Common use of FF&E Reserves Clause in Contracts

FF&E Reserves. (a) Each Borrower shall deposit or cause to be deposited into its respective FF&E Reserve Account (which account is hereby pledged to Administrative Agent, for the benefit of Lenders, as additional collateral for the Loan, subject to the terms of the applicable Management Agreement and Management Agreement Assignment/Subordination), not later than the twentieth (20th) day of each month during the term of the Loan an amount equal to the greater of (i) four percent (4%) of Gross Operating Revenues for the Property for the previous month, and (ii) the amount required to be deposited into any FF&E reserve for such month pursuant to the terms of any applicable Franchise Agreement and/or Management Agreement (each an “FF&E Reserve”). (b) Provided no Default has occurred, funds may be withdrawn from the FF&E Reserve Account, and Borrower and Operating Lessee shall use such funds, solely for the payment of expenditures for FF&E and other capital items in accordance with the applicable Approved Capital Budget or otherwise in accordance with the CHI Management Agreement and Management Agreement Assignment/Subordination relating to the CHI Property. In addition, regardless of the existence of a Default, funds may be withdrawn from the FF&E Accounts if and to the extent permitted by the terms of the Management Agreement Assignment/Subordination applicable to the Property for the benefit of which the relevant FF&E Account is maintained. (c) The Administrative Agent shall have the right (to be exercised from time to time at its election) to audit each Borrower’s and Operating Lessee’s books and records in order to determine whether or not the funds withdrawn or disbursed from the FF&E Reserve Account have been spent only for the purpose for which they were withdrawn or disbursed. Borrower and Operating Lessee shall cooperate with Administrative Agent in connection with any such audit.

FF&E Reserves. (a) Each Borrower shall deposit or cause to be deposited into its respective FF&E Reserve Account (which account is hereby pledged to Administrative Agent, for the benefit of Lenders, as additional collateral for the Loan, subject to the terms of the applicable Management Agreement and Management Agreement Assignment/Subordination), not later than the twentieth (20th) day of each month during the term of the Loan an amount equal to the greater of (i) four percent (4%) of Gross Operating Revenues for the Property for the previous month, and (ii) the amount required to be deposited into any FF&E reserve for such month pursuant to the terms of any applicable Franchise Agreement and/or Management Agreement (each an “FF&E Reserve”). (b) Provided no Default has occurred, funds may be withdrawn from the FF&E Reserve Account, and Borrower and Operating Lessee shall use such funds, solely for the payment of expenditures for FF&E and other capital items in accordance with the applicable Approved Capital Budget or otherwise in accordance with the CHI Management Agreement, Franchise Agreement and and/or Management Agreement Assignment/Subordination relating to the CHI PropertySubordination. In addition, regardless of the existence of a Default, funds may be withdrawn from the FF&E Accounts Reserve Account if and to the extent permitted by the terms of the Management Agreement Assignment/Subordination applicable to the Property for the benefit of which the relevant FF&E Reserve Account is maintained. (c) The Administrative Agent shall have the right (to be exercised from time to time at its election) to audit each Borrower’s and 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. Borrower and Operating Lessee shall cooperate with Administrative Agent in connection with any such audit.