Common use of Annual Business Plan and Budget Clause in Contracts

Annual Business Plan and Budget. (a) The Approved Annual Business Plan and Budget shall be proposed, approved and implemented annually in accordance with the terms of Schedule 4. The Parties agree to reasonably cooperate and consult with each other in connection with the preparation and approval of the Approved Annual Business Plan and Budget. The Parties may mutually agree to modify or amend the process and procedures for proposing, approving and implementing the Approved Annual Business Plan and Budget and, upon such agreement, the Parties shall replace Schedule 4 with a new Schedule 4 reflecting such modification or amendment. (b) Notwithstanding anything in this Agreement to the contrary, Manager shall use diligent good faith efforts to cause the actual costs of operating and maintaining each Property (in total and on a line item basis (as used in this Agreement, a “line item” shall refer to a major budget category (e.g., payroll, cleaning, and utilities))) not to exceed the Approved Annual Business Plan and Budget (subject to Permitted Variances). Except with respect to an Emergency (as set forth in Section 4.5), Manager shall not, without Owner’s prior written approval, incur any costs or expenses or make any capital expenditures not specifically contemplated by the Approved Annual Business Plan and Budget (subject to Permitted Variances). To the extent reasonably ascertainable in advance, Manager shall notify Owner of any projected variance from the Approved Annual Business Plan and Budget (either in total or in any line item), including any Permitted Variances. Manager shall not transfer any amounts from one expense line item to another (other than from any contingency item to a permitted specific line item or as otherwise approved by Owner in writing). Manager shall notify Owner immediately (or as soon as otherwise reasonably possible) of the necessity for, the nature of, and the cost of, any Emergency.