Common use of Replacement fund Clause in Contracts

Replacement fund. The replacement fund (the “Replacement Fund”) shall be established in accordance with Section 6.1 to be used solely for the costs of (i) additions to and replacements of FF&E; (ii) payments under Capital Leases for FF&E replacements or additions after the Opening Date; (iii) routine maintenance, routine repairs, and minor alterations that are reasonably necessary in Hyatt’s opinion and are normally classified as “capital expenditures” under the Uniform System or generally accepted accounting principles; and (iv) other Capital Expenditures approved by Hyatt and Owner to be covered by the Replacement Fund, either pursuant to a Capital Budget or otherwise, and for no other purpose. The Replacement Fund shall have the same Authorized Signatories as the Operating Account. All funds on deposit in the Replacement Fund shall be the property of Owner and shall be returned to the full control of Owner upon the expiration or earlier termination of this Agreement, but shall remain at the exclusive disposal of Hyatt throughout the Operating Term to be used consistent with the provisions of this Agreement. During the Operating Term, Hyatt shall transfer into the Replacement Fund from the Operating Account, on a monthly basis, an amount equal to: (i) 2% of the Revenue of the Hotel, from the Opening Date until the end of the 2nd Fiscal Year of the Operating Term, (ii) 3% of the Revenue of the Hotel, from the beginning of the 3rd Fiscal Year until the end of the 6th Fiscal Year of the Operating Term, and (iii) 4% of the Revenue of the Hotel each Fiscal Year thereafter, together with all proceeds from the sale of the FF&E, unless otherwise mutually agreed by the Parties. The amounts in the Replacement Fund shall bear interest, which, less any tax assessed on it, shall be credited and accumulated in the Replacement Fund. The Parties acknowledge that, from time to time, requirements of the Hotel will likely exceed the balance available in the Replacement Fund. Notwithstanding the foregoing, the Owner’s obligation to ensure the Hotel is maintained to a standard which is generally consistent with the Hotel Standard shall not be limited by the funds available in the Replacement Fund.