Common use of Financial Performance Clause in Contracts

Financial Performance. The Borrower will maintain the following financial covenants: A. During the term of the Loan, the Borrower shall maintain a minimum Global Debt Service Coverage Ratio – Annual Operations for Wilmington and St. Petersburg (“GDSCR”) of 1.25 to 1.0, to be computed and tested annually commencing as of December 31, 2024 and based on the audited financial statements required to be submitted. If the Borrower fails to meet the GDSCR covenant, it will have a period of thirty (30) days to cure same by providing the Bank with cash collateral into a Debt Service Reserve account at the Bank in an amount equal to the shortfall in annual global net operating income and the net operating income necessary to achieve the required GDSCR for such annual period. The cash collateral shall remain on deposit with the Bank until the required DSCR has been met at the time of the next annual test, at which time any cash collateral remaining in the account will be returned to the Borrower. B. The Borrower will maintain the Bank as its primary depository bank for the Hotel and will open and maintain at the Bank a Mortgaged Premises operating account, and capital expenditure or other reserve, escrow and real estate tax accounts associated with the Mortgaged Premises and the Hotel. C. The Guarantor shall maintain a minimum Net Worth (defined as total assets minus total liabilities, both as determined in accordance with GAAP) of $25,000,000 and evidence minimum liquidity of $750,000 at all times, as evidenced by the annual the annual 10-K financial statements of the Guarantor. D. The Borrower shall escrow for real estate taxes by depositing in an escrow account at the Bank one-twelfth (1/12) of the estimated annual real estate taxes on each Payment Date. E. The Borrower shall escrow an amount equal to 4% of gross income in a FF&E reserve account at the Bank on each Payment Date. The 4% reserve shall be calculated based on the actual gross income generated at the Hotel over the previous calendar year. The Bank shall allow Borrower to transfer such amounts required by Borrower from time to time to B▇▇▇▇▇▇▇’s operating account, provided that the Borrower provides reasonable evidence to Bank for FF & E improvement costs to the Hotel, if requested by Bank in writing. F. The Borrower will not incur any additional debt or permit any junior liens on the Collateral, except as set forth herein without prior written approval of the Bank. G. Until the Loan shall have been paid in full, the Borrower shall not, without the Bank’s written consent ,which consent will not be unreasonably withheld directly or indirectly, lend funds to, or make payments on account of, or transfer any collateral for any part of, any loan or indebtedness ("Affiliated Creditor Debt") to its members, managers, officers, Subsidiaries or Affiliates, (hereinafter collectively referred to as the "Affiliated Creditors"), and neither the Borrower nor Affiliated Creditors shall otherwise take or permit any action prejudicial to or inconsistent with the Bank's priority position over the Affiliated Creditors created by this Agreement. Scheduled payments of principal and interest pre-approved by the Bank may be made as long as no Event of Default under Loan Documents has occurred but shall be subordinate in all respects to the Loan. Should any payment on account of or any Collateral for any part of Affiliated Creditor Debt be received by the Affiliated Creditors except as allowed herein, such payment or collateral shall be delivered forthwith to the Bank by the recipient for application to the Loan. Until so delivered, any such payment or collateral shall be held by the recipient in trust for the Bank and shall not be commingled with other funds or property of the recipient.