This excerpt taken from the FVE 8-K filed Jul 7, 2008.
5.1.2 FF&E Reserve. Certain Entities comprising Landlord have previously established the FF&E Reserve for each Senior Housing Property. Tenant shall, as Additional Charges, with respect to each Lease Year, or portion thereof, deposit, or cause to be deposited, the FF&E Reserve Payment into the FF&E Reserve for each Senior Housing Property, of which amounts shall be applied to (a) replacements and renewals to such Propertys furniture, furnishings, fixtures, soft goods, case goods, vehicles and equipment, but specifically excluding any fixed asset supplies or software, and (b) routine repairs and maintenance to the Facility located on such Property which are normally capitalized under GAAP, such as exterior and interior repainting, resurfacing building walls, floors, roofs and parking areas, and replacing folding walls and the like, but which are not major repairs, alterations, improvements, renewals or replacements to such Facilitys buildings structure or exterior façade or to its mechanical, electrical, heating, ventilating, air conditioning, plumbing or vertical transportation systems. Any additional funds required for repairs, maintenance, renovations and replacements to and at any Senior Housing Property in excess of those on deposit for such Property in the applicable FF&E Reserve shall be advanced in accordance with Section 5.1.3(b).
Tenant shall prepare, with respect to each Senior Housing Property, an estimate (the FF&E Estimate) of FF&E
Reserve expenditures necessary at such Property during the ensuing Fiscal Year, and shall submit such FF&E Estimate to Landlord, on or before December 1 of the preceding Lease Year, for its review and approval, which approval shall not be unreasonably withheld, delayed or conditioned. In the event that Landlord shall fail to respond within thirty (30) days after receipt of the FF&E Estimate, such FF&E Estimate shall be deemed approved by Landlord. Tenant shall, consistent with the FF&E Estimate approved by Landlord, from time to time make expenditures from the FF&E Reserve to be applied to the cost of repairs, maintenance, renovations and replacements to and at such Property in accordance with this Agreement provided that Tenant shall not materially deviate from the FF&E Estimate approved by Landlord without the prior approval of Landlord, which approval shall not be unreasonably withheld, delayed or conditioned, except in the case of emergency where immediate action is necessary to prevent imminent harm to person or property. All amounts from the FF&E Reserve shall be paid to Persons who are not Affiliated Persons of Tenant without mark-up or allocated internal costs by Tenant or its Affiliated Persons.
On and before September 30, 2002, funds in the FF&E Reserve and all property purchased with those funds shall be the property of Landlord and all FF&E Reserve Payments shall constitute Additional Charges. After September 30, 2002, funds deposited in the FF&E Reserve and all property purchased with those funds deposited after September 30, 2002 shall be the property of Tenant. Upon the expiration or sooner termination of this Agreement, funds in the FF&E Reserve and all property purchased with those funds during the Term shall be paid, granted and assigned to Landlord as Additional Charges.
Tenant agrees that it will, from time to time, execute such reasonable documentation as may be requested by Landlord and/or any Superior Mortgagee to assist Landlord and/or any Superior Mortgagee in establishing or perfecting the Superior Mortgagees security interest in Landlords residual interest in the funds which are in the FF&E Reserve; provided, however, that no such documentation shall contain any amendment to or modification of any of the provisions of this Agreement.