Annual Operating Plan. (a) Subject to the terms of the next succeeding sentence hereof, not later than one hundred twenty (120) days prior to the first day of each Project Year, Operator shall prepare and submit to Owner for approval a proposed operating and maintenance plan providing information for each month during the upcoming Project Year (the "O&M Plan"). The O&M Plan for the first Project Year shall be submitted to Owner for approval on the date on which this Agreement is executed unless previously submitted. The O&M Plan shall describe, in detail acceptable to Owner and on a monthly basis, anticipated maintenance and overhaul schedules, staffing plans, equipment acquisitions and spare parts and Consumables inventories (including a breakdown of capital items and expense items), schedules of subcontract services, plant performance data regarding required environmental performance, projected Fuel usage and such other matters as Owner may reasonably require. Any actions proposed under the O&M Plan shall be consistent with the Facility Data, the Operating Procedures, Prudent Utility Practices, the Related Agreements and this Agreement. Contemporaneously with the delivery of the O&M Plan, Operator shall submit to Owner a proposed budget for operating and maintaining the Facility during the upcoming Project Year (the "Operating Budget"), which shall include the estimated cost, based on time and materials and all fees contemplated in this Agreement, for all anticipated operating and maintenance services to be provided by Operator during each month of the upcoming Project Year in the account structure and format provided by Owner (the O&M Plan and the Operating Budget are hereinafter sometimes together called the "Annual Operating Plan"). When approved pursuant to subparagraph (b) below, the Annual Operating Plan shall be an "Approved Annual Operating Plan" and shall consist of an "Approved O&M Plan" and an "Approved Operating Budget". (b) Owner shall give its approval or disapproval of the Annual Operating Plan no later than thirty (30) days after receipt thereof from Operator. If Owner objects to all or any portion of the proposed Annual Operating Plan, Owner shall furnish its objections in writing to Operator, and Owner and Operator shall amend such Annual Operating Plan in order to accommodate to Owner's satisfaction those items to which Owner objects. (c) An Approved Annual Operating Plan shall constitute authorization for Operator to operate and maintain the Facility in accordance with such Approved Annual Operating Plan and the terms of this Agreement, it being recognized and agreed that Operator shall operate and maintain the Facility in a prudent and efficient manner so as to maximize both the current performance and the residual value of the Facility and shall endeavor to ensure that the actual costs of operating and maintaining the Facility are as low as reasonably practicable and in any event do not exceed the Approved Operating Budget either in total or, to the extent reasonably practicable, in any one budgetary category, Operator shall notify Owner as soon as reasonably possible of any significant deviations or discrepancies between the costs and expenses actually incurred by Operator during each Project Year and the costs and expenses projected to be incurred by Operator as set forth in the Approved Operating Budget for each such Project Year. (d) In the event Operator desires to request an adjustment to an Approved Annual Operating Plan at any time during the Project Year, Operator shall submit a proposed revised Annual Operating Plan for Owner's consideration, which Owner shall approve or disapprove within fifteen (15) days after submission thereof. If the proposed revised Annual Operating Plan is disapproved by Owner within such fifteen (15) day period, Owner shall furnish Operator with the reasons for such disapproval and shall immediately begin discussions with Operator in an effort to reach a mutually agreeable revised Annual Operating Plan. Upon such agreement, Operator shall revise the Annual Operating Plan with respect thereto. Until the revised Annual Operating Plan is approved in writing by Owner, Operator shall not, except in an emergency as described in Section 2.6 hereof, act outside of the Approved Annual Operating Plan for such Project Year without the prior written consent of Owner. Once approved, Operator's authority as to the revised, or any additionally revised, Annual Operating Plan shall be the same as that authorized for the original Approved Annual Operating Plan.
Appears in 1 contract
Samples: Operation and Maintenance Agreement (Cogen Technologies Inc)
Annual Operating Plan. (a) Subject to the terms of the next succeeding sentence hereof, not later than one hundred twenty (120) days prior to the first day of each Project Year, Operator shall prepare and submit to Owner for approval a proposed operating and maintenance plan providing information for each month during the upcoming Project Year (the "O&M Plan"). The O&M Plan for the first first, Project Year shall be submitted to Owner for approval on the date on which this Agreement is executed unless previously submitted. The O&M Plan shall describe, in detail acceptable to Owner and on a monthly basis, anticipated maintenance and overhaul schedules, staffing plans, equipment acquisitions and spare parts and Consumables inventories (including a breakdown of capital items and expense items), schedules of subcontract services, plant performance data regarding required environmental performance, projected Fuel usage and such other matters as Owner may reasonably require. Any actions proposed under the O&M Plan shall be consistent with the Facility Data, the Operating Procedures, Prudent Utility Practices, the Related Agreements and this Agreement. Contemporaneously with the delivery of the O&M Plan, Operator shall submit to Owner a proposed budget for operating and maintaining the Facility during the upcoming Project Year (the "Operating Budget"), which shall include the estimated cost, based on time and materials and all fees contemplated in this Agreement, for all anticipated operating and maintenance services to be provided by Operator during each month of the upcoming Project Year in the account structure and format provided by Owner (the O&M Plan and the Operating Budget are hereinafter sometimes together called the "Annual Operating Plan"). When approved pursuant to subparagraph (b) below, the Annual Operating Plan shall be an "Approved Annual Operating Plan" and shall consist of an "Approved O&M Plan" and an "Approved Operating Budget".
(b) Owner shall give its approval or disapproval of the Annual Operating Plan no later than thirty (30) days after receipt thereof from Operator. If Owner objects to all or any portion of the proposed Annual Operating Plan, Owner shall furnish its objections in writing to Operator, and Owner and Operator shall amend such Annual Operating Plan in order to accommodate to Owner's satisfaction those items to which Owner objects.
(c) An Approved Annual Operating Plan shall constitute authorization for Operator to operate and maintain the Facility in accordance with such Approved Annual Operating Plan and the terms of this Agreement, it being recognized and agreed that Operator shall operate and maintain the Facility in a prudent and efficient manner so as to maximize both the current performance and the residual value of the Facility and shall endeavor to ensure that the actual costs of operating and maintaining the Facility are as low as reasonably practicable and in any event do not exceed the Approved Operating Budget either in total or, to the extent reasonably practicable, in any one budgetary category, . Operator shall notify Owner as soon as reasonably possible of any significant deviations or discrepancies between the costs and expenses actually incurred by Operator during each Project Year and the costs and expenses projected to be incurred by Operator as set forth in the Approved Operating Budget for each such Project Year.
(d) In the event Operator desires to request an adjustment to an Approved Annual Operating Plan at any time during the Project Year, Operator shall submit a proposed revised Annual Operating Plan for Owner's consideration, which Owner shall approve or disapprove within fifteen (15) days after submission thereof. If the proposed revised Annual Operating Plan is disapproved by Owner within such fifteen (15) day period, Owner shall furnish Operator with the reasons for such disapproval and shall immediately begin discussions with Operator in an effort to reach a mutually agreeable revised Annual Operating Plan. Upon such agreement, Operator shall revise the Annual Operating Plan with respect thereto. Until the revised Annual Operating Plan is approved in writing by Owner, Operator shall not, except in an emergency as described in Section 2.6 hereof, act outside of the Approved Annual Operating Plan for such Project Year without the prior written consent of Owner. Once approved, Operator's authority as to the revised, or any additionally revised, Annual Operating Plan shall be the same as that authorized for the original Approved Annual Operating Plan.
Appears in 1 contract
Samples: Operation and Maintenance Agreement (Cogen Technologies Inc)
Annual Operating Plan. (a) Subject Lender shall have the right to review and, during the continuance of an Event of Default and solely with respect to any item or amount in such proposed Annual Operating Plan over which Master Tenant has approval rights pursuant to the terms of the next succeeding sentence hereof, not later than one hundred twenty (120) days prior to the first day of each Project Year, Operator shall prepare and submit to Owner for approval a proposed operating and maintenance plan providing information for each month during the upcoming Project Year (the "O&M Plan"). The O&M Plan for the first Project Year shall be submitted to Owner for approval on the date on which this Agreement is executed unless previously submitted. The O&M Plan shall describe, in detail acceptable to Owner and on a monthly basis, anticipated maintenance and overhaul schedules, staffing plans, equipment acquisitions and spare parts and Consumables inventories (including a breakdown of capital items and expense items), schedules of subcontract services, plant performance data regarding required environmental performance, projected Fuel usage and such other matters as Owner may reasonably require. Any actions proposed under the O&M Plan shall be consistent with the Facility Data, the Operating Procedures, Prudent Utility Practices, the Related Agreements and this Agreement. Contemporaneously with the delivery of the O&M Plan, Operator shall submit to Owner a proposed budget for operating and maintaining the Facility during the upcoming Project Year (the "Operating Budget"), which shall include the estimated cost, based on time and materials and all fees contemplated in this Management Agreement, for all anticipated operating and maintenance services to be provided by Operator during each month of the upcoming Project Year approve such items or amounts in the account structure and format provided by Owner (the O&M Plan and the Operating Budget are hereinafter sometimes together called the "such proposed Annual Operating Plan"). When approved pursuant to subparagraph Any such approval shall not be unreasonably withheld, conditioned or delayed. If, within ten (b10) below, the Business Days after Lender’s receipt of Borrower’s written request for such approval of such proposed Annual Operating Plan shall be an "Approved Annual Operating Plan" stating: (i) “TIME SENSITIVE RESPONSE REQUIRED WITHIN TEN (10) BUSINESS DAYS OF RECEIPT OR DEEMED APPROVAL MAY OCCUR”, together with the a true and shall consist of an "Approved O&M Plan" and an "Approved Operating Budget".
(b) Owner shall give its approval or disapproval of the Annual Operating Plan no later than thirty (30) days after receipt thereof from Operator. If Owner objects to all or any portion complete copy of the proposed Annual Operating Plan, Owner shall furnish its objections in writing including any exhibits or supporting information prepared by Hotel Manager and delivered to OperatorBorrower or Master Tenant pursuant to the Management Agreement (if any), and Owner and Operator shall amend Lender does not approve or disapprove such proposed Annual Operating Plan in order (disapproval to accommodate include reasons), Borrower may deliver a second notice to Owner's satisfaction those items to which Owner objects.
(c) An Approved Annual Operating Plan shall constitute authorization for Operator to operate and maintain Lender, together with a second copy of the Facility in accordance with such Approved proposed Annual Operating Plan and the terms any such exhibits and supporting information (if any), stating: “PURSUANT TO THE TERMS OF SUBSECTION 7.1(d) OF THE AMENDED AND RESTATED LOAN AGREEMENT EXECUTED BY SHR MLB, LLC, A DELAWARE LIMITED LIABILITY COMPANY, AS BORROWER, DATED JANUARY 29, 2015, LENDER HAS FAILED TO RESPOND TO THE REQUEST FOR APPROVAL OF THE PROPOSED ANNUAL OPERATING PLAN. FAILURE OF LENDER TO RESPOND TO BORROWER’S REQUEST FOR SUCH APPROVAL WITHIN FIVE (5) BUSINESS DAYS OF RECEIPT OF THIS SECOND NOTICE SHALL BE DEEMED TO BE LENDER’S APPROVAL OF SUCH PROPOSED ANNUAL OPERATING PLAN”. If Lender fails to approve or disapprove (which such disapproval shall include in reasonable detail, reasons for such disapproval) of this Agreement, it being recognized and agreed that Operator shall operate and maintain the Facility in a prudent and efficient manner so as to maximize both the current performance and the residual value of the Facility and shall endeavor to ensure that the actual costs of operating and maintaining the Facility are as low as reasonably practicable and in any event do not exceed the Approved Operating Budget either in total or, to the extent reasonably practicable, in any one budgetary category, Operator shall notify Owner as soon as reasonably possible of any significant deviations or discrepancies between the costs and expenses actually incurred by Operator during each Project Year and the costs and expenses projected to be incurred by Operator as set forth in the Approved Operating Budget for each such Project Year.
(d) In the event Operator desires to request an adjustment to an Approved proposed Annual Operating Plan at any time during the Project Year, Operator shall submit a proposed revised Annual Operating Plan for Owner's consideration, which Owner shall approve or disapprove within fifteen (15) days after submission thereof. If the proposed revised Annual Operating Plan is disapproved by Owner within such fifteen additional five (155) day Business Day period, Owner shall furnish Operator with the reasons for such disapproval and shall immediately begin discussions with Operator in an effort to reach a mutually agreeable revised Annual Operating Plan. Upon such agreement, Operator shall revise the Annual Operating Plan with respect thereto. Until the revised Annual Operating Plan is approved in writing by Owner, Operator shall not, except in an emergency as described in Section 2.6 hereof, act outside of the Approved Annual Operating Plan for such Project Year without the prior written consent of Owner. Once approved, Operator's authority as to the revised, or any additionally revised, proposed Annual Operating Plan shall be deemed approved by Lender. To the same as that authorized for the original Approved extent Master Tenant, Lender and Hotel Manager cannot agree on any such proposed Annual Operating Plan, Borrower shall cause Master Tenant to submit such matter to arbitration for resolution in accordance with the procedures set forth in Article 10 of the Management Agreement and, until such resolution is determined according to such procedures or a new Annual Operating Plan is agreed to by Master Tenant, Lender and Hotel Manager, Borrower shall cause Master Tenant to cause Hotel Manager to continue operating the Premises pursuant to the prior year’s Annual Operating Budget in the manner, and subject to the terms and conditions, set forth in Article 4 of the Management Agreement.
Appears in 1 contract
Annual Operating Plan. (a) Subject to the terms of the next succeeding sentence hereof, not later than one hundred twenty (120) At least 120 days prior to the first day beginning of each Project Year, Operator calendar year the Operating Manager shall prepare and submit to Owner for approval the Management Committee a proposed operating and maintenance plan providing information for each month during the upcoming Project Year (the "O&M Plan"). The O&M Annual Operating Plan for the first Project Year shall coming calendar year (and such longer period as may be submitted necessary to Owner for approval on cover projects that will not be completed within the date on which this Agreement is executed unless previously submittedcoming calendar year). The O&M Such proposed Plan shall describedescribe in reasonable detail the nature and extent of proposed activities and operations of the Company and the cost thereof for the coming calendar year including, without limitation:
(i) an operating cost budget broken down by line item and nature of cost;
(ii) basic pro forma financial reports including an income statement, balance sheet and statement of cash flows prepared in detail acceptable to Owner accordance with generally accepted accounting principles consistently applied;
(iii) a marketing plan for such calendar year addressing, among other things, the projected market and on prices for each Product, potential purchasers and the terms of existing and anticipated contracts for sale of Products, and potential new markets.
(iv) a monthly basisplan for capital expenditures;
(v) a plan for any expansion of the Company's facilities, anticipated including, without limitation, any expansion of existing facilities or the acquisition or construction of facilities at any new location;
(vi) proposed maintenance and overhaul schedulesimprovements, staffing planswith respect to the Company's properties; and
(vii) a plan for financing the activities of the Company, equipment acquisitions and spare parts and Consumables inventories (including a breakdown of if any. To the extent practicable, the proposed annual operating plan shall separately identify capital items and expense items). The Management Committee shall meet and consider such proposed Annual Operating Plan and alternatives thereto to make the proposed plan and budget acceptable to the Management Committee. The plan and budget, schedules of subcontract servicesif any, plant performance data regarding required environmental performance, projected Fuel usage and such other matters as Owner may reasonably require. Any actions proposed under approved by the O&M Plan Management Committee shall be consistent with the Facility Data, the Operating Procedures, Prudent Utility Practices, the Related Agreements and this Agreement. Contemporaneously with the delivery of the O&M Plan, Operator shall submit to Owner a proposed budget for operating and maintaining the Facility during the upcoming Project Year (the "Operating Budget"), which shall include the estimated cost, based on time and materials and all fees contemplated in this Agreement, for all anticipated operating and maintenance services to be provided by Operator during each month of the upcoming Project Year in the account structure and format provided by Owner (the O&M Plan and the Operating Budget are hereinafter sometimes together called the "Annual Operating Plan."). When approved pursuant to subparagraph
(b) belowThe Management Committee shall diligently and in good faith seek to approve an Annual Operating Plan for each calendar year prior to the commencement of such calendar year, which such approval shall be unanimous. If the Management Committee has been unable to unanimously agree upon and approve the Annual Operating Plan for a calendar year prior to the commencement thereof, the Management Committee shall diligently and in good faith seek to approve an amended Operating Plan for the remainder of such year and the following year, provided that a Manager's vote to approve any Annual Operating Plan shall be within the sole discretion of such Manager. If, prior to the commencement of any calendar year, an "Approved Annual Operating Plan" and shall consist of an "Approved O&M Plan" and an "Approved Operating Budget".
(b) Owner shall give its approval or disapproval of the Annual Operating Plan no later than thirty (30) days after receipt thereof from Operator. If Owner objects has not been approved for such calendar year, the Management Committee shall agree upon a budget necessary to all or any portion of the proposed Annual Operating Plan, Owner shall furnish its objections in writing to Operator, and Owner and Operator shall amend such Annual Operating Plan in order to accommodate to Owner's satisfaction those items to which Owner objects.
(c) An Approved Annual Operating Plan shall constitute authorization for Operator to operate and maintain the Facility in accordance with such Approved Annual Operating Plan and the terms of this Agreement, it being recognized and agreed that Operator shall operate and maintain the Facility in Company's existing assets as would a prudent similarly situated company, including, without limitation, making any necessary repairs to and efficient manner so as to maximize both the current performance and the residual value of the Facility and shall endeavor to ensure that the actual costs of operating and otherwise maintaining the Facility are as low as reasonably practicable and in any event do not exceed Company's properties (the Approved Operating Budget either in total or, to the extent reasonably practicable, in any one budgetary category, Operator shall notify Owner as soon as reasonably possible of any significant deviations or discrepancies between the costs and expenses actually incurred by Operator during each Project Year and the costs and expenses projected to be incurred by Operator as set forth in the Approved Operating Budget for each such Project Year.
(d) In the event Operator desires to request an adjustment to an Approved Annual Operating Plan at any time during the Project Year, Operator shall submit a proposed revised Annual Operating Plan for Owner's consideration, which Owner shall approve or disapprove within fifteen (15) days after submission thereof. If the proposed revised Annual Operating Plan is disapproved by Owner within such fifteen (15) day period, Owner shall furnish Operator with the reasons for such disapproval and shall immediately begin discussions with Operator in an effort to reach a mutually agreeable revised Annual Operating Plan. Upon such agreement, Operator shall revise the Annual Operating Plan with respect thereto. Until the revised Annual Operating Plan is approved in writing by Owner, Operator shall not, except in an emergency as described in Section 2.6 hereof, act outside of the Approved Annual Operating Plan for such Project Year without the prior written consent of Owner. Once approved, Operator's authority as to the revised, or any additionally revised, Annual Operating Plan shall be the same as that authorized for the original Approved Annual Operating Plan."Minimum
Appears in 1 contract
Annual Operating Plan. (a) Subject to the terms of the next succeeding sentence hereof, not 5.2.1 No later than one hundred twenty ninety (12090) days prior to the first day commencement of each Project Year, Operator shall prepare and submit to Owner for approval a proposed operating and maintenance plan providing information for each month during the upcoming Project Operational Year (the "O&M Plan"). The O&M Plan for the first Project Year shall be submitted to Owner for approval on the date on which of this Agreement is executed unless previously submitted. The O&M Plan shall describe, in detail acceptable to the Operator will provide the Owner and on a monthly basis, anticipated maintenance and overhaul schedules, staffing plans, equipment acquisitions and spare parts and Consumables inventories (including a breakdown of capital items and expense items), schedules of subcontract services, plant performance data regarding required environmental performance, projected Fuel usage and such other matters as Owner may reasonably require. Any actions proposed under the O&M Plan shall be consistent with the Facility Data, the Operating Procedures, Prudent Utility Practices, the Related Agreements and this Agreement. Contemporaneously with the delivery of the O&M Plan, Operator shall submit to Owner a proposed budget for operating and maintaining the Facility during the upcoming Project Year (the "Operating Budget"), which shall include the estimated cost, based on time and materials and all fees contemplated in this Agreement, for all anticipated operating and maintenance services to be provided by Operator during each month of the upcoming Project Year in the account structure and format provided by Owner (the O&M Plan and the Operating Budget are hereinafter sometimes together called the "an Annual Operating Plan"). When approved pursuant to subparagraph (b) below, the The Annual Operating Plan shall be an "Approved annual program and monthly timetable for the operation and maintenance of the Utility Plant and performance of the Services, which shall set forth on a monthly basis the underlying assumptions and implementation plans in connection with the Annual Operating Plan" Budget, and shall consist of an "Approved O&M Plan" and an "Approved Operating Budget".include the following information:
(bi) Owner shall give its approval or disapproval Routine operational services;
(ii) Routine repairs and maintenance for each part of the Annual Operating Plan no later than thirty Utility Plant;
(30iii) days after receipt thereof from Information regarding the inventory and proposed procurement of equipment, spare parts, tools, test equipment and, in the case of major equipment, the residual life thereof;
(iv) Routine operational information, general operating data and other Utility Plant data;
(v) Scheduled Outages;
(vi) List of consumable items in the aggregate;
(vii) Staffing plans and details regarding the number of part-time and temporary staff and consultants;
(viii) Operator. If Owner objects to all or any portion ’s recommendations on matters affecting the operation and maintenance of the proposed Annual Operating PlanUtility Plant, Owner shall furnish its objections in writing to Operator, including any requirements for Sustaining Capital and Owner relevant Improvements or Additions for the Operational Year and Operator shall amend such Annual Operating Plan in order to accommodate to Owner's satisfaction those items to which Owner objects.
(c) An Approved Annual Operating Plan shall constitute authorization any other capital expenditures for Operator to operate and maintain the Facility in accordance with such Approved Annual Operating Plan and the terms of this Agreement, it being recognized and agreed that Operator shall operate and maintain the Facility in a prudent and efficient manner so as to maximize both the current performance and the residual value of the Facility and shall endeavor to ensure that the actual costs of operating and maintaining the Facility are as low as reasonably practicable and in any event do not exceed the Approved Operating Budget either in total or, to the extent reasonably practicableOperational Year, in any one budgetary category, Operator shall notify Owner as soon as reasonably possible of any significant deviations or discrepancies between the costs and expenses actually incurred by Operator during each Project Year and the costs and expenses projected to be incurred by Operator as set forth in the Approved Operating Budget for each such Project Year.
(d) In the event Operator desires to request an adjustment to an Approved Annual Operating Plan at any time during the Project Year, Operator shall submit a proposed revised Annual Operating Plan for Owner's consideration, which Owner shall approve or disapprove within fifteen (15) days after submission thereof. If the proposed revised Annual Operating Plan is disapproved by Owner within such fifteen (15) day period, Owner shall furnish Operator case together with the reasons for such disapproval recommendations and shall immediately begin discussions the expected capital costs and net change in operating cost effected thereby;
(ix) Annual safety and environmental management plans;
(x) Action plans arising from audit results and insurance requirements; and
(xi) A description of actions necessary to ensure that the Utility Plant will comply with Operator in an effort to reach a mutually agreeable revised Annual Operating Plan. Upon such agreement, all Applicable Laws.
5.2.2 The Operator shall revise prepare the Annual Operating Plan with respect thereto. Until based on the revised Annual Operating Plan is approved in writing Scheduled Outage periods agreed upon by the Owner, acting reasonably. The Parties agree that Scheduled Outages shall be planned to ensure minimum disruption to both the Facility and the Operator’s Mill, and the Operator shall not, except in an emergency as described in Section 2.6 hereof, act outside of co-ordinate Scheduled Outages with the Approved Annual Operating Plan for such Project Year without the prior written consent of Owner. Once approved, Operator's authority as to the revised, or any additionally revised, Annual Operating Plan shall be the same as that authorized for the original Approved Annual Operating Plan’s Mill.
Appears in 1 contract
Samples: Management, Operations and Maintenance Agreement (NewPage CORP)
Annual Operating Plan. (a) Subject to the terms of the next succeeding sentence hereof, not later than one hundred twenty (120) At least 90 days prior to the first day beginning of each Project Year, Operator calendar year the Chairman shall prepare and submit to Owner for approval the Management Committee a proposed annual operating plan for the coming calendar year (and maintenance plan providing information for each month during such longer period as may be necessary to cover projects that will not be completed within the upcoming Project Year (the "O&M Plan"coming calendar year). The O&M Plan Such proposed plan shall describe in reasonable detail the nature and extent of proposed activities and operations of the Company and the cost thereof for the first Project Year shall coming calendar year including, without limitation:
(i) the most recent Mine Production Plan,
(ii) a processing plan showing tonnages and grades of tar sands to be submitted to Owner processed, recovery and Product inventory changes,
(iii) manpower resource scheduling,
(iv) production operating costs broken down by line item and nature of cost, #325596.v2 40
(v) basic pro forma financial reports including an income statement, balance sheet and statement of cash flows prepared in accordance with generally accepted accounting principles consistently applied,
(vi) the most recent Marketing Plan,
(vii) a plan for approval on the date on which this Agreement is executed unless previously submitted. The O&M Plan shall describecapital expenditures,
(viii) an exploration program and budget, in detail acceptable to Owner and on a monthly basis, anticipated if any,
(ix) proposed Plant maintenance and overhaul schedulesimprovements,
(x) a plan for financing the activities of the Company, staffing plansif any, equipment acquisitions and spare parts and Consumables inventories and
(including a breakdown xi) provision for accrual of reasonably anticipated Environmental Compliance expenses for all operations contemplated under the proposed annual operating plan. To the extent practicable, the proposed annual operating plan shall separately identify capital items and expense items). The Management Committee shall meet and consider such proposed annual operating plan and alternatives thereto to make the proposed plan and budget acceptable to all the Managers. The plan and budget, schedules of subcontract servicesif any, plant performance data regarding required environmental performance, projected Fuel usage and such other matters as Owner may reasonably require. Any actions proposed under approved by the O&M Plan Management Committee shall be consistent with the Facility Data, the Operating Procedures, Prudent Utility Practices, the Related Agreements and this Agreement. Contemporaneously with the delivery of the O&M Plan, Operator shall submit to Owner a proposed budget for operating and maintaining the Facility during the upcoming Project Year (the "Operating Budget"), which shall include the estimated cost, based on time and materials and all fees contemplated in this Agreement, for all anticipated operating and maintenance services to be provided by Operator during each month of the upcoming Project Year in the account structure and format provided by Owner (the O&M Plan and the Operating Budget are hereinafter sometimes together called the "Annual Operating Plan."). When approved pursuant to subparagraph
(b) belowIf the Management Committee is unable to approve an Annual Operating Plan for a calendar year, to the extent necessary to maintain its existing assets as would a prudent similarly situated company, a majority of the Managers shall have the power and authority to continue the activities and operations of the Company at levels comparable to the last approved Annual Operating Plan and shall be guided by the logic thereof while taking into account new circumstances.
(c) During any year for which an Annual Operating Plan has not been approved the Management Committee shall #325596.v2 41 diligently and in good faith seek to approve an Annual Operating Plan for the remainder of such year and the following year, provided that a Manager's vote to approve any Annual Operating Plan shall be within the sole discretion of such Manager. If by the end of such year an Annual Operating Plan has not been approved for the following year, the Management Committee shall agree upon a budget necessary to maintain the Company's existing assets as would a prudent similarly situated company, including, without limitation, making any necessary repairs to and otherwise maintaining the Properties and the Initial Plant (the "Approved Minimum Budget"). If the Managers are unable to agree on the Minimum Budget the determination of the Minimum Budget shall be submitted to arbitration in accordance with the provisions of Article XVI, provided that a neutral "Big Six" accounting firm shall act as the sole arbitrator in lieu of three arbitrators. The Minimum Budget shall be redetermined from year to year using the procedure described above until the Management Committee approves an Annual Operating Plan" and . During the periods covered by a Minimum Budget, the Company shall consist make quarterly distributions of an "Approved O&M Plan" and an "Approved Operating all Available Cash (determined using the Minimum Budget".
(b) Owner shall give its approval or disapproval of the Annual Operating Plan no later than thirty (30) days after receipt thereof from Operator. If Owner objects to all or any portion of the proposed Annual Operating Plan, Owner shall furnish its objections in writing to Operator, and Owner and Operator shall amend such Annual Operating Plan in order to accommodate to Owner's satisfaction those items to which Owner objects.
(c) An Approved Annual Operating Plan shall constitute authorization for Operator to operate and maintain the Facility in accordance with such Approved Annual Operating Plan and the terms of this Agreement, it being recognized and agreed that Operator shall operate and maintain the Facility in a prudent and efficient manner so as to maximize both the current performance and the residual value of the Facility and shall endeavor to ensure that the actual costs of operating and maintaining the Facility are as low as reasonably practicable and in any event do not exceed the Approved Operating Budget either in total or, to the extent reasonably practicable, in any one budgetary category, Operator shall notify Owner as soon as reasonably possible of any significant deviations or discrepancies between the costs and expenses actually incurred by Operator during each Project Year and the costs and expenses projected Members pursuant to be incurred by Operator as set forth in the Approved Operating Budget for each such Project YearArticle VIII.
(d) In case of an actual emergency, any Manager may take on behalf of the event Operator desires Company any reasonable action he or she deems necessary to request an adjustment protect life or property, to an Approved protect the assets of the Company or to comply with applicable law, without approval of a Major Decision or any other necessary approval of the Management Committee if time does not permit obtaining such approval. A Manager taking such action shall promptly notify the other Managers and the Members of the emergency or unexpected expenditure.
(e) The Management Committee shall have the right to call for Additional Capital Contributions from the Members, pro rata to their respective Sharing Ratios, to pay for costs and expenses incurred by the Company and either (i) budgeted for in the current Annual Operating Plan but not incurred under the EPC Contract (capital calls to pay costs and expenses incurred under the EPC Contract may be made in accordance with Section 7.4), or (ii) incurred pursuant to Section 5.3(d). If the Management Committee approves an Additional Capital Contribution pursuant to this Section 5.3(e), the Chairman shall, as soon as practicable thereafter, deliver to each Member a Notice of Additional Capital Contribution. The required Additional Capital Contribution for each Member shall be calculated by multiplying the Required Capital by that Member's percentage Sharing Ratio. The Members shall be obligated to make such Additional Capital Contributions to the Company in immediately available funds on or before the date specified in the applicable Notice of Additional Capital Contributions.
(f) Following the approval of an Additional Capital Contribution pursuant to Section 5.3(e) to pay costs and expenses incurred in connection with any action taken pursuant to Section 5.3(d), any Member shall be entitled to contest the necessity for and reasonableness of such costs #325596.v2 42 and expenses, if all of the Managers appointed by such Member voted not to approve such Additional Capital Contribution, by notice to the other Member within 15 calendar days of the date on which the decision approving the Additional Capital Contribution was passed by the Management Committee; provided that Crown (or any assignee of all or any portion Crown's interest in the Company) shall not be entitled to contest the reasonableness of any such cost or expense taken at any time during that Crown or any Affiliate of Crown is the Project Yearoperator under the Management Agreement unless MCNIC declared the emergency resulting in the incurrence of such cost or expense and MCNIC caused the Company to incur such cost or expense without the concurrence of Crown. In the event that disputes arising under the foregoing sentence are not resolved by negotiations among the Members, Operator shall submit a proposed revised Annual Operating Plan for Owner's consideration, which Owner shall approve or disapprove within fifteen (15) days after submission thereof. If the proposed revised Annual Operating Plan is disapproved by Owner within such fifteen (15) day period, Owner shall furnish Operator with the reasons for such disapproval and shall immediately begin discussions with Operator in an effort to reach a mutually agreeable revised Annual Operating Plan. Upon such agreement, Operator shall revise the Annual Operating Plan with respect thereto. Until the revised Annual Operating Plan is approved in writing by Owner, Operator shall not, except in an emergency as described in Section 2.6 hereof, act outside reasonableness of the Approved Annual Operating Plan for such Project Year without above described shall be determined by arbitration pursuant to Article XVI. The contesting Member shall not be obligated to make its share of the prior written consent of Owner. Once approved, Operator's authority as Additional Capital Contribution to the revised, or any additionally revised, Annual Operating Plan shall be extent the same as that authorized for the original Approved Annual Operating Plancontested costs and expenses are determined not to have been necessary and reasonable.
Appears in 1 contract
Annual Operating Plan. (a) Subject to the terms of the next succeeding sentence hereof, not later than one hundred twenty (120) At least 90 days prior to the first day beginning of each Project Year, Operator calendar year the Chairman shall prepare and submit to Owner for approval the Management Committee a proposed annual operating plan for the coming calendar year (and maintenance plan providing information for each month during such longer period as may be necessary to cover projects that will not be completed within the upcoming Project Year (the "O&M Plan"coming calendar year). The O&M Plan Such proposed plan shall describe in reasonable detail the nature and extent of proposed activities and operations of the Company and the cost thereof for the first Project Year shall coming calendar year including, without limitation:
(i) the most recent Mine Production Plan,
(ii) a processing plan showing tonnages and grades of tar sands to be submitted to Owner processed, recovery and Product inventory changes,
(iii) manpower resource scheduling,
(iv) production operating costs broken down by line item and nature of cost,
(v) basic pro forma financial reports including an income statement, balance sheet and statement of cash flows prepared in accordance with generally accepted accounting principles consistently applied,
(vi) the most recent Marketing Plan,
(vii) a plan for approval on the date on which this Agreement is executed unless previously submitted. The O&M Plan shall describecapital expenditures,
(viii) an exploration program and budget, in detail acceptable to Owner and on a monthly basis, anticipated if any,
(ix) proposed Plant maintenance and overhaul schedulesimprovements,
(x) a plan for financing the activities of the Company, staffing plansif any, equipment acquisitions and spare parts and Consumables inventories and
(including a breakdown xi) provision for accrual of reasonably anticipated Environmental Compliance expenses for all operations contemplated under the proposed annual operating plan. To the extent practicable, the proposed annual operating plan shall separately identify capital items and expense items). The Management Committee shall meet and consider such proposed annual operating plan and alternatives thereto to make the proposed plan and budget acceptable to all the Managers. The plan and budget, schedules of subcontract servicesif any, plant performance data regarding required environmental performance, projected Fuel usage and such other matters as Owner may reasonably require. Any actions proposed under approved by the O&M Plan Management Committee shall be consistent with the Facility Data, the Operating Procedures, Prudent Utility Practices, the Related Agreements and this Agreement. Contemporaneously with the delivery of the O&M Plan, Operator shall submit to Owner a proposed budget for operating and maintaining the Facility during the upcoming Project Year (the "Operating Budget"), which shall include the estimated cost, based on time and materials and all fees contemplated in this Agreement, for all anticipated operating and maintenance services to be provided by Operator during each month of the upcoming Project Year in the account structure and format provided by Owner (the O&M Plan and the Operating Budget are hereinafter sometimes together called the "Annual Operating Plan."). When approved pursuant to subparagraph
(b) belowIf the Management Committee is unable to approve an Annual Operating Plan for a calendar year, to the extent necessary to maintain its existing assets as would a prudent similarly situated company, a majority of the Managers shall have the power and authority to continue the activities and operations of the Company at levels comparable to the last approved Annual Operating Plan and shall be guided by the logic thereof while taking into account new circumstances.
(c) During any year for which an Annual Operating Plan has not been approved the Management Committee shall diligently and in good faith seek to approve an Annual Operating Plan for the remainder of such year and the following year, provided that a Manager's vote to approve any Annual Operating Plan shall be within the sole discretion of such Manager. If by the end of such year an Annual Operating Plan has not been approved for the following year, the Management Committee shall agree upon a budget necessary to maintain the Company's existing assets as would a prudent similarly situated company, including, without limitation, making any necessary repairs to and otherwise maintaining the Properties and the Initial Plant (the "Approved Minimum Budget"). If the Managers are unable to agree on the Minimum Budget the determination of the Minimum Budget shall be submitted to arbitration in accordance with the provisions of Article XVI, provided that a neutral "Big Six" accounting firm shall act as the sole arbitrator in lieu of three arbitrators. The Minimum Budget shall be redetermined from year to year using the procedure described above until the Management Committee approves an Annual Operating Plan" and . During the periods covered by a Minimum Budget, the Company shall consist make quarterly distributions of an "Approved O&M Plan" and an "Approved Operating all Available Cash (determined using the Minimum Budget".
(b) Owner shall give its approval or disapproval of the Annual Operating Plan no later than thirty (30) days after receipt thereof from Operator. If Owner objects to all or any portion of the proposed Annual Operating Plan, Owner shall furnish its objections in writing to Operator, and Owner and Operator shall amend such Annual Operating Plan in order to accommodate to Owner's satisfaction those items to which Owner objects.
(c) An Approved Annual Operating Plan shall constitute authorization for Operator to operate and maintain the Facility in accordance with such Approved Annual Operating Plan and the terms of this Agreement, it being recognized and agreed that Operator shall operate and maintain the Facility in a prudent and efficient manner so as to maximize both the current performance and the residual value of the Facility and shall endeavor to ensure that the actual costs of operating and maintaining the Facility are as low as reasonably practicable and in any event do not exceed the Approved Operating Budget either in total or, to the extent reasonably practicable, in any one budgetary category, Operator shall notify Owner as soon as reasonably possible of any significant deviations or discrepancies between the costs and expenses actually incurred by Operator during each Project Year and the costs and expenses projected Members pursuant to be incurred by Operator as set forth in the Approved Operating Budget for each such Project YearArticle VIII.
(d) In case of an actual emergency, any Manager may take on behalf of the event Operator desires Company any reasonable action he or she deems necessary to request an adjustment protect life or property, to an Approved protect the assets of the Company or to comply with applicable law, without approval of a Major Decision or any other necessary approval of the Management Committee if time does not permit obtaining such approval. A Manager taking such action shall promptly notify the other Managers and the Members of the emergency or unexpected expenditure.
(e) The Management Committee shall have the right to call for Additional Capital Contributions from the Members, pro rata to their respective Sharing Ratios, to pay for costs and expenses incurred by the Company and either (i) budgeted for in the current Annual Operating Plan but not incurred under the EPC Contract (capital calls to pay costs and expenses incurred under the EPC Contract may be made in accordance with Section 7.4), or (ii) incurred pursuant to Section 5.3(d). If the Management Committee approves an Additional Capital Contribution pursuant to this Section 5.3(e), the Chairman shall, as soon as practicable thereafter, deliver to each Member a Notice of Additional Capital Contribution. The required Additional Capital Contribution for each Member shall be calculated by multiplying the Required Capital by that Member's percentage Sharing Ratio. The Members shall be obligated to make such Additional Capital Contributions to the Company in immediately available funds on or before the date specified in the applicable Notice of Additional Capital Contributions.
(f) Following the approval of an Additional Capital Contribution pursuant to Section 5.3(e) to pay costs and expenses incurred in connection with any action taken pursuant to Section 5.3(d), any Member shall be entitled to contest the necessity for and reasonableness of such costs and expenses, if all of the Managers appointed by such Member voted not to approve such Additional Capital Contribution, by notice to the other Member within 15 calendar days of the date on which the decision approving the Additional Capital Contribution was passed by the Management Committee; provided that Crown (or any assignee of all or any portion Crown's interest in the Company) shall not be entitled to contest the reasonableness of any such cost or expense taken at any time during that Crown or any Affiliate of Crown is the Project Yearoperator under the Management Agreement unless MCNIC declared the emergency resulting in the incurrence of such cost or expense and MCNIC caused the Company to incur such cost or expense without the concurrence of Crown. In the event that disputes arising under the foregoing sentence are not resolved by negotiations among the Members, Operator shall submit a proposed revised Annual Operating Plan for Owner's consideration, which Owner shall approve or disapprove within fifteen (15) days after submission thereof. If the proposed revised Annual Operating Plan is disapproved by Owner within such fifteen (15) day period, Owner shall furnish Operator with the reasons for such disapproval and shall immediately begin discussions with Operator in an effort to reach a mutually agreeable revised Annual Operating Plan. Upon such agreement, Operator shall revise the Annual Operating Plan with respect thereto. Until the revised Annual Operating Plan is approved in writing by Owner, Operator shall not, except in an emergency as described in Section 2.6 hereof, act outside reasonableness of the Approved Annual Operating Plan for such Project Year without above described shall be determined by arbitration pursuant to Article XVI. The contesting Member shall not be obligated to make its share of the prior written consent of Owner. Once approved, Operator's authority as Additional Capital Contribution to the revised, or any additionally revised, Annual Operating Plan shall be extent the same as that authorized for the original Approved Annual Operating Plancontested costs and expenses are determined not to have been necessary and reasonable.
Appears in 1 contract
Annual Operating Plan. (a) Subject to the terms of the next succeeding sentence hereof, not later than one hundred twenty (120) days prior to the first day of each Project Year, Operator shall prepare and submit to Owner for approval a proposed operating and maintenance plan providing information for each month during the upcoming Project Year (the "O&M Plan"). The O&M Plan for the first Project Year shall be submitted to Owner for approval on the date on which this Agreement is executed unless previously submitted. The O&M Plan shall describe, in detail acceptable to Owner and on a monthly basis, anticipated maintenance and overhaul schedules, staffing plans, equipment acquisitions and spare parts and Consumables inventories (including a breakdown of capital items and expense items), schedules of subcontract services, plant performance data regarding required environmental performance, projected Fuel usage and such other matters as Owner may reasonably require. Any actions proposed under the O&M Plan shall be consistent with the Facility Data, the Operating Procedures, Prudent Utility Practices, the Related Agreements and this Agreement. Contemporaneously with the delivery of the O&M Plan, Operator shall submit to Owner a proposed budget for operating and maintaining the Facility during the upcoming Project Year (the "Operating Budget"), which shall include the estimated cost, based on time and materials and all fees contemplated in this Agreement, for all anticipated operating and maintenance services to be provided by Operator during each month of the upcoming Project Year in the account structure and format provided by Owner (the O&M Plan Manager has prepared and the Operating Budget are hereinafter sometimes together called the "Board has Approved (a “Annual Operating Plan")”) for the Fiscal Year including the Effective Date. When approved pursuant to subparagraph (b) below, The Manager shall prepare for the Annual Operating Plan shall be an "Approved Annual Operating Plan" and shall consist of an "Approved O&M Plan" and an "Approved Operating Budget".
(b) Owner shall give its approval or disapproval Approval of the Annual Operating Plan Board each Fiscal Year (no later than thirty (30) days after receipt thereof from Operatorbefore the Fiscal Year to which the Animal Operating Plan applies) an Annual Operating Plan for the next Fiscal Year, setting forth at a minimum the estimated receipts (including capital calls) and expenditures (capital, operating and other) of the Company in sufficient detail to provide an estimate of cash flow, capital proceeds, and other financial requirements of the Company for such year. If Owner objects to all Any such Annual Operating Plan shall also include such other information or any portion of other matters thought appropriate by the Manager or reasonably required by the Board. The Board shall review the proposed Annual Operating Plan, Owner Plan and shall furnish its objections in writing to Operator, and Owner and Operator shall amend such offer any revisions thereto within 10 days after receipt. After the final Annual Operating Plan in order to accommodate to Owner's satisfaction those items to which Owner objects.
(c) An has been Approved Annual Operating Plan by Two Thirds Vote of the Board, the Manager shall constitute authorization for Operator to operate and maintain implement the Facility in accordance with such Approved Annual Operating Plan and shall be authorized to make only the terms of this Agreementexpenditures and incur only the obligations provided for therein. Notwithstanding the foregoing, it being recognized and agreed that Operator shall operate and maintain the Facility Manager may make any expenditure or incur any obligation, whether or not such expenditure or obligation is provided for in a prudent and efficient manner so as to maximize both an Annual Operating Plan, which is the current performance and the residual value legal obligation of the Facility Company and shall endeavor to ensure that not within the actual costs reasonable control of operating and maintaining the Facility are as low as Managers (e.g., real or personal property taxes). If the Board, acting reasonably practicable and in any event do good faith, is not exceed the Approved Operating Budget either in total or, able to the extent reasonably practicable, in any one budgetary category, Operator shall notify Owner as soon as reasonably possible of any significant deviations or discrepancies between the costs and expenses actually incurred by Operator during each Project Year and the costs and expenses projected to be incurred by Operator as set forth in the Approved Operating Budget for each such Project Year.
(d) In the event Operator desires to request agree on an adjustment to an Approved Annual Operating Plan at any time during the Project Year, Operator shall submit a proposed revised Annual Operating Plan for Owner's considerationany year, each line item in the Annual Operating Plan for the prior year shall be increased by the percentage increase in the CPI Index from the first day for which Owner shall approve or disapprove within fifteen (15) days after submission thereof. If the proposed revised previous Annual Operating Plan was in effect to the first day for which the new Annual Operating Plan is disapproved by Owner within such fifteen (15) day periodto be in effect. If the CPI Index is no longer published, Owner published less frequently, or altered in some other manner, then the Manager shall, from time to time, adopt a substitute index or substitute procedure which reasonably reflects and monitors consumer prices, and the resulting plan shall furnish Operator with the reasons for such disapproval and shall immediately begin discussions with Operator in an effort to reach a mutually agreeable revised Annual Operating Plan. Upon such agreement, Operator shall revise be the Annual Operating Plan with respect thereto. Until the revised Annual Operating Plan is approved in writing by Owner, Operator shall not, except in an emergency as described in Section 2.6 hereof, act outside of the Approved Annual Operating Plan for such Project Year without the prior written consent of Owner. Once approved, Operator's authority as to the revised, or any additionally revised, Annual Operating Plan shall be the same as that authorized for the original Approved Annual Operating Plancurrent year.
Appears in 1 contract
Annual Operating Plan. (a) Subject to the terms of the next --------------------- succeeding sentence hereof, not later than one hundred twenty (120) days prior to the first day of each Project Year, Operator shall prepare and submit to Owner for approval a proposed operating and maintenance plan providing information for each month during the upcoming Project Year (the "O&M Plan"). The O&M Plan for the first Project Year shall be submitted to Owner for approval on the date on which this Agreement is executed unless previously submitted. The O&M Plan shall describe, in detail acceptable to Owner and on a monthly basis, ; anticipated maintenance and overhaul schedules, staffing plans, equipment acquisitions and spare parts and Consumables inventories (including a breakdown of capital items and expense items), schedules of subcontract services, plant performance data regarding required environmental performance, projected Fuel usage and such other matters as Owner may reasonably require. Any actions proposed under the O&M Plan shall be consistent with the Facility Data, the Operating Procedures, Prudent Utility Practices, the Related Agreements and this Agreement. Contemporaneously with the delivery of the O&M Plan, Operator shall submit to Owner a proposed budget for operating and maintaining the Facility during the upcoming Project Year (the "Operating Budget"), which shall include the estimated cost, based on time and materials and all fees contemplated in this Agreement, for all anticipated operating and maintenance services to be provided by Operator during each month of the upcoming Project Year in the account structure and format provided by Owner (the O&M Q&CM Plan and the Operating Budget are hereinafter sometimes together called the "Annual Operating Plan"). When approved pursuant to subparagraph (b) below, the Annual Operating Plan shall be an "Approved Annual Operating Plan" and shall consist of an "Approved O&M Plan" and an "Approved Operating Budget".
(b) Owner shall give its approval or disapproval of the Annual Operating Plan no later than thirty (30) days after receipt thereof from Operator. If Owner objects to all or any portion of the proposed Annual Operating Plan, Owner shall furnish its objections in writing to Operator, and Owner and Operator shall amend such Annual Operating Plan in order to accommodate to Owner's satisfaction those items to which Owner objects.
(c) An Approved Annual Operating Plan shall constitute authorization for Operator to operate and maintain the Facility in accordance with such Approved Annual Operating Plan and the terms of this Agreement, it being recognized and agreed that Operator shall operate and maintain the Facility in a prudent and efficient manner so as to maximize both the current performance and the residual value of the Facility and shall endeavor to ensure that the actual costs of operating and maintaining the Facility are as low as reasonably practicable and in any event do not exceed the Approved Operating Budget either in total or, to the extent reasonably practicable, in any one budgetary category, . Operator shall notify Owner as soon as reasonably possible of any significant deviations or discrepancies between the costs and expenses actually incurred by Operator during each Project Year and the costs and expenses projected to be incurred by Operator as set forth in the Approved Operating Budget for each such Project Year.
(d) In the event Operator desires to request an adjustment to an Approved Annual Operating Plan at any time during the Project Year, Operator shall submit a proposed revised Annual Operating Plan for Owner's consideration, which Owner shall approve or disapprove within fifteen (15) days after submission thereof. If the proposed revised Annual Operating Plan is disapproved by Owner within such fifteen (15) day period, Owner shall furnish Operator with the reasons for such disapproval and shall immediately begin discussions with Operator in an effort to reach a mutually agreeable revised Annual Operating Plan. Upon such agreement, Operator shall revise the Annual Operating Plan with respect thereto. Until the revised Annual Operating Plan is approved in writing by Owner, Operator shall not, except in an emergency as described in Section 2.6 hereof, act outside of the Approved Annual Operating Plan for such Project Year without the prior written consent of Owner. Once approved, Operator's authority as to the revised, or any additionally revised, Annual Operating Plan shall be the same as that authorized for the original Approved Annual Operating Plan.
Appears in 1 contract
Samples: Operation and Maintenance Agreement (Cogen Technologies Inc)
Annual Operating Plan. (a) Subject to the terms of the next succeeding sentence hereof, not later than one hundred twenty eighty (120180) days prior to the Turnover Date and not later than one hundred eighty (180) days prior to the first day of each Project Year, Operator shall shall, prepare and submit to Owner for approval a proposed operating and maintenance plan providing information for each month during the upcoming Project Year (the "O&M Plan"). The O&M Plan for ) and a five-year projection of operating and capital budgets ("Five-Year Projection") as such term is used in Section 6.2A of the first Project Year shall be submitted to Owner for approval on the date on which this Agreement is executed unless previously submittedEnergy Services Agreement. The O&M Plan shall describe, in detail acceptable to Owner and on a monthly basis, anticipated maintenance and overhaul schedules, staffing plans, ; equipment acquisitions and spare parts and Consumables inventories (including a breakdown of capital items and expense items), schedules of subcontract services, plant performance data regarding required environmental performance, projected Fuel usage and such other matters as Owner may reasonably require. Any actions proposed under the O&M Plan shall be consistent with the Facility Data, the Operating Procedures, Prudent Utility Practices, the Related Agreements and this Agreement. Contemporaneously with the delivery of the O&M Plan, Operator shall submit to Owner a proposed budget for operating and maintaining the Facility during the upcoming Project Year (the "Operating Budget"), which shall shall, include the estimated cost, based on time and materials and all fees contemplated in this Agreement, for all anticipated operating and maintenance services to be provided by Operator during each month of the upcoming Project Year in the account structure and format provided by Owner (the O&M Plan and the Operating Budget are hereinafter sometimes together called the "Annual Operating Plan"). When approved pursuant to subparagraph (b) below, the Annual Operating Plan shall be an "Approved Annual Operating Plan" and shall consist of an "Approved O&M Plan" and an "Approved Operating Budget".
(b) Owner shall give its approval or disapproval of the Annual Operating Plan no later than thirty (30) days after receipt thereof from Operator. If Owner objects to all or any portion of the proposed Annual Operating Plan, Owner shall furnish its objections in writing to Operator, and Owner and Operator shall amend such Annual Operating Plan in order to accommodate to Owner's satisfaction those items to which Owner objects.
(c) An Approved Annual Operating Plan shall constitute authorization for Operator to operate and maintain the Facility in accordance with such Approved Annual Operating Plan and the terms of this Agreement, it being recognized and agreed that Operator shall operate and maintain the Facility in a prudent and efficient manner so as to maximize both the current performance and the residual value of the Facility and shall endeavor to ensure that the actual costs of operating and maintaining the Facility are as low as reasonably practicable and in any event do not exceed the Approved Operating Budget either in total or, to the extent reasonably practicable, in any one budgetary category, . Operator shall notify Owner as soon as reasonably possible of any significant deviations or discrepancies between the costs and expenses actually incurred by Operator during each Project Year and the costs and expenses projected to be incurred by Operator as set forth in the Approved Operating Budget for each such Project Year.
(d) In the event Operator desires to request an adjustment to an Approved Annual Operating Plan at any time during the Project Year, Operator shall submit a proposed revised Annual Operating Plan for Owner's consideration, which Owner shall approve or disapprove within fifteen (15) days after submission thereof. If the proposed revised Annual Operating Plan is disapproved by Owner within such fifteen (15) day period, Owner shall furnish Operator with the reasons for such disapproval and shall immediately begin discussions with Operator in an effort to reach a mutually agreeable revised Annual Operating Plan. Upon such agreement, Operator shall revise the Annual Operating Plan with respect thereto. Until the revised Annual Operating Plan is approved in writing by Owner, Operator shall not, except in an emergency as described in Section 2.6 hereof, act outside of the Approved Annual Operating Plan for such Project Year without the prior written consent of Owner. Once approved, Operator's authority as to the revised, or any additionally revised, Annual Operating Plan shall be the same as that authorized for the original Approved Annual Operating Plan.
Appears in 1 contract
Samples: Operation and Maintenance Agreement (East Coast Power LLC)
