Common use of FF&E Reserve Clause in Contracts

FF&E Reserve. Innisfree will establish for and on behalf of the Owners a reserve in the following amounts: Amount to be Reserved Each Operating Year Expressed Operating Year as a Percentage of Gross Revenue in that Year 1 1% 2 2% 3 3% 4 4% 5 and subsequent 5% Operating Years The FF&E Reserve will be held by Innisfree, for and on behalf of the Owners, in a separate account from the Hotel Bank Account, as a reserve for Capital Expenditures for the repair and replacement of the Hotel Premises and for the repair and replacement of any Furniture, Fixtures and Equipment in accordance with Section 9.3. Innisfree will, for and on behalf of the Owners, keep the Hotel Premises and the Furniture, Fixtures and Equipment in substantially the same condition, quality and scope they were in as of the Commencement Date, normal wear and tear excepted, and the Owners hereby authorize Innisfree to use the FF&E Reserve only for such purposes. Innisfree will be under no obligation to use its own funds for such purpose. The Owners acknowledge and agree that the FF&E Reserve will be for the benefit of all of the Units collectively and not for each individual Unit separately and that the cost of maintaining and replacing the Furniture, Fixtures and Equipment will be shared by all of the Owners during the Term in accordance with their respective Percentage Interests. The FF&E Reserve, at all times during the Term and after termination or expiry of this Agreement, shall remain the property of the Owners.