost of any PIP as reasonably determined by Lender, and any such excess shall be promptly released to Borrower or, in the case of a Letter of Credit, the amount thereof shall be reduced. (b) Provided no Event of Default shall have occurred and be continuing, within thirty (30) days of Borrower’s complying with the requirements contained in Section 9.7, Lender shall make disbursements from the PIP Reserve Account directly to Borrower Funds as requested by Borrower to reimburse Borrower for Borrower’s actual out of actual, out-of-pocket expenses incurred in connection with the performance of any work related to the PIP (including, without limitation, any project management fees, construction management fees and other similar fees the “PIP Work”) provided that all of the following conditions are satisfied in connection therewith: (whether owed to Manager or otherwise)), no more frequently than once in any thirty i) such request is made (30A) day period and in an amount of no less than $5,000.00, upon delivery by Borrower of (1) Lender’s standard on a form of draw request accompanied specified or approved by copies Lender and which shall at a minimum set forth (1) a general description of invoices the PIP Work for which such disbursement is requested and (2) the amounts requestedaccuracy of the invoices, includingto be attached thereto, without limitation, invoices for all items or materials purchased and all labor or services provided showing (A) which shall provide the quantity and price of each item purchased, if such the PIP Work includes the purchase or replacement of specific item, items (Bsuch as appliances) and the price of all materials (grouped by type or category) used in any item of PIP Work other than the purchase or replacement of specific items, (C) items and the cost of all contracted labor or other services applicable to each item of PIP Work for which such request for disbursement is made and (B) at least ten (10) days prior to the date on which Borrower requests such disbursement be made; (ii) on the date such request is received by Lender and on the date such disbursement is to be made, (A) no Event of Default shall exist and remain uncured and (B) the Franchise Agreement (1) is in full force and effect, with no defaults having occurred thereunder which are continuing beyond any applicable notice and/or cure periods, or expenses attributable (2) has been replaced with a Replacement Franchise Agreement in accordance with the terms and conditions of this Agreement; (iii) at Lender’s option, if the cost of any individual PIP Work exceeds $25,000, Lender shall have verified (by an inspection conducted at Borrower’s expense) performance of the associated PIP Work; (iv) the request for disbursement is accompanied by (A) an Officer’s Certificate certifying that (1) such funds will be used to reimburse Borrower for, or to pay for, PIP Work and a general description thereof, (2) the same has not been the subject of a previous disbursement, (3) all previous disbursements have been used to pay or reimburse for the previously identified PIP Work and (4) any construction work associated with such PIPPIP Work has been completed in a good and workmanlike manner and in accordance with the Franchise Agreement and all applicable Legal Requirements, (B) if requested by Lender, such additional reasonably detailed documentation satisfactory to Lender as to the amount, necessity and purpose therefor, (C) to the extent such disbursement is a reimbursement, copies of paid invoices for the amounts requested and, to the extent such disbursement is for payment, copies of the applicable unpaid invoices for the amounts requested and (D) the PIP Completion Evidence, (2) if required by Lender, for requests in excess of $250,000.00 for a single item, lien waivers and releases from all parties furnishing materials and/or services in connection with therewith; (v) funds remaining in the requested payment PIP Reserve Account are, in Lender’s judgment, sufficient to complete such PIP Work and all other outstanding PIP Work when required; (conditioned upon vi) at Lender’s option, Lender shall have received a title search for the receipt of payment of Property indicating that the requested fund) Property is free from all liens, claims and other encumbrances other than Permitted Encumbrances; and (3vii) Lender shall have received such other evidence as may Lender shall request that the PIP Work to be reasonably funded by the requested disbursement has been (A) completed and (B) paid for (or will be paid for upon such disbursement). Lender shall not be required by Lender to disburse PIP Reserve Funds more frequently than once each calendar month nor in an amount less than the Minimum Disbursement Amount (unless the total amount of performance and payment PIP Reserve Funds is less than the Minimum Disbursement Amount, in which case only one disbursement of the applicable PIP. Lender may additionally require an inspection of amount remaining in the Property at Borrower’s expense prior to making a disbursement from the PIP Reserve Account, in order to verify completion of replacements and repairs of items in excess of $250,000.00 for which reimbursement is soughtaccount shall be made). (c) Nothing in this Section 7.7 shall (i) make Lender responsible for making or completing any PIP Work; (ii) require Lender to expend funds in addition to the PIP Reserve Funds to complete any PIP Work; (iii) obligate Lender to proceed with the PIP Work; or (iv) obligate Lender to demand from Borrower additional sums to complete any PIP Work. (d) The insufficiency of any balance in the PIP Reserve Account shall not relieve Borrower from its obligation to fulfill all preservation and maintenance covenants in the Loan DocumentsDocuments and to complete any PIP that may be required under the Franchise Agreement or otherwise by Franchisor. (de) Any Upon the written request of Borrower following (i) completion of all outstanding PIP Reserve Funds attributable to an Individual Property that has been released from the Lien of the Mortgages in accordance with the terms and conditions hereof and (ii) Lender’s receipt of the PIP Completion Evidence, any remaining PIP Reserve Funds on deposit in the PIP Reserve Account shall be disbursed to Borrower within thirty (30) days deposited into the FF&E Reserve Account and held in accordance with the terms and conditions of such releaseSection 7.3 hereof.

PIP Reserve Funds. (a) Borrower shall deposit into an Eligible Account held by Lender or Lender’s agent (the “PIP Reserve Account”) (i) on the Closing Date, $0 7,437,050.00 for the applicable Individual Properties specified on Schedule 9.9 amounts due under the Franchise Agreement extension for the remaining 2018 budgeted costs of the Scheduled PIPs and Individual Property known as “Residence Inn Hartford Manchester”, (ii) unless Guarantor has provided a PIP Guarantytwelve (12) months prior to the expiration of any Franchise Agreement, on (x) to the extent such amounts have been determined, all amounts due by Borrower or Operating Lessee under such Franchise Agreement extension, and (y) to the extent such amounts have not been determined in such twelve (12) month period, Fifteen Thousand and 00/100 Dollars ($15,000.00) per key per applicable Individual Property until such amounts have been determined and deposited into the PIP Reserve Account (and, for the avoidance of doubt, if the foregoing deposits are insufficient to cover the PIP once such amounts are determined, Borrower or Operating Lessee shall immediately deposit the difference into the PIP Reserve Account), and (iii) (x) to the extent not duplicative of the amounts in clause (ii) hereof, on the date that any PIP other than the Scheduled PIP, including, without limitation, any PIP relating to a Replacement Management Agreement and/or Replacement Franchise Agreement (the “New PIP”) is imposed by a Franchisor or Manager, the PIP Required Deposit for such New PIP and (zy) on the first Business Day of each calendar year thereafter, an amount equal to the PIP Required Deposit (any such deposits to the PIP Reserve Account described in clauses (i), (ii) and (iiiii) above shall hereinafter be referred to, collectively, as the “PIP Reserve Deposits”. Amounts held in the PIP Reserve Account are herein referred to as the “PIP Reserve Funds”. In lieu of making any of the PIP Reserve Deposits in cash, Borrower shall be entitled to, at its option, deposit with Lender a Letter of Credit in the amount of such applicable PIP Reserve Deposit. The aggregate amount of PIP Reserve Funds and the notional amount of any such Letter of Credit delivered for any PIP Reserve Deposits shall not exceed the remaining cost of any PIP as reasonably determined by Lender, and any such excess shall be promptly released to Borrower or, in the case of a Letter of Credit, the amount thereof shall be reduced. If at any time Lender reasonably determines that the PIP Reserve Funds are not or will not be sufficient to pay for all budgeted expenditures for the then current calendar year for each PIP, Lender shall notify Borrower of any such determination and Borrower shall pay to Lender any amount required by Lender to make up the deficiency within ten (10) days after notice from Lender to Borrower requesting payment thereof. (b) Provided no Event of Default shall have occurred and be continuing, within thirty ten (3010) days of Borrower’s complying with the requirements contained in Section 9.7, Lender shall make disbursements from the PIP Reserve Account directly to Borrower (or, if Guarantor pays for any such PIP, including during a Cash Sweep Period, to Guarantor) as requested by Borrower for Borrower’s or Guarantor’s, as applicable, actual out of pocket expenses incurred in connection with performance of the PIP (including, without limitation, any project management fees, construction management fees, design and architectural fees, procurement fees and other similar fees (whether owed to Manager or otherwise)), no more frequently than once in any thirty (30) day period and in an amount of no less than $5,000.00, upon delivery by Borrower and/or Guarantor, as applicable, of (1) Lender’s standard form of draw request accompanied by copies of invoices for the amounts requested, including, without limitation, invoices for all items or materials purchased and all labor or services provided showing (A) the quantity and price of each item purchased, if such PIP includes the purchase or replacement of specific item, (B) the price of all materials (grouped by type or category) used in other than the purchase or replacement of specific items, (C) the cost of all contracted labor or other services or expenses attributable to such PIP, and (D) the PIP Completion Evidence, (2) if required by Lender, for requests in excess of $250,000.00 for a single item, lien waivers and releases from all parties furnishing materials and/or services in connection with the requested payment (conditioned upon the receipt of payment of the requested fund) and (3) such other evidence as may be reasonably required by Lender of performance and payment of the applicable PIP. Lender may additionally require an inspection of the any Individual Property at Borrower’s expense prior to making a disbursement from the PIP Reserve Account, in order to verify completion of replacements and repairs of items in excess of $250,000.00 for which reimbursement is sought. (c) The insufficiency of any balance in the PIP Reserve Account shall not relieve Borrower from its obligation to fulfill all preservation and maintenance covenants in the Loan Documents. (d) Any PIP Reserve Funds attributable to an Individual Property that has been released from Upon the Lien timely completion of the Mortgages all PIPs, if any, in accordance with the terms hereof requirements of this Agreement, as verified by Lender in its reasonable discretion, and provided no Event of Default has then occurred and is continuing, any remaining balance in the PIP Reserve Account shall be disbursed to Borrower within thirty (30or to Guarantor in accordance with Section 9.9(b) days of such releasehereof).

PIP Reserve Funds. (a) Borrower shall deposit into an Eligible Account held by Lender or Lender’s agent (the “PIP Reserve Account”) with Agent (i) on or prior to the date which is one hundred eighty (180) days after the Closing Date, the sum of $0 for 3,346,500.00 (the applicable Individual Properties specified “Required PIP Reserve Funds Amount”) on Schedule 9.9 for the remaining 2018 budgeted costs account of the Scheduled PIPs PIP Work anticipated to be completed during the term of the Loan and (ii) unless Guarantor has provided a to the extent the PIP GuarantyReserve Funds will be insufficient to pay the then estimated costs for any PIP Work (as estimated by Agent in its reasonable discretion), on the applicable PIP Deposit (yA) in the case of any existing or renewal Franchise Agreement, prior to the effective date that any PIP other than is imposed thereunder and (B) in the Scheduled PIPcase of any new Franchise Agreement, including, without limitation, any PIP relating on or prior to a Replacement Management Agreement and/or Replacement the date such new Franchise Agreement (is executed and delivered. For the “New PIP”) is imposed by a Franchisor or Manageravoidance of doubt, the Required PIP Reserve Funds Amount shall be deposited with Agent, in whole or in part, on each Monthly Payment Date that occurs within the one hundred eighty (180) day period immediately following the Closing Date via the waterfall set forth in Section 3.5 hereof; provided, however, that an amount equal to (x) the Required Deposit for such New PIP Reserve Funds Amount minus (y) all amounts previously deposited with Agent as PIP Reserve Funds shall be immediately due and (z) payable by Borrower on the first Business Day of each calendar year thereafterdate which is one hundred eighty (180) days after the Closing Date. As used herein, “PIP Deposit” shall mean, with respect to any PIP, an amount equal to 110% of the excess, if any, of (I) the costs of the related PIP Required Deposit Work as estimated by Agent in its reasonable discretion (which such cost shall be exclusive of the cost of any such deposits to PIP Work which is duplicative of any Approved FF&E for which adequate FF&E Reserve Funds exist hereunder (as reasonably determined by Agent) (the “Duplicative FF&E”)) over (II) the then remaining PIP Reserve Account described in clauses (i) and (ii) above shall hereinafter be referred to, collectively, as the “PIP Reserve Deposits”Funds. Amounts held in the PIP Reserve Account deposited with Agent pursuant to this Section 4.5(a) are herein referred to herein as the “PIP Reserve Funds”. In lieu of making any of the PIP Reserve Deposits in cash, Borrower shall be entitled to, at its option, deposit with Lender a Letter of Credit in the amount of such applicable PIP Reserve Deposit. The aggregate amount of PIP Reserve Funds and the notional amount of any such Letter of Credit delivered for any PIP Reserve Deposits shall not exceed the remaining cost of any PIP as reasonably determined by Lender, and any such excess shall be promptly released to Borrower or, in the case of a Letter of Credit, the amount thereof shall be reduced. ” (b) Provided no Event Subject to the terms and conditions of Default shall have occurred and be continuingthis Section 4.5, within thirty (30) days of Borrower’s complying with the requirements contained in Section 9.7, Lender Agent shall make disbursements from the PIP Reserve Account directly to Borrower Funds as requested by Borrower (but not more than once in each calendar quarter) to reimburse Borrower for BorrowerXxxxxxxx’s actual out of actual, out-of-pocket costs and expenses incurred solely in connection with the performance of the related PIP Work; provided that: (including, without limitation, any project management fees, construction management fees and other similar fees i) such request is made (whether owed to Manager or otherwise)), no more frequently than once in any thirty (30A) day period and in an amount of no less than $5,000.00, upon delivery by Borrower of (1) Lender’s standard on a form of draw request accompanied specified or approved by copies Agent and which shall at a minimum set forth (1) a general description of invoices the PIP Work for which such disbursement is requested and (2) the amounts requestedaccuracy of the invoices, includingto be attached thereto, without limitation, invoices for all items or materials purchased and all labor or services provided showing (A) which shall provide the quantity and price of each item purchased, if such the PIP Work includes the purchase or replacement of specific item, items (Bsuch as appliances) and the price of all materials (grouped by type or category) used in any item of PIP Work other than the purchase or replacement of specific items, (C) items and the cost of all contracted labor or other services or expenses attributable applicable to each item of PIP Work for which such PIP, request for disbursement is made and (DB) at least ten (10) days prior to the PIP Completion Evidencedate on which Borrower requests such disbursement be made; (ii) on the date such request is received by Agent and on the date such disbursement is to be made, no Event of Default shall exist and remain uncured; (2iii) if required at Agent’s option, Agent shall have verified (by Lender, for requests in excess of $250,000.00 for a single item, lien waivers and releases from all parties furnishing materials and/or services in connection with the requested payment (conditioned upon the receipt of payment of the requested fund) and (3) such other evidence as may be reasonably required by Lender of performance and payment of the applicable PIP. Lender may additionally require an inspection of the Property conducted at Borrower’s expense prior to making a disbursement from the PIP Reserve Account, in order to verify completion of replacements and repairs of items in excess of $250,000.00 for which reimbursement is sought. (cexpense) The insufficiency of any balance in the PIP Reserve Account shall not relieve Borrower from its obligation to fulfill all preservation and maintenance covenants in the Loan Documents. (d) Any PIP Reserve Funds attributable to an Individual Property that has been released from the Lien performance of the Mortgages in accordance with associated PIP Work; (iv) the terms hereof shall request for disbursement is accompanied by (A) an Officer’s Certificate certifying that (1) such funds will be disbursed used to Borrower within thirty (30) days of such release.reimburse

PIP Reserve Funds. (a) Borrower shall deposit into an Eligible Account held by Lender or Lender’s agent (the “PIP Reserve Account”) (i) on the Closing Date, $0 5,126,176.00 for the applicable Individual Properties specified on Schedule 9.9 for the remaining 2018 budgeted costs of the Scheduled PIPs and (ii) unless Guarantor has provided a PIP Guaranty, on (y) the date that any PIP other than the Scheduled PIP, including, without limitation, any PIP relating to a Replacement Management Agreement and/or Replacement Franchise Agreement (the “New PIP”) is imposed by a Franchisor or Manager, the PIP Required Deposit for such New PIP and (z) on the first Business Day of each calendar year thereafter, an amount equal to the PIP Required Deposit (any such deposits to the PIP Reserve Account described in clauses (i) and (ii) above shall hereinafter be referred to, collectively, as the “PIP Reserve Deposits”. Amounts held in the PIP Reserve Account are herein referred to as the “PIP Reserve Funds”. In lieu of making any of the PIP Reserve Deposits in cash, Borrower shall be entitled to, at its option, deposit with Lender a Letter of Credit in the amount of such applicable PIP Reserve Deposit. The aggregate amount of PIP Reserve Funds and the notional amount of any such Letter of Credit delivered for any PIP Reserve Deposits shall not exceed the remaining cost of any PIP as reasonably determined by Lender, and any such excess shall be promptly released to Borrower or, in the case of a Letter of Credit, the amount thereof shall be reduced. (b) Provided no Event of Default shall have occurred and be continuing, within thirty (30) days of Borrower’s complying with the requirements contained in Section 9.7, Lender shall make disbursements from the PIP Reserve Account directly to Borrower as requested by Borrower for Borrower’s actual out of pocket expenses incurred in connection with performance of the PIP (including, without limitation, any project management fees, construction management fees and other similar fees (whether owed to Manager or otherwise)), no more frequently than once in any thirty (30) day period and in an amount of no less than $5,000.00, upon delivery by Borrower of (1) Lender’s standard form of draw request accompanied by copies of invoices for the amounts requested, including, without limitation, invoices for all items or materials purchased and all labor or services provided showing (A) the quantity and price of each item purchased, if such PIP includes the purchase or replacement of specific item, (B) the price of all materials (grouped by type or category) used in other than the purchase or replacement of specific items, (C) the cost of all contracted labor or other services or expenses attributable to such PIP, and (D) the PIP Completion Evidence, (2) if required by Lender, for requests in excess of $250,000.00 for a single item, lien waivers and releases from all parties furnishing materials and/or services in connection with the requested payment (conditioned upon the receipt of payment of the requested fund) and (3) such other evidence as may be reasonably required by Lender of performance and payment of the applicable PIP. Lender may additionally require an inspection of the Property at Borrower’s expense prior to making a disbursement from the PIP Reserve Account, in order to verify completion of replacements and repairs of items in excess of $250,000.00 for which reimbursement is sought. (c) The insufficiency of any balance in the PIP Reserve Account shall not relieve Borrower from its obligation to fulfill all preservation and maintenance covenants in the Loan Documents. (d) Any PIP Reserve Funds attributable to an Individual Property that has been released from the Lien of the Mortgages in accordance with the terms hereof shall be disbursed to Borrower within thirty (30) days of such release.

PIP Reserve Funds. (a) Borrower shall deposit into an Eligible Account held by Lender or Lender’s agent (the “PIP Reserve Account”) (i) on the Closing Date, $0 0.00 for the applicable Individual Properties specified on Schedule 9.9 for the remaining 2018 budgeted costs of the Scheduled PIPs and (ii) unless Guarantor has provided a PIP Guaranty, on (y) the date that any PIP other than the Scheduled PIP, including, without limitation, any PIP relating to a Replacement Management Agreement and/or Replacement Franchise Agreement (the “New PIP”) is imposed by a Franchisor or Manager, the PIP Required Deposit for such New PIP and (z) on the first Business Day of each calendar year thereafter, an amount equal to the PIP Required Deposit (any such deposits to the PIP Reserve Account described in clauses (i) and (ii) above shall hereinafter be referred to, collectively, as the “PIP Reserve Deposits”. Amounts held in the PIP Reserve Account are herein referred to as the “PIP Reserve Funds”. In lieu of making any of the PIP Reserve Deposits in cash, Borrower shall be entitled to, at its option, deposit with Lender a Letter of Credit in the amount of such applicable PIP Reserve Deposit. The aggregate amount of PIP Reserve Funds and the notional amount of any such Letter of Credit delivered for any PIP Reserve Deposits shall not exceed the remaining cost of any PIP as reasonably determined by Lender, and any such excess shall be promptly released to Borrower or, in the case of a Letter of Credit, the amount thereof shall be reduced. (b) Provided no Event of Default shall have occurred and be continuing, within thirty (30) days of Borrower’s complying with the requirements contained in Section 9.7, Lender shall make disbursements from the PIP Reserve Account directly to Borrower as requested by Borrower for Borrower’s actual out of pocket expenses incurred in connection with performance of the PIP (including, without limitation, any project management fees, construction management fees and other similar fees (whether owed to Manager or otherwise)), no more frequently than once in any thirty (30) day period and in an amount of no less than $5,000.00, upon delivery by Borrower of (1) Lender’s standard form of draw request accompanied by copies of invoices for the amounts requested, including, without limitation, invoices for all items or materials purchased and all labor or services provided showing (A) the quantity and price of each item purchased, if such PIP includes the purchase or replacement of specific item, (B) the price of all materials (grouped by type or category) used in other than the purchase or replacement of specific items, (C) the cost of all contracted labor or other services or expenses attributable to such PIP, and (D) the PIP Completion Evidence, (2) if required by Lender, for requests in excess of $250,000.00 for a single item, lien waivers and releases from all parties furnishing materials and/or services in connection with the requested payment (conditioned upon the receipt of payment of the requested fund) and (3) such other evidence as may be reasonably required by Lender of performance and payment of the applicable PIP. Lender may additionally require an inspection of the Property at Borrower’s expense prior to making a disbursement from the PIP Reserve Account, in order to verify completion of replacements and repairs of items in excess of $250,000.00 for which reimbursement is sought. (c) The insufficiency of any balance in the PIP Reserve Account shall not relieve Borrower from its obligation to fulfill all preservation and maintenance covenants in the Loan Documents. (d) Any PIP Reserve Funds attributable to an Individual Property that has been released from the Lien of the Mortgages in accordance with the terms hereof shall be disbursed to Borrower within thirty (30) days of such release.

PIP Reserve Funds. (a) Borrower shall deposit into an Eligible Account held by Lender or Lender’s agent (the “PIP Reserve Account”) (i) on the Closing Date, the sum of $0 6,359,709.00 for the applicable Individual Properties specified on Schedule 9.9 for the remaining 2018 budgeted costs completion of the budgeted PIP Work for 2015 under the Scheduled PIPs and (ii) unless Guarantor has provided a PIP GuarantyPIPs. Thereafter, on (y) the date that any PIP other than first Payment Date of each calendar year or on the Scheduled PIPfirst Payment Date following the imposition by Franchisor or Manager, includingas applicable, without limitation, of any PIP relating to a Replacement Management Agreement (or Extended Replacement Management Agreement) and/or Replacement Franchise Agreement (or Extended Replacement Franchise Agreement) (the “New PIP”) is imposed by a Franchisor or Franchisor’s or Manager’s, as applicable, agreement to change any then-existing PIP (including any Scheduled PIP), as applicable, if the then outstanding Aggregate PIP Work Costs (inclusive of costs and expenses related to any Scheduled PIP and New PIP) is equal to or greater than $20,000,000.00 (the “PIP Threshold”), Borrower shall deposit with Lender an amount equal to the unreserved portion of the PIP Required Deposit for such New calendar year. Notwithstanding anything contained herein to the contrary, in the event that Guarantor fails to satisfy the Minimum Net Worth Requirement, Borrower shall (i) deposit or cause to be deposited into the PIP Reserve Account an amount equal to one hundred percent (100%) of the then-outstanding unreserved Aggregate PIP Work Costs (inclusive of costs and expenses related to any Scheduled PIP and New PIP) or (zii) cause a Replacement Guarantor to deliver to Lender a substitute PIP Guaranty in the form of the PIP Guaranty delivered to Lender on the first Business Day Closing Date. If at any time, the then-outstanding Aggregate PIP Work Costs equal or exceed ten percent (10%) of each calendar year thereafterthe then-outstanding principal balance of the Loan, upon request of Lender, Borrower shall deliver, at Borrower’s sole cost and expense, a New Non-Consolidation Opinion. If the Borrower is unable to deliver a New Non-Consolidation Opinion in accordance with the immediately preceding sentence, Borrower shall deposit into the PIP Reserve Account an amount equal to the amount by which the then-outstanding Aggregate PIP Required Deposit Work Costs equal or exceed ten percent (any such deposits to 10%) of the PIP Reserve Account described in clauses (i) and (ii) above shall hereinafter be referred to, collectively, as then-outstanding principal balance of the “PIP Reserve Deposits”Loan. Amounts held in the PIP Reserve Account are herein referred to as the “PIP Reserve Funds”. In lieu of making any of the PIP Reserve Deposits in cash, Borrower shall be entitled to, at its option, deposit with Lender a Letter of Credit in the amount of such applicable PIP Reserve Deposit. The aggregate amount of PIP Reserve Funds and the notional amount of any such Letter of Credit delivered for any PIP Reserve Deposits shall not exceed the remaining cost of any PIP as reasonably determined by Lender, and any such excess shall be promptly released to Borrower or, in the case of a Letter of Credit, the amount thereof shall be reduced. (b) Provided no Event of Default shall have occurred and be continuing, within thirty (30) days of Borrower’s complying with the requirements contained in Section 9.7, Lender shall make disbursements from the PIP Reserve Account directly to Borrower as requested by Borrower for Borrower’s actual out of pocket expenses incurred in connection with performance of the PIP (including, without limitation, any project management fees, construction management fees and other similar fees (whether owed to Manager or otherwise)), no more frequently than once in any thirty (30) day period and in an amount of no less than $5,000.00, upon delivery by Borrower of (1) Lender’s standard form of draw request accompanied by copies of invoices for the amounts requested, including, without limitation, invoices for all items or materials purchased and all labor or services provided showing (A) the quantity and price of each item purchased, if such PIP includes the purchase or replacement of specific item, (B) the price of all materials (grouped by type or category) used in other than the purchase or replacement of specific items, (C) the cost of all contracted labor or other services or expenses attributable to such PIP, and (D) the PIP Completion Evidence, (2) if required by Lender, for requests in excess of $250,000.00 for a single item, lien waivers and releases from all parties furnishing materials and/or services in connection with the requested payment (conditioned upon the receipt of payment of the requested fund) and (3) such other evidence as may be reasonably required by Lender of performance and payment of the applicable PIP. Lender may additionally require an inspection of the Property at Borrower’s expense prior to making a disbursement from the PIP Reserve Account, in order to verify completion of replacements and repairs of items in excess of $250,000.00 for which reimbursement is sought. (c) The insufficiency of any balance in the PIP Reserve Account shall not relieve Borrower from its obligation to fulfill all preservation and maintenance covenants in the Loan Documents. (d) Any PIP Reserve Funds attributable to an Individual Property that has been released from the Lien of the Mortgages in accordance with the terms hereof shall be disbursed to Borrower within thirty (30) days of such release.

PIP Reserve Funds. (ai) Borrower shall deposit into an Eligible Account held by Lender or Lender’s agent Servicer (the “PIP Reserve Account”) (i1) on the Closing Date, the sum of $0 for the applicable Individual Properties specified 383,676 on Schedule 9.9 for the remaining 2018 budgeted costs account of the Scheduled PIPs PIP and (ii) unless Guarantor has provided a PIP Guaranty, on (y2) the applicable PIP Deposit (less any amounts Lender confirms will be transferred from the Excess Cash Flow Account to the PIP Reserve Account in accordance with the applicable terms and conditions hereof) (A) in the case of any existing or renewal Franchise Agreement, prior to the effective date that any PIP (other than the Scheduled PIP, including, without limitation, any PIP relating to a Replacement Management Agreement and/or Replacement Franchise Agreement (the “New PIP”) is imposed by a Franchisor thereunder and (B) in the case of any new Franchise Agreement, on or Managerprior to the date such new Franchise Agreement is executed and delivered. Additionally, if, at any time, Lender determines that amounts on deposit in the PIP Required Deposit Reserve Account will be insufficient to pay the then estimated costs for any PIP Work (as estimated by Lender in its reasonable discretion after taking into account any portion thereof with respect to which Lender has received satisfactory evidence that same has previously been performed and paid for by Borrower in accordance with the terms hereof and the related Franchise Agreement), Borrower shall make a True Up Payment with respect to such New insufficiency into the PIP and (z) on Reserve Account. Notwithstanding anything to the first Business Day contrary contained herein, unless otherwise agreed to by Lender in writing, no disbursement of each calendar year thereafterPIP Reserve Funds shall be made hereunder until such True Up Payment is made. As used herein, “PIP Deposit” shall mean, with respect to any PIP, an amount equal to 125% of the costs of the related PIP Required Deposit Work as estimated by Lender in its reasonable discretion (which such cost shall be exclusive of the cost of any such deposits to the PIP Work which is duplicative of any Approved FF&E for which adequate FF&E Reserve Account described in clauses Funds exist hereunder (ias reasonably determined by Lender) and (ii) above shall hereinafter be referred to, collectively, as the “PIP Reserve DepositsDuplicative FF&E”)). Amounts held deposited in the PIP Reserve Account pursuant to this Section are herein referred to herein as the “PIP Reserve Funds”. In lieu of making any of the PIP Reserve Deposits in cash, Borrower shall be entitled to, at its option, deposit with Lender a Letter of Credit in the amount of such applicable PIP Reserve Deposit. The aggregate amount of PIP Reserve Funds and the notional amount of any such Letter of Credit delivered for any PIP Reserve Deposits shall not exceed the remaining cost of any PIP as reasonably determined by Lender, and any such excess shall be promptly released to Borrower or, in the case of a Letter of Credit, the amount thereof shall be reduced. (b) Provided no Event of Default shall have occurred and be continuing, within thirty (30) days of Borrower’s complying with the requirements contained in Section 9.7, Lender shall make disbursements from the PIP Reserve Account directly to Borrower as requested by Borrower for Borrower’s actual out of pocket expenses incurred in connection with performance of the PIP (including, without limitation, any project management fees, construction management fees and other similar fees (whether owed to Manager or otherwise)), no more frequently than once in any thirty (30) day period and in an amount of no less than $5,000.00, upon delivery by Borrower of (1) Lender’s standard form of draw request accompanied by copies of invoices for the amounts requested, including, without limitation, invoices for all items or materials purchased and all labor or services provided showing (A) the quantity and price of each item purchased, if such PIP includes the purchase or replacement of specific item, (B) the price of all materials (grouped by type or category) used in other than the purchase or replacement of specific items, (C) the cost of all contracted labor or other services or expenses attributable to such PIP, and (D) the PIP Completion Evidence, (2) if required by Lender, for requests in excess of $250,000.00 for a single item, lien waivers and releases from all parties furnishing materials and/or services in connection with the requested payment (conditioned upon the receipt of payment of the requested fund) and (3) such other evidence as may be reasonably required by Lender of performance and payment of the applicable PIP. Lender may additionally require an inspection of the Property at Borrower’s expense prior to making a disbursement from the PIP Reserve Account, in order to verify completion of replacements and repairs of items in excess of $250,000.00 for which reimbursement is sought. (c) The insufficiency of any balance in the PIP Reserve Account shall not relieve Borrower from its obligation to fulfill all preservation and maintenance covenants in the Loan Documents. (d) Any PIP Reserve Funds attributable to an Individual Property that has been released from the Lien of the Mortgages in accordance with the terms hereof shall be disbursed to Borrower within thirty (30) days of such release.