Capital Improvements; Reserve Funds. (a) Each year, as part of the Annual Plan and Operating Budget delivered to Owner, Manager shall propose and prepare a budget for expected and reasonably necessary Capital Improvements and Replacements (if any are required or contemplated, including the design and specifics thereof). If Owner approves such Capital Improvements and Replacements (including a budget therefor), Manager shall use its commercially reasonable efforts to make all such Capital Improvements and Replacements to the extent reasonably required or prudent in such applicable year and, in furtherance thereof but subject to Section 7.2(c) below, Manager is authorized to make and enter into in the name of, and for the account of, Owner, all such contracts and agreements as in Manager’s opinion are reasonably necessary for approved Capital Improvements and Replacements. All such Capital Improvements and Replacements approved by Owner shall, to the extent reasonably feasible, be made in a manner that does not unreasonably interfere with Manager’s operation of the Managed Properties in compliance with the Operating Standards and which will minimize any adverse impact on the normal operation of the Managed Properties. (b) Manager shall establish a Reserve Fund for each Managed Property to fund Capital Improvements and Replacements for such Managed Property. During the Term, Manager shall, to the extent funds are available following the disbursement of funds in accordance with the Disbursement Priority Schedule set forth on Exhibit “D”, set aside concurrently with the delivery of the Interim Statement with respect to any Fiscal Month an amount equal to three percent (3%) of Gross Revenues for each such Fiscal Month for each Managed Property, which amounts shall be deposited into the Reserve Fund for each Managed Property (excluding, however, any Undeveloped Property) and spent only in accordance with the Approved Annual Plan and Operating Budget. In the event there is a balance in the Reserve Fund at the end of any Fiscal Year, such balance shall be carried over to the next Fiscal Year; provided that the Reserve Fund shall not exceed six percent (6%) of Gross Revenue for the immediately preceding twelve (12) Fiscal Months (the “Reserve Cap”) and Manager shall not deposit or otherwise withhold any amounts in excess of the Reserve Cap for the respective Managed Property’s Reserve Fund. Notwithstanding the foregoing, this Section 7.2(b) shall be waived and Manager shall not deposit or otherwise withhold any amounts as a Reserve Fund so long as (x) the Credit Agreement remains outstanding and the combination of unrestricted cash and the undrawn amount of revolving loans that may be borrowed under the Credit Agreement are not less than the amounts required for the Capital Improvements and Replacements projected to be spent in the next Fiscal Month as set forth in the Approved Annual Plan and Operating Budget so long as there are no uncured defaults or events of default thereunder continuing under the Credit Agreement (or that would be caused by the incurrence of such indebtedness and the application of the proceeds of such borrowings for the purchase of Capital Improvements and Replacements), or (y) Manager otherwise has unrestricted funds and/or the ability to borrow under lines of credit readily accessible to Owner (under which there are no uncured defaults or events of default thereunder continuing, or that would be caused by the incurrence of such indebtedness and the application of the proceeds of such borrowings for the purchase of Capital Improvements and Replacements), in an amount equal to or greater than the difference between the current amounts held in the Reserve Fund and the amount that would have otherwise been required to be held in the Reserve Fund pursuant to this Section 7.2(b) (e.g., three percent (3%) of Gross Revenue for the immediately preceding twelve (12) Fiscal Months, as may be increased to an aggregate maximum of the Reserve Cap in accordance with this Section 7.2(b)). For avoidance of doubt, the Reserve Funds shall be in addition to and not in lieu of the Working Capital Requirements required under Section 4.1. So long as amounts remain outstanding under the Credit Agreement and the commitments thereunder have not been terminated, Manager shall cause the Reserve Fund to be subject to a control agreement in accordance with the requirements of the Credit Agreement. (c) Any expenditures for Capital Improvements and Replacements during any Fiscal Year which have been budgeted in the Approved Annual Plan and Operating Budget or otherwise approved by Owner in writing may be made by Manager without additional Owner approval, subject to the applicable limitations set forth in Section 2.3 (including, without limitation, the delivery to Owner of plans and specifications prior to the commencement of any Capital Improvements and Replacements that require material Capital Expenditures), and, to the extent funds are available, such payments shall be made by Manager from the Reserve Funds; provided that Owner shall have the right to approve the plans and/or specifications (if any are required or contemplated), vendors and vendor contracts to be used with respect to the Capital Improvements and Replacements that require material Capital Expenditures. (d) To the extent the Reserve Funds are insufficient at a particular time, or to the extent the Reserve Funds plus anticipated contributions for the existing Fiscal Year is less than the amount required by the Approved Annual Plan and Operating Budget for the ensuing Fiscal Year, then additional expenditures shall be subject to the prior written approval of Owner (which approval may be granted or withheld in Owner’s sole and absolute discretion) and, if such expenditures are approved, Owner shall determine the source of funds for such Capital Improvements and Replacements. (e) Manager shall not be separately compensated for any technical services in connection with supervising, consulting and/or completing any Capital Improvements and Replacements at the Managed Properties and Manager shall provide such services, if applicable, as part of Manager’s services hereunder (it being the intent of the parties that the Management Fees are intended to cover any such technical services); provided, however, Manager’s duties hereunder shall not extend to architectural planning, construction management and similar technical services for capital improvements for new buildings, expansions to existing buildings or any major renovations to accomplish a comprehensive repositioning of a Managed Property that has been approved by Owner.
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Samples: Management Agreement (Station Casinos LLC), Management Agreement (Station Casinos LLC)
Capital Improvements; Reserve Funds. (a) Each year, as part of the Annual Plan and Operating Budget delivered to Owner, Manager shall propose and prepare a budget for expected and reasonably necessary Capital Improvements and Replacements (if any are required or contemplated, including the design and specifics thereof). If Owner approves such Capital Improvements and Replacements (including a budget therefor), Manager shall use its commercially reasonable efforts to make all such Capital Improvements and Replacements to the extent reasonably required or prudent in such applicable year and, in furtherance thereof but subject to Section 7.2(c) below, Manager is authorized to make and enter into in the name of, and for the account of, Owner, all such contracts and agreements as in Manager’s opinion are reasonably necessary for approved Capital Improvements and Replacements. All such Capital Improvements and Replacements approved by Owner shall, to the extent reasonably feasible, be made in a manner that does not unreasonably interfere with Manager’s operation of the Managed Properties in compliance with the Operating Standards and which will minimize any adverse impact on the normal operation of the Managed Properties.
(b) Manager shall establish a Reserve Fund for each Managed Property to fund Capital Improvements and Replacements for such Managed Property. During the Term, Manager shall, to the extent funds are available following the disbursement of funds in accordance with the Disbursement Priority Schedule set forth on Exhibit “DA”, set aside concurrently with the delivery of the Interim Statement with respect to any Fiscal Month an amount equal to three percent (3%) of Gross Revenues for each such Fiscal Month for each Managed Property, which amounts shall be deposited into the Reserve Fund for each Managed Property (excluding, however, any Undeveloped Property) and spent only in accordance with the Approved Annual Plan and Operating Budget. In the event there is a balance in the Reserve Fund at the end of any Fiscal Year, such balance shall be carried over to the next Fiscal Year; provided that the Reserve Fund shall not exceed six percent (6%) of Gross Revenue for the immediately preceding twelve (12) Fiscal Months (the “Reserve Cap”) and Manager shall not deposit or otherwise withhold any amounts in excess of the Reserve Cap for the respective Managed Property’s Reserve Fund. Notwithstanding the foregoing, this Section 7.2(b) shall be waived and Manager shall not deposit or otherwise withhold any amounts as a Reserve Fund so long as (x) the Propco Credit Agreement remains outstanding and the combination of unrestricted cash and the undrawn amount of revolving loans that may be borrowed under the Propco Credit Agreement are not less than the amounts required for the Capital Improvements and Replacements projected to be spent in the next Fiscal Month as set forth in the Approved Annual Plan and Operating Budget so long as there are no uncured defaults or events of default thereunder continuing under the Propco Credit Agreement (or that would be caused by the incurrence of such indebtedness and the application of the proceeds of such borrowings for the purchase of Capital Improvements and Replacements), or (y) Manager otherwise has unrestricted funds and/or the ability to borrow under lines of credit readily accessible to Owner (under which there are no uncured defaults or events of default thereunder continuing, or that would be caused by the incurrence of such indebtedness and the application of the proceeds of such borrowings for the purchase of Capital Improvements and Replacements), in an amount equal to or greater than the difference between the current amounts held in the Reserve Fund and the amount that would have otherwise been required to be held in the Reserve Fund pursuant to this Section 7.2(b) (e.g., three percent (3%) of Gross Revenue for the immediately preceding twelve (12) Fiscal Months, as may be increased to an aggregate maximum of the Reserve Cap in accordance with this Section 7.2(b)). For avoidance of doubt, the Reserve Funds shall be in addition to and not in lieu of the Working Capital Requirements required under Section 4.1. So long as the amounts remain outstanding under the Propco Credit Agreement and the commitments thereunder have not been terminated, Manager shall cause the Reserve Fund to be subject to a control agreement in accordance with the requirements of the Propco Credit Agreement.
(c) Any expenditures for Capital Improvements and Replacements during any Fiscal Year which have been budgeted in the Approved Annual Plan and Operating Budget or otherwise approved by Owner in writing may be made by Manager without additional Owner approval, subject to the applicable limitations set forth in Section 2.3 (including, without limitation, the delivery to Owner of plans and specifications prior to the commencement of any Capital Improvements and Replacements that require material Capital Expenditures), and, to the extent funds are available, such payments shall be made by Manager from the Reserve Funds; provided that Owner shall have the right to approve the plans and/or specifications (if any are required or contemplated), vendors and vendor contracts to be used with respect to the Capital Improvements and Replacements that require material Capital Expenditures.
(d) To the extent the Reserve Funds are insufficient at a particular time, or to the extent the Reserve Funds plus anticipated contributions for the existing Fiscal Year is are less than the amount required by the Approved Annual Plan and Operating Budget for the ensuing Fiscal Year, then additional expenditures shall be subject to the prior written approval of Owner (which approval may be granted or withheld in Owner’s sole and absolute discretion) and, if such expenditures are approved, Owner shall determine the source of funds for such Capital Improvements and Replacements.
(e) Manager shall not be separately compensated for any technical services in connection with supervising, consulting and/or completing any Capital Improvements and Replacements at the Managed Properties and Manager shall provide such services, if applicable, as part of Manager’s services hereunder (it being the intent of the parties that the Management Fees are intended to cover any such technical services); provided, however, Manager’s duties hereunder shall not extend to architectural planning, construction management and similar technical services for capital improvements for new buildings, expansions to existing buildings or any major renovations to accomplish a comprehensive repositioning of a Managed Property that has been approved by Owner.
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Capital Improvements; Reserve Funds. (a) Each year, as part of the Annual Plan and Operating Budget delivered to Owner, Manager shall propose and prepare a budget for expected and reasonably necessary Capital Improvements and Replacements (if any are required or contemplated, including the design and specifics thereof). If Owner approves such Capital Improvements and Replacements (including a budget therefor), Manager shall use its commercially reasonable efforts to make all such Capital Improvements and Replacements to the extent reasonably required or prudent in such applicable year and, in furtherance thereof but subject to Section 7.2(c) below, Manager is authorized to make and enter into in the name of, and for the account of, Owner, all such contracts and agreements as in Manager’s opinion are reasonably necessary for approved Capital Improvements and Replacements. All such Capital Improvements and Replacements approved by Owner shall, to the extent reasonably feasible, be made in a manner that does not unreasonably interfere with Manager’s operation of the Managed Properties in compliance with the Operating Standards and which will minimize any adverse impact on the normal operation of the Managed Properties.
(b) Manager shall establish a Reserve Fund for each Managed Property to fund Capital Improvements and Replacements for such Managed Property. During the Term, Manager shall, to the extent funds are available following the disbursement of funds in accordance with the Disbursement Priority Schedule set forth on Exhibit “D”, set aside concurrently with the delivery of the Interim Statement with respect to any Fiscal Month an amount equal to three percent (3%) of Gross Revenues for each such Fiscal Month for each Managed Property, which amounts shall be deposited into the Reserve Fund for each Managed Property (excluding, however, any Undeveloped Property) and spent only in accordance with the Approved Annual Plan and Operating Budget. In the event there is a balance in the Reserve Fund at the end of any Fiscal Year, such balance shall be carried over to the next Fiscal Year; provided that the Reserve Fund shall not exceed six percent (6%) of Gross Revenue for the immediately preceding twelve (12) Fiscal Months (the “Reserve Cap”) and Manager shall not deposit or otherwise withhold any amounts in excess of the Reserve Cap for the respective Managed Property’s Reserve Fund. Notwithstanding the foregoing, this Section 7.2(b) shall be waived and Manager shall not deposit or otherwise withhold any amounts as a Reserve Fund so long as (x) the Opco Credit Agreement remains outstanding and the combination of unrestricted cash and the undrawn amount of revolving loans that may be borrowed under the Opco Credit Agreement are not less than the amounts required for the Capital Improvements and Replacements projected to be spent in the next Fiscal Month as set forth in the Approved Annual Plan and Operating Budget so long as there are no uncured defaults or events of default thereunder continuing under the Opco Credit Agreement (or that would be caused by the incurrence of such indebtedness and the application of the proceeds of such borrowings for the purchase of Capital Improvements and Replacements), or (y) Manager otherwise has unrestricted funds and/or the ability to borrow under lines of credit readily accessible to Owner (under which there are no uncured defaults or events of default thereunder continuing, or that would be caused by the incurrence of such indebtedness and the application of the proceeds of such borrowings for the purchase of Capital Improvements and Replacements), in an amount equal to or greater than the difference between the current amounts held in the Reserve Fund and the amount that would have otherwise been required to be held in the Reserve Fund pursuant to this Section 7.2(b) (e.g., three percent (3%) of Gross Revenue for the immediately preceding twelve (12) Fiscal Months, as may be increased to an aggregate maximum of the Reserve Cap in accordance with this Section 7.2(b)). For avoidance of doubt, the Reserve Funds shall be in addition to and not in lieu of the Working Capital Requirements required under Section 4.1. So long as amounts remain outstanding under the Opco Credit Agreement and the commitments thereunder have not been terminated, Manager shall cause the Reserve Fund to be subject to a control agreement in accordance with the requirements of the Opco Credit Agreement.
(c) Any expenditures for Capital Improvements and Replacements during any Fiscal Year which have been budgeted in the Approved Annual Plan and Operating Budget or otherwise approved by Owner in writing may be made by Manager without additional Owner approval, subject to the applicable limitations set forth in Section 2.3 (including, without limitation, the delivery to Owner of plans and specifications prior to the commencement of any Capital Improvements and Replacements that require material Capital Expenditures), and, to the extent funds are available, such payments shall be made by Manager from the Reserve Funds; provided that Owner shall have the right to approve the plans and/or specifications (if any are required or contemplated), vendors and vendor contracts to be used with respect to the Capital Improvements and Replacements that require material Capital Expenditures.
(d) To the extent the Reserve Funds are insufficient at a particular time, or to the extent the Reserve Funds plus anticipated contributions for the existing Fiscal Year is less than the amount required by the Approved Annual Plan and Operating Budget for the ensuing Fiscal Year, then additional expenditures shall be subject to the prior written approval of Owner (which approval may be granted or withheld in Owner’s sole and absolute discretion) and, if such expenditures are approved, Owner shall determine the source of funds for such Capital Improvements and Replacements.
(e) Manager shall not be separately compensated for any technical services in connection with supervising, consulting and/or completing any Capital Improvements and Replacements at the Managed Properties and Manager shall provide such services, if applicable, as part of Manager’s services hereunder (it being the intent of the parties that the Management Fees are intended to cover any such technical services); provided, however, Manager’s duties hereunder shall not extend to architectural planning, construction management and similar technical services for capital improvements for new buildings, expansions to existing buildings or any major renovations to accomplish a comprehensive repositioning of a Managed Property that has been approved by Owner.
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