Common use of Renovation Reserves Clause in Contracts

Renovation Reserves. (a) The Loan Parties shall provide to the Administrative Agent and Diligence Agent a budget and schedule (the “Proposed Scheduled Renovation Work”) describing the Renovation Expenses for Non-Stabilized Properties necessary in the Borrowers’ good faith determination to cause such Non-Stabilized Properties to be renovated, improved, repaired and completed so as to satisfy the Renovation Standards (provided that, with respect to any Non-Stabilized Property which cannot be accessed in any commercially reasonable manner by the Loan Parties, the Manager and its agents and representatives due to a holdover occupancy, the Loan Parties may provide an estimate of such Renovation Expenses as determined by the Borrowers in good faith). In connection with obtaining the BPO Value for any Property or Properties, the Administrative Agent will cause the Diligence Agent to inspect such Non-Stabilized Properties and review the Proposed Scheduled Renovation Work to determine if the proposed schedule of repairs, installations, renovations, rehabilitation and other capital expenditures and the amounts budgeted thereto are sufficient to bring such Non-Stabilized Properties into compliance with the Renovation Standards. After the Diligence Agent completes its evaluation, the Administrative Agent may propose modifications to the Proposed Scheduled Renovation Work for such Non-Stabilized Properties and upon revision of the Proposed Scheduled Renovation Work in a manner agreed to by both the Borrower Representative and the Administrative Agent, such revised schedule shall constitute the “Scheduled Renovation Work” for such Non-Stabilized Property used to establish the amount of Renovation Reserves (which shall be an amount equal to 110% of the greater of (x) the amounts budgeted in the Proposed Scheduled Renovation Work and (y) the amounts specified in the Scheduled Renovation Work (the “Renovation Reserves”), subject to any adjustments pursuant to Section 6.02(d) in the case of any Conformed Property). At the time of disbursement of the Property Loan with respect to any Financed Property, an amount equal to the Funded Renovation Reserves Percentage of the Renovation Reserves (the “Funded Renovation Reserves”) with respect to such Financed Property shall be deposited by Borrowers with the Paying Agent (or remitted from the proceeds of a related Property Loan on such Property pursuant to Section 2.02(c)) for transfer to the Renovation Reserves Account. The Loan Parties shall promptly perform all of the Scheduled Renovation Work on Financed Properties constituting Non-Stabilized Properties (i) in compliance with all applicable Legal Requirements in all material respects and (ii) in a Lien-free, good and workmanlike manner, and shall promptly notify the Administrative Agent and the Diligence Agent when the Scheduled Renovation Work on a Property has been completed. The Administrative Agent or the Majority Lenders shall cause the Diligence Agent to inspect a sample of up to ten percent (10%) by number of each Sample Pool for purposes of verifying compliance with the Renovation Standards, such sample to be selected by the Diligence Agent. In any calendar month, the Diligence Agent may begin the selection process and the performance of the inspections based on a report received from the Borrower Representative on the fifteenth (15th) day of such calendar month. If the Diligence Agent is not able to access any such Financed Property selected for inspection, the Administrative Agent shall select other Financed Properties to be inspected, such that such sample is comprised of up to 10% of the related Sample Pool (such sample, the “Selected Financed Property Sample”). The Borrowers will cooperate reasonably to enable the Diligence Agent to inspect such Financed Properties before they become occupied. If any such sample shows that any of such sampled Financed Properties are not then in compliance with the Renovation Standards, the Administrative Agent or the Majority Lenders may cause the Diligence Agent to subsequently inspect all or a larger sample of the Financed Properties in the Sample Pool to confirm compliance for such Financed Properties with the Renovation Standards. If, in the aggregate, greater than 5% of all sampled Financed Properties (with a minimum of two hundred (200) Financed Properties) are not then in compliance with the Renovation Standards in all material respects, the Administrative Agent or the Majority Lenders may cause the Diligence Agent to inspect all or a larger sample of all Financed Properties to confirm such compliance with the Renovation Standards going forward. Upon the occurrence and during the continuance of an Event of Default, the Administrative Agent may, and at the direction of the Majority Lenders or pursuant to a Thirty-Three Percent Lender Instruction shall, instruct the Paying Agent in writing to remit all or any portion of the Renovation Reserves from the Renovation Reserves Account and apply such funds either to (i) the costs of completion of the Scheduled Renovation Work of the Properties or (ii) the Allocated Loan Amount in respect of each Financed Property, pro rata to each Lender, in such proportion as between items (i) and (ii) above as the Administrative Agent may determine in its sole discretion. The right to instruct the Paying Agent to remit and apply Renovation Reserves in accordance with the foregoing shall be in addition to all other rights and remedies provided to the Administrative Agent, the Collateral Agent or any Lenders under this Agreement and the other Loan Documents.

Renovation Reserves. (a) The Loan Parties shall provide to the Administrative Agent and Diligence Agent a budget and schedule (the “Proposed Scheduled Renovation Work”) describing the Renovation Expenses for Non-Stabilized Properties and Carry-Over Properties necessary in the Borrowers’ good faith determination to cause such Non-Stabilized Properties and Carry-Over Properties to be renovated, improved, repaired and completed so as to satisfy the Renovation Standards (provided that, with respect to any Non-Stabilized Property and Carry-Over Property which cannot be accessed in any commercially reasonable manner by the Loan Parties, the Manager and its agents and representatives due to a holdover occupancy, the Loan Parties may provide an estimate of such Renovation Expenses as determined by the Borrowers in good faith). In connection with obtaining the BPO Value for any Property or Properties, the Administrative Agent will cause the Diligence Agent to inspect such Non-Stabilized Properties and Carry-Over Properties and review the Proposed Scheduled Renovation Work to determine if the proposed schedule of repairs, installations, renovations, rehabilitation and other capital expenditures and the amounts budgeted thereto are sufficient to bring such Non-Stabilized Properties and Carry-Over Properties into compliance with the Renovation Standards. After the Diligence Agent completes its evaluation, the Administrative Agent may propose modifications to the Proposed Scheduled Renovation Work for such Non-Stabilized Properties or Carry-Over Properties and upon revision of the Proposed Scheduled Renovation Work in a manner agreed to by both the Borrower Representative and the Administrative Agent, such revised schedule shall constitute the “Scheduled Renovation Work” for such Non-Stabilized Property or Carry-Over Property used to establish the amount of Renovation Reserves (which shall be an amount equal to 110% of the greater of (x) the amounts budgeted in the Proposed Scheduled Renovation Work and (y) the amounts specified in the Scheduled Renovation Work Work, as such amounts may be modified with the consent of the Administrative Agent in consultation with the Diligence Agent, based upon the Actual Renovation Expenses (the “Renovation Reserves”), subject to any adjustments pursuant to Section 6.02(d) in the case of any Conformed Property). At the time of disbursement of the Property Loan with respect to any Financed Property, an amount equal to the Funded Renovation Reserves Percentage of the Renovation Reserves (the “Funded Renovation Reserves”) with respect to such Financed Property shall be deposited by Borrowers with the Paying Agent (or remitted from the proceeds of a related Property Loan on such Property pursuant to Section 2.02(c)) for transfer to the Renovation Reserves Account. The Loan Parties shall promptly perform all of the Scheduled Renovation Work on each Financed Properties constituting Property after disbursement of the related Property Loan (in the case of a Non-Stabilized Properties Property) or after the related Carry-Over Tenant shall have vacated such Financed Property (in the case of a Carry-Over Property) (i) in compliance with all applicable Legal Requirements in all material respects and (ii) in a Lien-free, good and workmanlike manner, and shall promptly notify the Administrative Agent and the Diligence Agent when the Scheduled Renovation Work on a Property has been completed. The Administrative Agent or the Majority Lenders shall cause the Diligence Agent to inspect a sample of up to ten percent (10%) by number of each Sample Pool for purposes of verifying compliance with the Renovation Standards, such sample to be selected by the Diligence Agent. In any calendar month, the Diligence Agent may begin the selection process and the performance of the inspections based on a report received from the Borrower Representative on the fifteenth (15th) day of such calendar month. If the Diligence Agent is not able to access any such Financed Property selected for inspection, the Administrative Agent shall select other Financed Properties to be inspected, such that such sample is comprised of up to 10% of the related Sample Pool (such sample, the “Selected Financed Property Sample”). The Borrowers will cooperate reasonably to enable the Diligence Agent to inspect such Financed Properties before they become occupied. If any such sample shows that any of such sampled Financed Properties are not then in compliance with the Renovation Standards, the Administrative Agent or the Majority Lenders may cause the Diligence Agent to subsequently inspect all or a larger sample of the Financed Properties in the Sample Pool to confirm compliance for such Financed Properties with the Renovation Standards. If, in the aggregate, greater than 5% of all sampled Financed Properties (with a minimum of two hundred twenty-five (20025) Financed Properties) are not then in compliance with the Renovation Standards in all material respects, the Administrative Agent or the Majority Lenders may cause the Diligence Agent to inspect all or a larger sample of all Financed Properties to confirm such compliance with the Renovation Standards going forward. Upon the occurrence and during the continuance of an Event of Default, the Administrative Agent may, and at the direction of the Majority Lenders or pursuant to a Thirty-Three Percent Lender Instruction shall, instruct the Paying Agent in writing to remit all or any portion of the Renovation Reserves from the Renovation Reserves Account and apply such funds either to (i) the costs of completion of the Scheduled Renovation Work of the Properties or (ii) the Allocated Loan Amount in respect of each Financed Property, pro rata to each Lender, in such proportion as between items (i) and (ii) above as the Administrative Agent may determine in its sole discretion. The right to instruct the Paying Agent to remit and apply Renovation Reserves in accordance with the foregoing shall be in addition to all other rights and remedies provided to the Administrative Agent, the Collateral Agent or any Lenders under this Agreement and the other Loan Documents.

Renovation Reserves. (a) The Loan Parties shall provide to the Administrative Agent and Diligence Agent a budget and schedule (the “Proposed Scheduled Renovation Work”) describing the Renovation Expenses for Non-Stabilized Properties necessary in the Borrowers’ good faith determination to cause such Non-Stabilized Properties to be renovated, improved, repaired and completed so as to satisfy the Renovation Standards (provided that, with respect to any Non-Stabilized Property which cannot be accessed in any commercially reasonable manner by the Loan Parties, the Manager and its agents and representatives due to a holdover occupancy, the Loan Parties may provide an estimate of such Renovation Expenses as determined by the Borrowers in good faith). In connection with obtaining the BPO Value for any Property or Properties, the Administrative Agent will cause the Diligence Agent to inspect such Non-Stabilized Properties and review the Proposed Scheduled Renovation Work to determine if the proposed schedule of repairs, installations, renovations, rehabilitation and other capital expenditures and the amounts budgeted thereto are sufficient to bring such Non-Stabilized Properties into compliance with the Renovation Standards. After the Diligence Agent completes its evaluation, the Administrative Agent may propose modifications to the Proposed Scheduled Renovation Work for such Non-Stabilized Properties and upon revision of the Proposed Scheduled Renovation Work in a manner agreed to by both the Borrower Representative and the Administrative Agent, such revised schedule shall constitute the “Scheduled Renovation Work” for such Non-Stabilized Property used to establish the amount of Renovation Reserves (which shall be an amount equal to 110% of the greater of (x) the amounts budgeted in the Proposed Scheduled Renovation Work and (y) the amounts specified in the Scheduled Renovation Work (the “Renovation Reserves”), subject to any adjustments pursuant to Section 6.02(d) in the case of any Conformed Property). At the time of disbursement of the Property Loan with respect to any Financed Property, an amount equal to the Funded Renovation Reserves Percentage of the Renovation Reserves (the “Funded Renovation Reserves”) with respect to such Financed Property shall be deposited by Borrowers with the Paying Agent (or remitted from the proceeds of a related Property Loan on such Property pursuant to Section 2.02(c)) for transfer to the Renovation Reserves Account. The Loan Parties shall promptly perform all of the Scheduled Renovation Work on Financed Properties constituting Non-Stabilized Properties (i) in compliance with all applicable Legal Requirements in all material respects and (ii) in a Lien-free, good and workmanlike manner, and shall promptly notify the Administrative Agent and the Diligence Agent when the Scheduled Renovation Work on a Property has been completed. The Administrative Agent or the Majority Lenders shall cause the Diligence Agent to inspect a sample of up to ten percent (10%) by number of each Sample Pool for purposes of verifying compliance with the Renovation Standards, such sample to be selected by the Diligence Agent. In any calendar month, the Diligence Agent may begin the selection process and the performance of the inspections based on a report received from the Borrower Representative on the fifteenth (15th) day of such calendar month. If the Diligence Agent is not able to access any such Financed Property selected for inspection, the Administrative Agent shall select other Financed Properties to be inspected, such that such sample is comprised of up to 10% of the related Sample Pool (such sample, the “Selected Financed Property Sample”). The Borrowers will cooperate reasonably to enable the Diligence Agent to inspect such Financed Properties before they become occupied. If any such sample shows that any of such sampled Financed Properties are not then in compliance with the Renovation Standards, the Administrative Agent or the Majority Lenders may cause the Diligence Agent to subsequently inspect all or a larger sample of the Financed Properties in the Sample Pool to confirm compliance for such Financed Properties with the Renovation Standards. If, in the aggregate, greater than 5% of all sampled Financed Properties (with a minimum of two hundred (200) Financed Properties) are not then in compliance with the Renovation Standards in all material respects, the Administrative Agent or the Majority Lenders may cause the Diligence Agent to inspect all or a larger sample of all Financed Properties to confirm such compliance with the Renovation Standards going forward. Upon the occurrence and during the continuance of an Event of Default, the Administrative Agent may, and at the direction of the Majority Lenders or pursuant to a Thirty-Three Percent Lender Instruction shall, instruct the Paying Agent in writing to remit all or any portion of the Renovation Reserves from the Renovation Reserves Account and apply such funds either to (i) the costs of completion of the Scheduled Renovation Work of the Properties or (ii) the Allocated Loan Amount in respect of each Financed Property, pro rata to each Lender, in such proportion as between items (i) and (ii) above as the Administrative Agent may determine in its sole discretion. The right to instruct the Paying Agent to remit and apply Renovation Reserves in accordance with the foregoing shall be in addition to all other rights and remedies provided to the Administrative Agent, the Collateral Agent or any Lenders under this Agreement and the other Loan Documents.