Common use of FF&E Reserve Clause in Contracts

FF&E Reserve. A. Submanager shall establish a reserve account (the "FF&E Reserve"), in a bank or similar institution reasonably acceptable to both Submanager and Primary Manager, to cover the cost of: (i) replacements, renewals and additions to the FF&E at the Hotel; and (ii) Special Capital Expenditures. Withdrawals from the FF&E Reserve shall be made solely by representatives of Submanager whose signatures have been authorized. Primary Manager covenants that, as of the Take-Over Date, the dollar amount in the FF&E Reserve shall be no less than the Initial FF&E Reserve Balance. If Primary Manager fails to provide the dollar amount in the FF&E Reserve in an amount no less than the Initial FF&E Reserve Balance as required under this Section 5.02.A, Submanager shall have the right (after first giving Primary Manager ten (10) days written notice thereof) to deduct the required amounts from Gross Revenues. In addition, Primary Manager covenants that the Five-Year Plan attached hereto as Exhibit "B-1" shall be implemented, subject to any mutually-approved changes, as Special Capital Expenditures from the FF&E Reserve. B. During the Term of this Agreement, subject to the provisions of subsection E, below, Submanager shall transfer into the FF&E Reserve an amount set forth on Exhibit "A-1" (except to the extent that the Five-Year Plan sets forth different percentage(s) applicable to certain periods in the Term, in which event such percentage(s) in the Five-Year Plan shall be controlling during such periods) for each such Accounting Period. Transfers into the FF&E Reserve shall be made at the time of each interim accounting described in Section 4.01 hereof. All amounts transferred into the FF&E Reserve pursuant to this Section 5.02.B shall be paid from Gross Revenues as Deductions. C. Submanager shall prepare an annual estimate (the "FF&E Estimate") of the expenditures necessary for (1) replacements, renewals and additions to the FF&E of the Hotel, and (2) Special Capital Expenditures, during the ensuing Fiscal Year and shall deliver the FF&E Estimate to Primary Manager for its approval (which shall not be unreasonably withheld or delayed), at the same time as Submanager submits the Proposed Business Plan described in Section

FF&E Reserve. A. Submanager Manager shall cause Marriott to establish a reserve account (the "FF&E Reserve"), in a bank or similar institution reasonably acceptable to both Submanager Manager and Primary ManagerLessee, to cover the cost of: (i) replacements, renewals and additions to the FF&E at the Hotel; and (ii) Special Capital Expenditures. Withdrawals from the FF&E Reserve shall be made solely by representatives of Submanager Marriott whose signatures have been authorized. Primary Manager Lessee covenants that, as of the Take-Over Date, the dollar amount in the FF&E Reserve shall be no less than the Initial FF&E Reserve Balance. If Primary Manager Lessee fails to provide the dollar amount in the FF&E Reserve in an amount no less than the Initial FF&E Reserve Balance as required under this Section 5.02.A, Submanager Marriott shall have the right (after first giving Primary Manager Lessee ten (10) days written notice thereof) to deduct the required amounts from Gross Revenues. In addition, Primary Manager Lessee covenants that the Five-Year Plan attached hereto as Exhibit "B-1" shall be implemented, subject to any mutually-approved changes, as Special Capital Expenditures from the FF&E Reserve. B. During the Term of this Agreement, subject to the provisions of subsection E, below, Submanager Lessee shall transfer into the FF&E Reserve an amount set forth on Exhibit "A-1" (except to the extent that the Five-Year Plan sets forth different percentage(s) applicable to certain periods in the Term, in which event such percentage(s) in the Five-Year Plan shall be controlling during such periods) for each such Accounting Period. Transfers into the FF&E Reserve shall be made at the time of each interim accounting described in Section 4.01 hereof. All amounts transferred into the FF&E Reserve pursuant to this Section 5.02.B shall be paid from Gross Revenues as Deductions. C. Submanager Manager shall cause Marriott to prepare an annual estimate (the "FF&E Estimate") of the expenditures necessary for (1) replacements, renewals and additions to the FF&E of the Hotel, and (2) Special Capital Expenditures, during the ensuing Fiscal Year and shall deliver the FF&E Estimate to Primary Manager Lessee for its approval (which shall not be unreasonably withheld or delayed), at the same time as Submanager Manager submits the Proposed Business Plan described in Section

FF&E Reserve. A. Submanager (a) On or prior to the last Business Day of each calendar month, until all obligations under the Loan Documents have been paid in full, Borrower shall establish cause Manager to deposit into a reserve account (Manager’s Account an amount equal to the "FF&E Reserve"), in a bank or similar institution reasonably acceptable to both Submanager and Primary Manager, to cover the cost of: greater of (i) replacementsfour percent (4%) of Gross Operating Revenues for the Property for the previous month, renewals and additions to the FF&E at the Hotel; and (ii) Special Capital Expendituresthe amount required to be deposited into any FF&E reserve for such month pursuant to the terms of the Management Agreement. (b) On the Closing Date, Borrower shall establish and maintain with Administrative Agent the FF&E Reserve Account for deposit and application as described in this subsection. Withdrawals On the Effective Date, Borrower and Operating Lessee shall deposit into the FF&E Reserve Account an amount equal to $0. In the event Manager fails to make any deposit required by Section 4.3(a) above, Administrative Agent may, each month thereafter during the term of the Loan, withdraw from the Collection Account, prior to any disbursement to or on behalf of Borrower or Operating Lessee, an amount (each, an “FF&E Reserve Deposit”) equal to any deficiency in amounts deposited by Manager (such that, at the end of the year, the aggregate amount on deposit will be, in Administrative Agent’s estimate, sufficient to aggregate the total FF&E reserve amounts required under the Management Agreement and hereunder for such year) and deposit such amount into the FF&E Reserve Account. (c) Provided no Default is continuing, within ten (10) Business Days following submission in writing of a request therefor by Borrower, Administrative Agent shall provide to Borrower from the FF&E Reserve Account, funds to be used by Borrower and Operating Lessee solely for the payment of expenditures for FF&E and other capital items in accordance with the Capital Budget. (d) Following a Default, Administrative Agent may apply all or any part of amounts escrowed pursuant to Section 4.3(b) (including any interest earned on such amounts) to any obligations under the Loan Documents and/or to cure such Default, in which event Borrower shall be made solely by representatives of Submanager whose signatures have been authorized. Primary Manager covenants thatrequired to restore all amounts so applied, as well as to cure any other aspect of such Default not cured by such application. (e) Upon assignment of the Take-Over DateLoan, Administrative Agent shall have the dollar amount right to assign all amounts collected and in its possession in the FF&E Reserve Account to its assignee whereupon Administrative Agent shall be no less than the Initial FF&E Reserve Balance. If Primary Manager fails to provide the dollar amount in the FF&E Reserve in an amount no less than the Initial FF&E Reserve Balance as required under this Section 5.02.A, Submanager released from all liability with respect thereto. (f) The Administrative Agent shall have the right (after first giving Primary Manager ten (10) days written notice thereofto be exercised from time to time at its election) to deduct audit Borrower’s and Operating Lessee’s books and records in order to determine whether or not the required amounts from Gross Revenues. In addition, Primary Manager covenants that the Five-Year Plan attached hereto as Exhibit "B-1" shall be implemented, subject to any mutually-approved changes, as Special Capital Expenditures funds withdrawn or disbursed from the FF&E ReserveReserve Account have been spent only for the purpose for which they were withdrawn or disbursed. Borrower and Operating Lessee shall cooperate with Administrative Agent in connection with any such audit. B. During (g) Promptly upon full repayment of the Term obligations under the Loan Documents (other than full repayment of this Agreementthe obligations under the Loan Documents as a consequence of a foreclosure or conveyance in lieu of foreclosure of the liens and security interests securing the obligations under the Loan Documents), subject the balance of all amounts collected and in Lender’s possession and not applied to the provisions payment of subsection E, below, Submanager shall transfer into the expenditures for FF&E Reserve an amount as set forth on Exhibit "A-1" (except to the extent that the Five-Year Plan sets forth different percentage(s) applicable to certain periods in the Term, in which event such percentage(s) in the Five-Year Plan shall be controlling during such periods) for each such Accounting Period. Transfers into the FF&E Reserve shall be made at the time of each interim accounting described in Section 4.01 hereof. All amounts transferred into the FF&E Reserve pursuant to this Section 5.02.B 4.3 shall be paid from Gross Revenues as Deductionsto Borrower and no other party shall have any right or claim thereto. C. Submanager shall prepare an annual estimate (the "FF&E Estimate") of the expenditures necessary for (1) replacements, renewals and additions to the FF&E of the Hotel, and (2) Special Capital Expenditures, during the ensuing Fiscal Year and shall deliver the FF&E Estimate to Primary Manager for its approval (which shall not be unreasonably withheld or delayed), at the same time as Submanager submits the Proposed Business Plan described in Section

FF&E Reserve. A. Submanager Manager shall cause Marriott to establish a reserve account (the "FF&E Reserve"), in a bank or similar institution reasonably acceptable to both Submanager Manager and Primary ManagerLessee, to cover the cost of: (i) replacements, renewals and additions to the FF&E at the Hotel; and (ii) Special Capital Expenditures. Withdrawals from the FF&E Reserve shall be made solely by representatives of Submanager Marriott whose signatures have been authorized. Primary Manager Lessee covenants that, as of the Take-Over Date, the dollar amount in the FF&E Reserve shall be no less than the Initial FF&E Reserve Balance. If Primary Manager Lessee fails to provide the dollar amount in the FF&E Reserve in an amount no less than the Initial FF&E Reserve Balance as required under this Section 5.02.A, Submanager Marriott shall have the right (after first giving Primary Manager Lessee ten (10) days written notice thereof) to deduct the required amounts from Gross Revenues. In addition, Primary Manager Lessee covenants that the Five-Year Plan attached hereto as Exhibit "B-1" shall be implemented, subject to any mutually-approved changes, as Special Capital Expenditures from the FF&E Reserve. B. During the Term of this Agreement, subject to the provisions of subsection E, below, Submanager Lessee shall transfer into the FF&E Reserve an amount set forth on Exhibit "A-1" (except to the extent that the Five-Year Plan sets forth different percentage(s) applicable to certain periods in the Term, in which event such percentage(s) in the Five-Year Plan shall be controlling during such periods) for each such Accounting Period. Transfers into the FF&E Reserve shall be made at the time of each interim accounting described in Section 4.01 hereof. All amounts transferred into the FF&E Reserve pursuant to this Section 5.02.B shall be paid from Gross Revenues as Deductions. C. Submanager Manager shall cause Marriott to prepare an annual estimate (the "FF&E Estimate") of the expenditures necessary for (1) replacements, renewals and additions to the FF&E of the Hotel, and (2) Special Capital Expenditures, during the ensuing Fiscal Year and shall deliver the FF&E Estimate to Primary Manager Lessee for its approval (which shall not be unreasonably withheld or delayed), at the same time as Submanager submits the Proposed Business Plan described in Sectionunreasonably

FF&E Reserve. A. Submanager Manager shall establish a reserve account (the "“FF&E Reserve"), ”) in the name of Owner doing business as the Hotel (but on which representatives of Manager are sole signatories) in a bank or similar institution reasonably acceptable to both Submanager Manager and Primary Manager, Owner to cover the cost of: (i) of the following items, provided, however, that if a Qualified Lender that holds a Qualified Loan designates a one or more specific banks for any of such reserve account, then Manager shall establish such reserve account in the bank or banks so designated by such Qualified Lender: 1 replacements, renewals and additions to the FF&E at the Hotel; and B. Contemporaneously with Owner’s acquisition of title to the Hotel and (ii) Special Capital Expenditures. Withdrawals from execution of this Agreement, Owner shall contribute to the FF&E Reserve shall be made solely by representatives of Submanager whose signatures have been authorized. Primary Manager covenants that, as of the Take-Over Date, the dollar amount in the FF&E Reserve shall be no less than the Initial FF&E Reserve Balance. If Primary Manager fails Owner’s initial contribution to provide the dollar amount in fund the FF&E Reserve in an amount no less than the Initial FF&E Reserve Balance as required under this Section 5.02.A, Submanager shall have the right (after first giving Primary Manager ten (10) days written notice thereof) to deduct the required amounts from Gross Revenues. In addition, Primary Manager covenants that the Five-Year Plan attached hereto as Exhibit "B-1" shall be implemented, subject to any mutually-approved changes, as Special Capital Expenditures from the FF&E Reserve. B. During the Term of this Agreement, subject to the provisions of subsection E, below, Submanager shall transfer into the FF&E Reserve an amount set forth on Exhibit "A-1" (except to Schedule 1. For each Accounting Period during the extent that term, Manager shall transfer the Five-Year Plan sets amounts set forth different percentage(s) applicable to certain periods in Schedule 1 into the Term, in which event such percentage(s) in the Five-Year Plan shall be controlling during such periods) for each such Accounting PeriodFF&E Reserve. Transfers into the FF&E Reserve shall be made at the time of each interim accounting described in Section 4.01 hereof. All amounts transferred into the FF&E Reserve pursuant to this Section 5.02.B shall be paid from Gross Revenues as DeductionsRevenues. FF&E Reserve contributions to the extent of the funding obligation set forth in item 16 of Schedule 1 shall be a Deduction. C. Submanager Manager shall prepare an annual estimate (the "“FF&E Estimate"”) of the expenditures necessary for (1) replacements, renewals and additions to the FF&E of the Hotel, and (2) Special Capital Expenditures, during the ensuing Fiscal Year and shall deliver the FF&E Estimate to Primary Manager Owner for its review and approval (which shall not be unreasonably withheld or delayed), at the same time as Submanager Manager submits the Proposed Business Plan proposed Annual Operating Budget described in SectionSection 4.04. The FF&E Estimate shall also indicate the estimated time schedule for making such replacements, renewals, and additions. Owner’s rights to review and approve the FF&E Estimate, as well as the resolution of any disputes related thereto, shall be governed by the terms and conditions of Section 4.04, with the FF&E Estimate being treated in the same manner as the Proposed Annual Operating Budget under Section 4.04. D. Manager shall from time to time make such (1) replacements, renewals and additions to the FF&E of the Hotel, and (2) Special Capital Expenditures, each in accordance with the FF&E Estimate, or as may be required by the Franchise Agreement, up to the balance in the FF&E Reserve. No expenditures will be made in excess of said balance without the prior written approval of Owner. Manager will follow the applicable approved FF&E Estimate, but shall be entitled to depart therefrom (but not exceeding the lesser of (i) 10% of the applicable approved FF&E Estimate and (ii) the Reserve balance), in its reasonable discretion, provided that (a) such departures from the approved FF&E Estimate result from circumstances which require prompt repair and/or replacement (in which event Manager shall notify Owner); and (b) Manager submits to Owner a revised FF&E Estimate setting forth and explaining such departures. At the end of each Fiscal Year, any amounts then remaining in the Reserve shall be carried forward to the next Fiscal Year. Any Owner interference with the expenditure by Manager of funds from the FF&E Reserve pursuant to this Section 5.02, if such expenditure is in accordance with the terms of this Section 5.02 (including without limitation, interference resulting from (i) any Litigation involving the Owner or the Hotel, or (ii) a Foreclosure) shall constitute an Event of Default by Owner under Section 9.01. Proceeds from the sale of FF&E no longer necessary to the operation of the Hotel shall be added to the FF&E Reserve. The FF&E Reserve will be kept in an interest-bearing account, and any interest which accrues thereon shall be retained in the FF&E Reserve. Neither (1) proceeds from the disposition of FF&E, nor (2) interest which accrues on amounts held in the FF&E Reserve, shall (a) result in any reduction in the required transfers to the FF&E Reserve set forth in subsection B above, nor (b) be included in Gross Revenues. E. As the Hotel ages, the percentages of Gross Revenues which are set forth in Section 5.02.B may not be sufficient to keep the FF&E Reserve at the levels necessary to make the replacements, renewals, and additions to the FF&E of the Hotel, or to make the Special Capital Expenditures, which are required to maintain the Hotel in accordance with the requirements of this Agreement and the Franchise Agreement. If the FF&E Estimate prepared in good faith by Manager exceeds the available funds in the FF&E Reserve, Owner shall elect one or the other of the following two (2) alternatives: 1. to agree in writing to increase the annual percentage in Section 5.02.B to provide the additional funds required and such increases shall be treated as Owner’s Additional Capital Investment and not as a Deduction, or 2. to make a lump sum contribution to the FF&E Reserve in the necessary amount in which event, such contribution shall be treated as an Owner’s Additional Capital Investment. A failure or refusal by Owner to either agree in writing to Section 5.02.E.1 above or provide the additional funds required in accordance with Section 5.02.E.2 above within sixty (60) days after Manager’s request therefor shall be deemed an election by Owner to opt for the funding mechanism in Section 5.02.E.1.

FF&E Reserve. A. Submanager (a) Tenant shall, or Tenant shall cause Manager to, establish a reserve account (the "FF&E Reserve"), in a bank or similar institution approved by Landlord and reasonably acceptable to both Submanager Tenant and Primary Manager, to cover the cost of: : (i) replacementsReplacements, renewals and additions to the FF&E at the Hotel; and and (ii) Special Routine Capital Expenditures. Withdrawals . (b) For each Accounting Period during the period from the FF&E Reserve Commencement Date to _________________, Tenant shall be made solely by representatives of Submanager whose signatures have been authorized. Primary cause Manager covenants that, as of the Take-Over Date, the dollar amount in the FF&E Reserve shall be no less than the Initial FF&E Reserve Balance. If Primary Manager fails to provide the dollar amount in the FF&E Reserve in an amount no less than the Initial FF&E Reserve Balance as required under this Section 5.02.A, Submanager shall have the right (after first giving Primary Manager ten (10) days written notice thereof) to deduct the required amounts from Gross Revenues. In addition, Primary Manager covenants that the Five-Year Plan attached hereto as Exhibit "B-1" shall be implemented, subject to any mutually-approved changes, as Special Capital Expenditures from the FF&E Reserve. B. During the Term of this Agreement, subject to the provisions of subsection E, below, Submanager shall transfer into the FF&E Reserve an amount set forth on Exhibit "A-1" (except equal to _____________ of Gross Revenues; for each Accounting Period during the extent that period from _______________ through _______________, Tenant shall cause Manager to transfer into the Five-Year Plan sets forth different percentage(s) applicable FF&E Reserve an amount equal to certain periods in ______________ of Gross Revenues; for each Accounting Period within the period commencing _________________ through the end of the Term, in which event such percentage(s) in subject to the Five-Year Plan provisions of Section 5.2(e), below, Tenant shall be controlling during such periods) cause Manager to transfer into the FF&E Reserve an amount equal to ____________ of Gross Revenues for each such Accounting Period. Transfers into the FF&E Reserve shall be made at the time of each interim accounting described in Section 4.01 17.2 hereof. All amounts transferred into the FF&E Reserve pursuant to this Section 5.02.B 5.2(b) shall be paid from Gross Revenues as Deductions. C. Submanager (c) Tenant shall, or Tenant shall cause Manager to, prepare an annual estimate (the "FF&E Estimate") of the expenditures necessary for (1i) replacements, renewals and additions to the FF&E of the Hotel, and (2ii) Special Routine Capital Expenditures, during the ensuing Fiscal Year and shall deliver the FF&E Estimate to Primary Manager Landlord for its approval (which shall not be unreasonably withheld or delayed)review and comment, at the same time as Submanager Manager submits the Proposed Business Plan preliminary business plan described in SectionSection 17.5. The FF&E Estimate shall also indicate the estimated time schedule for making such replacements, renewals, and additions, a reasonable description of items required to be replaced, the number of units to be replaced, unit costs and costs in the aggregate, together with such additional information as Landlord shall reasonably request, to the extent then known by Manager. Tenant shall use good faith efforts to ensure that Manager shall consider in good faith Landlord's comments regarding the FF&E Estimate, provided that Landlord's comments are consistent with maintaining System Standards and acknowledging that FF&E replacements occur at regular cycles for soft goods and case goods, which cycles are incorporated in System Standards. (d) Tenant shall, or Tenant shall cause Manager to, (endeavoring in good faith to comply with the applicable FF&E Estimate, unless there has been a change in circumstances) from time to time make such (i) replacements, renewals and additions to the FF&E of the Hotel, and (ii) Routine Capital Expenditures, as Tenant deems necessary, up to the balance in the FF&E Reserve. No expenditures will be made in excess of said balance without the approval of Landlord. In addition, Tenant shall not, and Tenant shall ensure that Manager shall not, without Landlord's approval, make any expenditures from the FF&E Reserve that, in the aggregate, exceed the total aggregate amount of expenditures set forth in the then-applicable FF&E Estimate; provided, however, that Tenant or Manager shall be authorized to take appropriate remedial action (including making any necessary expenditures from the FF&E Reserve above the total aggregate amount set forth in the then-applicable FF&E Estimate), without receiving Landlord's prior approval, to remedy or respond to any of the Emergency Requirements (provided further that Tenant shall notify Landlord of any such remedial action that requires more than a de minimus expenditure of funds from the FF&E Reserve). At the end of each Fiscal Year, any amounts remaining in the FF&E Reserve shall be carried forward to the next Fiscal Year. Proceeds from the sale of FF&E no longer necessary to the operation of the Hotel shall be added to the FF&E Reserve. The FF&E Reserve will be kept in an interest-bearing account, and any interest which accrues thereon shall be retained in the FF&E Reserve. Neither (iii) proceeds from the disposition of FF&E, nor (iv) interest which accrues on amounts held in the FF&E Reserve, shall (1) result in any reduction in the required transfers to the FF&E Reserve set forth in Section 5.2(b) above, or (2) be included in Gross Revenues. (e) As the Hotel ages, the percentages of Gross Revenues that are set forth in Section 5.2(b) may not be sufficient to keep the FF&E Reserve at the levels necessary to make the alterations, improvements, replacements, renewals, and additions to the FF&E of the Hotel, or to make the Routine Capital Expenditures, that are required to maintain the Hotel in accordance with the System Standards. If Tenant reasonably believes that the funding of the FF&E Reserve with respect to the following two (2) Fiscal Years will not be adequate to maintain the Hotel in accordance with System Standards, Tenant shall so notify Landlord. Tenant may only request additional funding into the FF&E Reserve for a period not to exceed two (2) Fiscal Years; provided, further, however, that Tenant may submit such notices, pursuant to the procedures set forth herein, for subsequent periods (including consecutive periods) of two (2)