Cash Allowance Items Sample Clauses
The Cash Allowance Items clause defines specific sums of money set aside within a contract to cover the cost of particular materials, equipment, or work that cannot be precisely determined at the time of agreement. These allowances are typically listed separately in the contract and are adjusted based on the actual cost incurred once the items or services are selected or performed. This clause ensures that both parties have a clear understanding of provisional costs, helping to manage budget uncertainties and avoid disputes over unforeseen expenses during the project.
Cash Allowance Items. (a) Project Co shall deposit the Cash Allowance Amount into the Cash Allowance Account on the dates and in the amounts set out in the Financial Model at Financial Close and shall manage the Cash Allowance Account in accordance with this Section 18.11.
(b) The cash flow process applicable to the Cash Allowance Account will be as follows:
(i) Project Co will deposit the Cash Allowance Amount into the Cash Allowance Account on the dates and in the amounts set out in the Financial Model at Financial Close;
(ii) Project Co will hold and manage all monies in the Cash Allowance Account in trust for, for the benefit of and as directed by IO;
(iii) interest earned on the Cash Allowance Account will accrue in the Cash Allowance Account and will be for the benefit of IO;
(iv) Project Co shall provide a reconciliation of the Cash Allowance Account to IO on a monthly basis;
(v) subject to Project Co’s obligation to fund the Cash Allowance Account pursuant to Section 18.11(b)(i), IO shall make deposits into the Cash Allowance Account in the event that the payment requirements for Cash Allowance Items, including applicable HST, for invoices approved by IO exceed the then balance of the Cash Allowance Account, for clarity, determined on an aggregate basis across all Cash Allowance Items, prior to approving any such invoices;
(vi) if, at the second anniversary of the Substantial Completion Date, there exists a positive balance in the Cash Allowance Account, such balance will be the property of IO and will be paid by Project Co to IO or as IO directs;
(vii) the Parties agree to mutually review the operation of the Cash Allowance Account on a regular basis and make any appropriate modifications to ensure its efficient operation; and
(viii) Section 18.11(c) to (h) shall apply only in respect of the Cash Allowance Items referred to in paragraphs (i) to (iv) of the definition of that term. Section 18.11(i) shall only apply in respect of the Cash Allowance Item referred to in paragraph (v) of the definition of that term.
(c) Project Co shall provide monthly reports to the IO Representative that include the following information:
(i) itemized and aggregate amounts committed to date for all Cash Allowance Items;
(ii) itemized and aggregate amounts spent to date for all Cash Allowance Items; and
(iii) the projected cost of each remaining Cash Allowance Item and the projected effect of such costs on the Cash Allowance Account.
(d) In addition to the monthly report described in Secti...