Common use of Annual Operating Budget Clause in Contracts

Annual Operating Budget. On November 15 of each calendar year, commencing on November 15, 2005, the Lessee shall deliver to the Equity Investor, and, so long as the Lien of the Indenture has not been terminated and fully discharged, the Indenture Trustee and the Noteholders, an annual operating budget of Project Revenues and Operating Costs expected to be incurred by the Lessee during the relevant fiscal year to which such budget applies in the form attached hereto as Exhibit C (the "Annual Operating Budget") together with an Officer's Certificate of the Lessee certifying that such Annual Operating Budget has been prepared in good faith. The Equity Investor and the Noteholders will have the right to review and approve (such approval not to be unreasonably withheld or delayed) such Annual Operating Budget by December 15 of such year; provided, however, the Equity Investor's and the Noteholders' approval of the Annual Operating Budget shall not be required (A) if the aggregate Operating Costs set forth in such Annual Operating Budget do not exceed by 15% or more the sum of the (i) actual aggregate Operating Costs for the Project from January 1 of the then current fiscal year to October 31 of such year and (ii) the aggregate costs and expenses budgeted for the Project from November 1 of such year to December 31 of such year and (B) so long as on every fourth year (beginning in 2009), the aggregate Operating Costs set forth in the Annual Operating Budget for such year do not exceed by 45% or more the sum of the actual aggregate Operating Costs for the Project incurred in the calendar year that is four years prior to such year; provided further, that notwithstanding the foregoing, the Equity Investor's and the Indenture Trustee's approval of the Annual Operating Budget shall be required if, at any relevant time, the Lease Rent Coverage Ratio for either of the immediately preceding two semiannual periods was less than 1.20 to 1.00.

Annual Operating Budget. On November 15 (a) No later than thirty (30) days prior to the end of each calendar year, commencing on November 15, 2005Fiscal Year, the Lessee Company shall deliver cause its Officers to prepare and submit to the Equity Investor, and, so long as the Lien of the Indenture has not been terminated and fully discharged, the Indenture Trustee and the Noteholders, Board for approval an annual operating budget (each such budget being the “Draft Budget”) for the Company and its Subsidiaries for the next Fiscal Year (a “Budget Year”). Such Draft Budget shall include estimates of Project Revenues the Company’s and Operating Costs expected to its Subsidiaries’ operating expenses, uses of funds and capital expenditures for the Budget Year. The Board and Officers shall discuss the Draft Budget in good faith, and approval of such budget will be incurred a Major Decision. The Draft Budget with such modifications (if any) as approved by the Lessee during Board and the relevant fiscal year to which such budget applies in Members as a Major Decision will be the form attached hereto as Exhibit C (the "“Annual Operating Budget"”. (b) together with an Officer's Certificate Notwithstanding any provision of the Lessee certifying that such Annual Operating Budget has been prepared in good faith. The Equity Investor this Agreement, budgeted amounts for growth capital expenditures for constructing and the Noteholders will have the right to review opening New Units of existing concepts, and approve (such approval not to budgeted operating and pre-opening expenses for New Units of existing concepts may be unreasonably withheld or delayed) such Annual Operating Budget by December 15 of such year; provided, however, the Equity Investor's and the Noteholders' approval of the Annual Operating Budget shall not be required (A) if the aggregate Operating Costs set forth in such Annual Operating Budget do not exceed by 15% or more the sum of the (i) actual aggregate Operating Costs for the Project from January 1 of the then current fiscal year to October 31 of such year and (ii) the aggregate costs and expenses budgeted for the Project from November 1 of such year to December 31 of such year and (B) so long as on every fourth year (beginning in 2009), the aggregate Operating Costs set forth included in the Annual Operating Budget for such year do not exceed by 45% or more the sum of the actual aggregate Operating Costs for the Project incurred in the calendar year that is four years prior to such year; provided further, that notwithstanding the foregoing, the Equity Investor's and the Indenture Trustee's without requiring approval of the Annual Operating Budget shall be required if, at any relevant time, Members as a Major Decision to the Lease Rent Coverage Ratio for either extent such budgeted amounts are first approved by the Board in such annual period and each of the immediately preceding two semiannual periods following criteria are satisfied at the time the New Unit is first approved by the Board: (i) the Board determines that such annual budgeted amounts for growth capital expenditures in the aggregate for all such New Units first approved by the Board in such annual period are not projected to exceed the greater of (x) five percent (5%) of the Company’s revenues for the prior Fiscal Year and (y) $15,000,000; (ii) the Board determines that the projected annual budgeted operating expenses for such New Unit reflect such New Unit achieving breakeven on a projected New Unit “Adjusted EBITDAre” basis for the first twelve (12) months of its operations; (iii) the Board determines that pre-opening costs for such New Unit will not exceed $1,500,000; (iv) the Board determines that such New Unit is expected to generate a minimum unlevered IRR equal to at least twelve percent (12%); (v) the concept to which each such New Unit relates was either (i) an existing concept of units opened by the Company and its Subsidiaries as of the date hereof or (ii) a concept that was approved after the date hereof by the Board (including at least one designee of the Investor Member); and (vi) the Board’s determinations of the amounts referred to in clauses (i) through (v) above (collectively, “New Unit Costs”) were each based on projections prepared by the Company’s management that have been circulated to the entire Board, which projections state that they have been reasonably prepared based on assumptions reflecting the best currently available estimates and judgments of the Company’s management as to the expected future results of operations and financial condition of such New Units. (c) For purposes hereof, a “New Unit” means an asset that has been open for less than 1.20 to 1.00twelve (12) calendar months as of the beginning of the Budget Year.

Annual Operating Budget. On November 15 As soon as available but, in any event, within sixty (60) days prior to (i) the Cooperation Period Commencement Date in respect of the initial Plant to be completed and, thereafter, (ii) the commencement of each calendar year, commencing on November 15, 2005, the Lessee shall deliver to the Equity Investor, and, so long as the Lien of the Indenture has not been terminated and fully discharged, the Indenture Trustee and the NoteholdersFiscal Year, an annual operating budget of Project Revenues and Operating Costs expected to be incurred by the Lessee during the relevant fiscal year to which such budget applies in the form attached hereto as Exhibit C (the "Annual Operating Budget") together with an Officer's Certificate (including budgeted statements of income and sources and uses of cash and balance sheets) prepared by the Borrower and accompanied by a statement of the Lessee certifying that chief financial officer of the Borrower to the effect that, the best of his or her knowledge, the budget is a reasonable estimate for the period covered thereby. The first Annual Budget shall cover the period from the Cooperation Period Commencement Date through the end of the Fiscal Year in which the Cooperation Period Commencement Date occurs, and, if such period consists of less than six (6) months, for the immediately succeeding Fiscal Year. Each Annual Budget shall contain complete, fair and accurate estimates (by principal components) of Sales Proceeds, Operating and Maintenance Costs and Debt Service for each Month covered by such Annual Operating Budget has been prepared based on the Borrower's best projections at such time. Unless otherwise consented to by Eximbank, the Annual Budget from year to year shall be based on the same format as the Base Case Forecast, including any amounts allocated for contingencies, and be maintained on the same basis and provide sufficient detail to permit a meaningful comparison. For each Annual Budget that is expected to cover any period occurring after the Disbursement Date, Eximbank (in good faith. The Equity Investor and consultation with the Noteholders will have the right to Independent Engineer) shall review and approve (such approval not to be unreasonably withheld or delayed) such Annual Operating Budget by December 15 of such year; providedBudget, however, the Equity Investorand Eximbank's and the Noteholders' approval of the Annual Operating Budget response shall not be required (A) if unreasonably delayed. If Eximbank does not approve an Annual Budget, Eximbank shall notify the aggregate Operating Costs set forth in Borrower of the items which are disapproved and the reason for such disapproval. Until such Annual Operating Budget do not exceed by 15% or more is so approved, the sum of the (i) actual aggregate Operating Costs for the Project from January 1 Annual Budget most recently in effect shall continue to apply, except that any items of the then current fiscal year proposed Annual Budget that have been approved shall also be given effect. From time to October 31 time, but not more frequently than once per Quarter, the Borrower may propose amendments to an Annual Budget, and Eximbank (in consultation with the Independent Engineer) may reject such proposal within thirty (30) Business Days from the date the Borrower submits such proposal if in Eximbank's reasonable judgment such amendment is not reasonably necessary or advisable for operation of such year and (ii) the aggregate costs and expenses budgeted for the Project from November 1 and, if no such rejection is made, such amendments shall become effective. Not later than three (3) Business Days after the effective date of such year to December 31 each Annual budget and of such year and (B) so long as on every fourth year (beginning in 2009)any amendment thereto, the aggregate Operating Costs set forth in the Annual Operating Budget for such year do not exceed by 45% or more the sum Borrower shall provide a copy of the actual aggregate Operating Costs for same to the Project incurred in the calendar year that is four years prior to such year; provided further, that notwithstanding the foregoing, the Equity Investor's and the Indenture Collateral Trustee's approval of the Annual Operating Budget shall be required if, at any relevant time, the Lease Rent Coverage Ratio for either of the immediately preceding two semiannual periods was less than 1.20 to 1.00.

Annual Operating Budget. On November 15 of each calendar year(a) Manager shall, commencing within the time limits set forth on November 15Exhibit C-1, 2005, the Lessee shall deliver to Owner (i) a draft annual operations budget for the Equity Investor, and, so long as next Fiscal Year for the Lien of the Indenture has not been terminated and fully discharged, the Indenture Trustee and the Noteholders, an annual operating budget of Project Revenues and Operating Costs expected to be incurred by the Lessee during the relevant fiscal year to which such budget applies Facility in the form attached hereto as Exhibit C D (the "Annual Operating “Proposed Budget"”), for Owner’s approval, (ii) together an estimate, on an Accounting Period basis, of Gross Revenues and Facility Expenses, and (iii) an explanation of anticipated changes to resident charges, payroll rates and positions, non-wage cost increases, the proposed methodology and formula employed by Manager in allocating the cost of Facility Expenses, a line-item detail of any shared Facility Expenses, and all other factors differing from the then current Fiscal Year. The Proposed Budget shall be considered by the Owner and, upon consultation with an Officer's Certificate Manager, a final annual operations budget (the “Approved Budget”) shall be approved based on the Proposed Budget. If there is a delay in the finalization of a new Approved Budget, or if the Proposed Budget is not approved as aforesaid, Manager shall operate the Facility pursuant to the prior Fiscal Year’s Approved Budget, increased by the greater of (i) three and one-half percent (3.5%) or (ii) any increase in the Index, until the Proposed Budget is approved by Owner. The amount of the Lessee certifying that such Annual Operating Index increase for each Fiscal Year shall be determined by multiplying the Approved Budget has been prepared in good faith. The Equity Investor for the previous Fiscal Year by a fraction, the numerator of which shall be (i) the Index most recently published immediately prior to the next Fiscal Year, minus (ii) the Index most recently published immediately prior to the immediately preceding Fiscal Year, and the Noteholders denominator of which shall be the Index most recently published immediately prior to the immediately preceding Fiscal Year. Mathematically, the Index increase calculation may be expressed as (current Index - last year Index) ÷ last year Index. Provided that Manager is not an Affiliate of a Person holding a direct or indirect ownership interest in Owner, if consensus cannot be reached between the parties as to the Proposed Budget within sixty (60) days of Owner’s receipt of the Proposed Budget, the dispute will have be resolved exclusively by arbitration pursuant to Section 18.17 (it being acknowledged that if Manager is an Affiliate of a Person holding a direct or indirect ownership interest in Owner, such dispute will be resolved subject to and in accordance with the right JV Agreement). Either party may initiate such arbitration. Manager shall use commercially reasonable efforts to review and approve (such approval not adhere to be unreasonably withheld or delayed) such Annual Operating Budget by December 15 of such year; providedthe Approved Budgets, it is understood, however, that the Equity Investor's Approved Budget is only a projection by Manager of estimated results and that various circumstances such as, but not limited to, the Noteholders' approval cost of labor, material, services and supplies, casualty, operation of law, or economic and market conditions may make achievement of the Annual Operating Approved Budget impracticable or not obtainable. Except for expenditures necessary to satisfy any Emergency Requirements, Manager will secure Owner’s prior approval if actual aggregate annual expenditures exceed the aggregate annual expenditures set forth in the Approved Budget by more than 10% (the “Permitted Variance”). Notwithstanding the foregoing, Owner’s approval shall not be required (A) if the aggregate Operating Costs set forth in such Annual Operating Budget do not exceed by 15% or more the sum of the (i) excess actual aggregate annual expenditures (in excess of 10%) results in a Net Operating Costs Income margin consistent with that in the Approved Budget for the Project from January 1 applicable year. Notwithstanding anything contained herein to the contrary, any references to actions of Manager being “in accordance with the then current fiscal year to October 31 Approved Budget” or words of such year and (ii) similar import shall mean the aggregate costs and expenses budgeted for Approved Budget as adjusted by the Project from November 1 of such year to December 31 of such year and (B) so long as on every fourth year (beginning in 2009), the aggregate Operating Costs set forth in the Annual Operating Budget for such year do not exceed by 45% or more the sum of the actual aggregate Operating Costs for the Project incurred in the calendar year that is four years prior to such year; provided further, that notwithstanding the foregoing, the Equity Investor's and the Indenture Trustee's approval of the Annual Operating Budget shall be required if, at any relevant time, the Lease Rent Coverage Ratio for either of the immediately preceding two semiannual periods was less than 1.20 to 1.00Permitted Variance.