FF&E Reserve Accounts Clause Samples
The FF&E Reserve Accounts clause establishes a dedicated fund for the ongoing replacement and maintenance of furniture, fixtures, and equipment (FF&E) within a property. Typically, a specified percentage of gross revenue is regularly deposited into this account, ensuring that sufficient resources are available for periodic upgrades or repairs of items such as hotel room furnishings, lobby décor, or restaurant equipment. This clause helps maintain the property's quality and operational standards over time, preventing unexpected financial burdens and ensuring the asset remains competitive and attractive to guests or tenants.
FF&E Reserve Accounts. The Borrower shall cause each Subsidiary Guarantor or Operating Lessee to maintain a FF&E Reserve Account with respect to each Collateral Property, to pledge such FF&E Reserve Account to the Administrative Agent for its benefit and the benefit of the Lenders as Collateral, and to deposit funds therein and to withdraw funds therefrom on and subject to the following terms and conditions:
(a) Except as otherwise provided in subsection (d), each FF&E Reserve Account shall be held by the Administrative Agent. There shall be executed and delivered with respect to each FF&E Reserve Account (whether or not held by the Administrative Agent) a Control Agreement. Except as otherwise provided in subsection (d), the Administrative Agent may, at any time that there exists an Event of Default, exercise its right under the Control Agreement to control the FF&E Reserve Accounts.
(b) Monthly deposits into the FF&E Reserve Account in an amount equal to the FF&E Reserve for any month shall be made not later than 15th day of the succeeding month if the FF&E Reserve Account is held by the Administrative Agent or otherwise when required by the Management Agreement.
(c) Funds may be withdrawn from the FF&E Reserve Account (whether held by the Administrative Agent or otherwise), and the Borrower agrees that it shall cause each Subsidiary Guarantor and Operating Lessee to withdraw and use such funds, solely for the payment of expenditures for FF&E and other capital items in accordance with the applicable Approved Capital Budget.
(d) If the Manager of a Collateral Property is, or is an Affiliate of, a Major Hotel Operator, (i) the FF&E Reserve Account shall not be required to be held by the Administrative Agent, and (ii) the Management Agreement Assignment/Subordination and Control Agreement with respect to such Collateral Property may provide that the Administrative Agent shall not interfere with such Manager’s ability to access funds in such FF&E Reserve Account during the term of its Management Agreement for purposes permitted under such Management Agreement.
(e) The Administrative Agent shall have the right (to be exercised from time to time at its election) to audit the Loan Parties’ books and records in order to determine whether or not the funds withdrawn or disbursed from the FF&E Reserve Account have been spent only for the purpose for which they were withdrawn or disbursed. The Borrower shall, and shall cause each other Specified Loan Party to, cooperate with the Administr...
FF&E Reserve Accounts. (a) (i) Within 30 days after the Effective Date, (x) the Borrower or its respective Subsidiary shall establish FF&E Reserve Accounts with respect to each Initial Hotel Property and (y) the Borrower or its respective Subsidiary shall take all actions as may be necessary, or in the reasonable opinion of the Administrative Agent desirable, to perfect the Collateral Agent's security interest in each FF&E Reserve Account (and all funds from time to time on deposit therein) with respect to the New York Marriott Financial Center and the San Francisco Marriott and (ii) within 30 days after each acquisition of a Borrowing Base Property, the Borrower or its respective Subsidiary shall establish an FF&E Reserve Account with respect to such Borrowing Base Property and shall take all actions as may be necessary, or in the reasonable opinion of the Administrative Agent desirable, to perfect the Collateral Agent's security interest in such FF&E Reserve Account (and all funds from time to time on deposit therein).
(b) On or before the last day of the month immediately following the end of each accounting period of the Borrower, commencing with its accounting period ending on June 20, 1997, Holdings will, and will cause its respective Subsidiaries or Facility Managers to, deposit into the FF&E Reserve Account for each Borrowing Base Property at least that amount required to be deposited into such FF&E Reserve Account pursuant to the terms of the respective Management Agreement, provided that in no event shall the amount so deposited in any accounting period of the Borrower in respect of any Borrowing Base Property be less than 3% of the Gross Revenues from such Borrowing Base Property for such accounting period (net of FF&E expenditures made during such accounting period) (with such amount to increase to 5% of such Gross Revenues within a reasonable time reasonably acceptable to the Administrative Agent after the entering into of such Management Agreement) or more than 7% of the Gross Revenues from such Borrowing Base Property for such accounting period (net of FF&E expenditures made during such accounting period). The funds on deposit in the FF&E Reserve Accounts shall be used by the Borrower or its respective Subsidiary solely to (i) renew or replace FF&E or make certain Capital Expenditures for the respective Borrowing Base Property on the terms and conditions set forth in the respective Management Agreement and in this Agreement and (ii) repay outstanding Indebtedness ...
FF&E Reserve Accounts. (a) The Borrower or the Operating Lessee shall deposit into the FF&E Reserve Account (which account is hereby pledged to Administrative Agent, for the benefit of Lenders, as additional collateral for the Loan), not later than the fifteenth (15th) day of each month during the term of the Loan an amount equal to the greater of (a) four percent (4%) of Gross Operating Revenues for the Property for the previous month and (b) the amount required to be deposited into the “Reserve Fund” for such month pursuant to the terms of the Franchise Agreement (the “FF&E Reserve”).
(b) Provided no Event of Default then exists, funds may be withdrawn from the FF&E Reserve Account, and the Borrower and the Operating Lessee shall each withdraw and use such funds, solely for the payment of expenditures for FF&E and other capital items in accordance with the applicable Approved Capital Budget.
(c) The Administrative Agent shall have the right (to be exercised from time to time at its election) to audit the Borrower’s and the Operating Lessee’s books and records in order to determine whether or not the funds withdrawn or disbursed from the FF&E Reserve Account have been spent only for the purpose for which they were withdrawn or disbursed. The Borrower and the Operating Lessee shall each cooperate with the Administrative Agent in connection with any such audit.
FF&E Reserve Accounts. (a) Florida Co-Borrower shall, on the Effective Date, establish and maintain a segregated account of Florida Co-Borrower with the Reserve Account Bank, which account (the "Florida FF&E Reserve Account") shall be subject to an Account Control Agreement, and Florida Co-Borrower shall deposit into the Florida FF&E Reserve Account, within 45 days after the last day of each Fiscal Quarter, an amount equal to the Required FF&E Percentage of the Gross Revenues from the Opryland Hotel Florida for such Fiscal Quarter, and shall insure that the total deposits into the Florida FF&E Reserve Account for each calendar year are not less than the Required FF&E Percentage of the Gross Revenues from the Opryland Hotel Florida for such calendar year. Florida Co-Borrower shall invest all funds from time to time on deposit in the Florida FF&E Reserve Account solely in Cash Equivalent Investments.
(b) Florida Co-Borrower shall be permitted to request funds from the Florida FF&E Reserve Account (the amount on deposit therein from time to time, the "Florida FF&E Reserve") from time to time as necessary, but no more often than once in any calendar month, to pay for Permitted FF&E Expenditures as the same are incurred in accordance with the procedures for disbursements from the Florida FF&E Reserve Account set forth in Section 4.3 hereof. Simultaneously with each withdrawal, Florida Co-Borrower shall furnish or cause to be furnished to Administrative Agent a complete statement and accounting of any use or disbursement of funds in the Florida FF&E Reserve Account, identifying the purpose, amount and type of each expenditure and accompanied by copies of all bank statements with respect to the Florida FF&E Reserve Account not previously delivered to the Administrative Agent, all certified by an Authorized Officer and by any Property Manager for the Opryland Hotel Florida.
(c) If a Default or Unmatured Default has occurred and is continuing, Florida Co-Borrower shall have no right to request the withdrawal of any funds from the Florida FF&E Reserve Account, and if a Default has occurred and is continuing, the Administrative Agent may apply or direct the Reserve Account Bank to apply all funds then on deposit in the Florida FF&E Reserve Account to the Secured Obligations in accordance with the provisions of Section 8.1.
(d) Texas Co-Borrower shall, on or before the Final Completion Date, establish and thereafter maintain a segregated account of Texas Co-Borrower with the Reserve Account...