Common use of Capital Budgets Clause in Contracts

Capital Budgets. A. Attached hereto and made a part hereof as Exhibit D is the approved capital budget (the “Capital Budget”) for the first partial Fiscal Year until September 30, 2026. The Management Company, not less than ninety days before the commencement of the second and each subsequent Fiscal Year, must submit a proposed Capital Budget for the forthcoming Fiscal Year to the Asset Manager for review and the Owner for approval. All proposed Capital Budgets must include: (i) a recommended detailed capital budget for the ensuing full or partial Fiscal Year, as applicable, for Capital Replacements as required to operate the Hotel in accordance with the Operating and Maintenance Standards set forth in this Agreement; (ii) a summary five-year schedule of other recommended Capital Expenditures for the Hotel; (iii) a forecast detailing anticipated contributions to and proposed expenditures from the Special Account for Capital Expenditures, established in accordance with the provisions of Section 3.11.C; (iv) a description of any proposed Major Capital Projects to be made during the next Fiscal Year; (v) the commercial rationale for such Major Capital Projects; and (vi) a request for any additional funds that may be required to fund Capital Expenditures in excess of funds available in the Special Account for Capital Expenditures. B. The Capital Budget must include a description of existing FF&E targeted for sale or disposal by the Management Company; the Owner may choose to relocate or otherwise salvage historic furnishings no longer serviceable within the operation. The Owner will not unreasonably withhold or condition approval of the proposed Capital Budget with respect to Capital Replacements required pursuant to Applicable Laws or to maintain safety standards, but otherwise may approve or disapprove the remaining Capital Replacements and other Capital Expenditures in its sole discretion. The Owner and the Asset Manager will have the opportunity to discuss and revise the proposed Capital Budget with the Management Company. The Owner must either approve or disapprove and provide the Management Company specific written objections to the proposed Capital Budget within forty-five days after the Management Company’s submission of the proposed Capital Budget to the Owner. In the second and subsequent years, unless the Owner disapproves and provides written objections to the proposed Capital Budget, the Management Company may nonetheless make expenditures for Capital Replacements provided that the proposed Capital Budget for the year is consistent with the summary budget approved as part of the prior year’s Capital Budget. If the Owner does not approve the Capital Budget, then the Management Company may spend only those amounts for Capital Replacements required pursuant to Applicable Laws or to maintain safety standards at the Hotel. The Management Company may propose, for the Owner’s approval, revisions to any Capital Budget from time to time, as necessary to reflect any unpredicted changes, variables, or events, or to include significant, additional, unanticipated items of Capital Expenditures. The Management Company must present the Capital Budget in the form used by the Management Company at their other operations. Once approved by the Owner and reviewed by the Asset Manager the Management Company’s Capital Budget must include a comparison of actual expenditures against planned, a forecast detailing anticipated contributions to and proposed expenditures from the Special Account for Capital Expenditures (set forth in Section 3.11.C), analysis of fees paid to the Management Company, analysis of USALI to U.S. Standard General Ledger (USSGL) conversion (set forth in Section 3.19.B), analysis of the Management Company’s cash balance against Budget with proposed amount due to Owner, and an analysis of fraud, waste, and abuse risk. C. The Management Company must deposit five percent of Adjusted Gross Revenues monthly into the Special Account for Capital Expenditures established in accordance with Section 3.11.C. The Management Company may disburse from the Special Account for Capital Expenditures only the expenditures set out in an approved Capital Budget unless the Owner specifically approves other expenditures in writing. The Management Company will carry forward and retain in the Special Account for Capital Expenditures all amounts remaining in the Special Account for Capital Expenditures at the close of each Fiscal Year (including, without limitation, all interest earned thereon) until fully used as provided in this Agreement. The Management Company will deposit into the Special Account for Capital Expenditures all proceeds from the sale or other disposition of FF&E no longer needed for the operation of the Hotel. Prior to the sale or other disposition of such FF&E, the Management Company must submit a list of such FF&E to the Owner at least 30 days prior to the sale or other disposition to receive approval of the sale or other disposition from the Owner, in order to ensure compliance with Federal Property Management Regulations. The Owner may identify, including, but not limited to, historic furnishings no longer serviceable in the operation that the Owner chooses to relocate or otherwise salvage, as described in Section 3.14.A.

Capital Budgets. A. Attached hereto and made a part hereof as Exhibit D is the approved capital budget (the “Capital Budget”) for the first partial Fiscal Year until September 30, 2026. The Management Company, not less than ninety days before the commencement of the second and each subsequent Fiscal Year, must submit a proposed Capital Budget for the forthcoming Fiscal Year to the Asset Manager for review and the Owner for approval. All proposed Capital Budgets must include: (i) a recommended detailed capital budget for the ensuing full or partial Fiscal Year, as applicable, for Capital Replacements as required to operate the Hotel in accordance with the Operating and Maintenance Standards set forth in this Agreement; (ii) a summary five-year schedule of other recommended Capital Expenditures for the Hotel; (iii) a forecast detailing anticipated contributions to and proposed expenditures from the Special Account for Capital Expenditures, established in accordance with the provisions of Section 3.11.C; (iv) a description of any proposed Major Capital Projects to be made during the next Fiscal Year; (v) the commercial rationale for such Major Capital Projects; and (vi) a request for any additional funds that may be required to fund Capital Expenditures in excess of funds available in the Special Account for Capital Expenditures. B. The Capital Budget must include a description of existing FF&E targeted for sale or disposal by the Management Company; the Owner may choose to relocate or otherwise salvage historic furnishings no longer serviceable within the operation. The Owner will not unreasonably withhold or condition approval of the proposed Capital Budget with respect to Capital Replacements required pursuant to Applicable Laws or to maintain safety standards, but otherwise may approve or disapprove the remaining Capital Replacements and other Capital Expenditures in its sole discretion. The Owner and the Asset Manager will have the opportunity to discuss and revise the proposed Capital Budget with the Management Company. The Owner must either approve or disapprove and provide the Management Company specific written objections to the proposed Capital Budget within forty-five days after the Management Company’s submission of the proposed Capital Budget to the Owner. In the second and subsequent years, unless the Owner disapproves and provides written objections to the proposed Capital Budget, the Management Company may nonetheless make expenditures for Capital Replacements provided that the proposed Capital Budget for the year is consistent with the summary budget approved as part of the prior year’s Capital Budget. If the Owner does not approve the Capital Budget, then the Management Company may spend only those amounts for Capital Replacements required pursuant to Applicable Laws or to maintain safety standards at the Hotel. The Management Company may propose, for the Owner’s approval, revisions to any Capital Budget from time to time, as necessary to reflect any unpredicted changes, variables, or events, or to include significant, additional, unanticipated items of Capital Expenditures. The Management Company must present the Capital Budget in the form used by the Management Company at their other operations. Once approved by the Owner and reviewed by the Asset Manager the Management Company’s Capital Budget must include a comparison of actual expenditures against planned, a forecast detailing anticipated contributions to and proposed expenditures from the Special Account for Capital Expenditures (set forth in Section 3.11.C), analysis of fees paid to the Management Company, analysis of USALI to U.S. Standard General Ledger (USSGL) conversion (set forth in Section 3.19.B), analysis of the Management Company’s cash balance against Budget with proposed amount due to Owner, and an analysis of fraud, waste, and abuse risk. C. The Management Company must deposit five percent of Adjusted Gross Revenues monthly into the Special Account for Capital Expenditures established in accordance with Section 3.11.C. The Management Company may disburse from the Special Account for Capital Expenditures only the expenditures set out in an approved Capital Budget unless the Owner specifically approves other expenditures in writing. The Management Company will carry forward and retain in the Special Account for Capital Expenditures all amounts remaining in the Special Account for Capital Expenditures at the close of each Fiscal Year (including, without limitation, all interest earned thereon) until fully used as provided in this Agreement. The Management Company will deposit into the Special Account for Capital Expenditures all proceeds from the sale or other disposition of FF&E no longer needed for the operation of the Hotel. Prior to the sale or other disposition of such FF&E, the Management Company must submit a list of such FF&E to the Owner at least 30 days prior to the sale or other disposition to receive approval of the sale or other disposition from the Owner, in order to ensure compliance with Federal Property Management Regulations. The Owner may identify, including, but not limited to, historic furnishings no longer serviceable in the operation that the Owner chooses to relocate or otherwise salvage, as described in Section 3.14.A.3.14.B.

Capital Budgets. ‌ A. Attached hereto and made a part hereof as Exhibit D is the approved capital budget (the “Capital Budget”) for the first partial Fiscal Year until September 30December 1, 2026. The Management Company, not less than ninety days before prior to the commencement of the second and each subsequent Fiscal Year, must submit a proposed Capital Budget for the forthcoming Fiscal Year to the Asset Manager for review and the Owner for approval. All proposed Capital Budgets must include: : (i) a recommended detailed capital budget for the ensuing full or partial Fiscal Year, as applicablethe case may be, for replacement of FF&E as part of a Cyclical Upgrade or refresh to the Hotel, and ordinary Hotel capital replacement items (collectively, “Capital Replacements Replacements”) as required to operate the Hotel in accordance with the Operating and Maintenance Standards set forth in this Agreement; , (ii) a summary five-year schedule of other recommended Capital Expenditures for the Hotel; , (iii) a forecast detailing anticipated contributions to and proposed expenditures from the Special Account for Capital Expenditures, established in accordance with the provisions of Section 3.11.C; , (iv) a description of any proposed Major Capital Projects to be made during the next Fiscal Year; fiscal year; (v) the commercial rationale for such Major Capital Projects; and , and (vi) a request for any additional funds that may be required to fund Capital Expenditures in excess of funds available in the Special Account for Capital Expenditures. B. . The Capital Budget must include a description of existing FF&E targeted for sale or disposal by the Management Company; the Owner may choose to relocate or otherwise salvage historic furnishings no longer serviceable within the operation. The Owner will not unreasonably withhold or condition approval of the proposed Capital Budget with respect to Capital Replacements required pursuant to Applicable Laws or to maintain safety standards, but otherwise may approve or disapprove the remaining Capital Replacements and other Capital Expenditures in its sole discretion. The Owner and the Asset Manager will have the opportunity to discuss and revise the proposed Capital Budget with the Management Company. The Owner must either approve or disapprove and provide the Management Company specific written objections to the proposed Capital Budget within forty-five days after the Management Company’s submission of the proposed Capital Budget to the Owner. In the second and subsequent years, unless the Owner disapproves and provides written objections to the proposed Capital Budget, the Management Company may nonetheless make expenditures for Capital Replacements provided that the proposed Capital Budget for the year is consistent with the summary budget approved as part of the prior year’s Capital Budget. If the Owner does not approve the Capital Budget, then the Management Company may spend only those amounts for Capital Replacements required pursuant to Applicable Laws or to maintain safety standards at the Hotel. The Management Company may propose, for the Owner’s approval, revisions to any Capital Budget from time to time, as necessary to reflect any unpredicted changes, variables, or events, or to include significant, additional, unanticipated items of Capital Expenditures. The Management Company must present the Capital Budget in the form used by the Management Company at their other operations. Once approved by the Owner and reviewed by the Asset Manager the Management Company’s Capital Budget must include a comparison of actual expenditures expenditure against planned, a forecast detailing anticipated contributions to and proposed expenditures from the Special Account for Capital Expenditures (set forth in Section 3.11.C), analysis of fees paid to the Management Company, analysis of USALI to U.S. Standard General Ledger (USSGL) USSGL conversion (set forth in Section 3.19.B), analysis of the Management Company’s cash balance against Budget budget with proposed amount due to OwnerNPS (treasury Deposit-excess)/ the Management Company, Obligation-storage), and an analysis of fraud, waste, and abuse risk. C. B. The Management Company must deposit five percent of Adjusted Gross Revenues monthly into the “Special Account for Capital Expenditures “established in accordance with Section 3.11.C. The Management Company may disburse from the Special Account for Capital Expenditures only the expenditures set out in an approved Capital Budget unless the Owner specifically approves other expenditures in writing. The Management Company will carry forward and retain in the Special Account for Capital Expenditures all amounts remaining in the Special Account for Capital Expenditures at the close of each Fiscal Year (including, without limitation, all interest earned thereon) until fully used as provided in this Agreement. The Management Company will deposit into the Special Account for Capital Expenditures all proceeds from the sale or other disposition of FF&E no longer needed for the operation of the Hotel. Prior to the sale or other disposition of such FF&E, the Management Company must submit a list of such FF&E to the Owner at least 30 days prior to the sale or other disposition to receive approval of the sale or other disposition from the Owner, in order to ensure compliance with Federal Property Management Regulations. The Owner may identify, including, but not limited to, historic furnishings no longer serviceable in the operation that the Owner chooses to relocate or otherwise salvage, as described in Section 3.14.A.