Common use of Budget Approval Clause in Contracts

Budget Approval. 1.6.1 Prior to the construction of any new building on the Premises, Company shall submit to Lessor copies of a written construction budget for such new building. Each such budget will show all projected Project Costs related to the design, construction, financing and leasing of such new building. 1.6.1.1 Within fifteen (15) days of receipt of the proposed budget, the LDR will review and approve or disapprove the proposed budget submitted by the Company. If the LDR does not respond in writing within fifteen (15) days, the budget shall be deemed to be the Approved Budget. 1.6.1.1.1 If disapproved, the LDR will inform Company in writing of its disapproval describing the disapproved provisions of the proposed budget or requesting further clarification of the budget elements. Company will respond within fourteen (14) days with verification of the budget elements or with a modified written budget that is reasonably satisfactory to the LDR. The Participating Parties agree to negotiate in good faith to resolve any conflicting issues that may arise. If the LDR fails to timely respond, the proposed budget will be deemed approved and will become an Approved Budget. 1.6.1.1.1.1 If, however, the Participating Parties cannot agree upon the provisions of the proposed budget and/or the elements contained in the proposed budget, or, if following approval of the Approved Budget, disputes arise concerning the Approved Budget which the Parties are unable to resolve through good faith negotiation, a neutral third party with at least ten 10 years experience in real estate developments similar to those constructed or proposed to be constructed on the Premises will be selected by the LDR to arbitrate the disputed terms. 1.6.1.1.1.2 If, however, the Company does not accept the neutral third party selected by the LDR, Company will be allowed to select a second neutral party with similar experience. The two selected parties will then select a third neutral party with at least ten 10 years experience in real estate developments similar to those constructed or proposed to be constructed on the Premises who will arbitrate the disputed terms. 1.6.1.1.1.3 The LDR and Company agree to be bound by the decisions reached by the selected arbitrator(s). The Participating Parties will cause the arbitrator(s) to make a determination within fourteen (14) days following submittal. 1.6.1.1.1.4 The Participating Parties agree that each will bear its own costs and expenses incurred for attorney’s fees and all other preparation and presentation costs for the arbitration process. If only one arbitrator is selected, the Participating Parties will equally share the cost of such arbitrator. If three arbitrators are used, each Party will bear the cost of the arbitrator selected by it and the Participating Parties will equally share the cost of any third arbitrator. 1.6.1.2 The agreed upon budget will be deemed the Approved Budget for the proposed building. 1.6.2 Company will be entitled to expend funds in accordance with the Approved Budget for the construction of the proposed building. The cost of constructing any such building shall be a Project Cost. In the event Company is over-budget on a particular line item, Company may reallocate excess funds from one line item to another line item to cover any short falls in any line item. Any expenses not covered by the Approved Budget which increase the total cost of constructing such building by more than ten percent (10%) are subject to the reasonable written approval of LDR. Any Equity Contribution required to cover any such additional Project Cost shall be the responsibility of Company.

Appears in 4 contracts

Samples: Lease Agreement, Lease Agreement, Lease Agreement

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Budget Approval. 1.6.1 Prior A written budget for each calendar year during the term of this Agreement will be prepared for all expenses related to the construction use, maintenance and operation of any new building on the Premises, including, without limitation, maintenance, operation, administration, leasing and other fees and expenses of any nature as follows: 1.6.1.1 On or within thirty (30) days following substantial completion of the Commercial Facilities, Company shall and CDR will agree upon an initial budget to cover the period from the Effective Date until December 31 of the year in which the Effective Date falls. 1.6.1.2 By October 15, annually, Company will prepare and submit to Lessor copies of CDR a written construction budget for such new building. Each such budget will show all projected Project Costs related to the design, construction, financing and leasing of such new buildingfollowing calendar year. 1.6.1.1 1.6.1.3 Within fifteen fourteen (1514) days of receipt of the proposed budget, the LDR CDR will review and approve or disapprove the proposed budget submitted by the Company. If the LDR does not respond in writing within fifteen (15) days, the budget shall be deemed to be the Approved Budget. 1.6.1.1.1 1.6.1.3.1 If disapproveddisapproved on reasonable grounds, the LDR CDR will inform Company in writing of its disapproval disapproval, describing the disapproved provisions of the proposed budget budget, or requesting further clarification of the budget elements. Company will respond within Within fourteen (14) days with verification clarification of the budget elements or with a modified written budget that budget, which is reasonably satisfactory to the LDRCDR. The Participating Parties agree to negotiate in good faith to resolve any conflicting issues that may arise. If the LDR CDR fails to timely respond, the proposed budget will be deemed approved and will become an Approved Budget. 1.6.1.1.1.1 1.6.1.3.2 If, however, the Participating Parties cannot agree upon the provisions of the proposed budget and/or the elements contained in the proposed budgetbudget or if, orduring the term of the following year, if following approval the parties cannot agree upon the interpretation of the intent of the Approved Budget, disputes arise concerning the Approved Budget which the Parties are unable to resolve through good faith negotiation, a neutral third party with at least ten 10 years experience in real estate developments similar to those constructed or proposed to be constructed on the Premises will be selected by the LDR CDR to arbitrate the disputed terms. 1.6.1.1.1.2 1.6.1.3.2.1 If, however, the Company does not accept the neutral third party selected by the LDRCDR, Company will be allowed to select a second neutral party with similar experienceparty. The two selected parties will then select a third neutral party with at least ten 10 years experience in real estate developments similar to those constructed or proposed to be constructed on and the Premises who three together will arbitrate the disputed terms. County agrees that Company may operate under the prior year Approved Budget until the dispute is resolved. All neutral parties shall have at least five (5) years experience in commercial real estate matters and must be attorney(s) certified by the Nevada Court Annexed Arbitration Program. 1.6.1.1.1.3 The LDR 1.6.1.3.2.2 CDR and Company agree to be bound by the decisions reached by the selected arbitrator(s)arbitrator. The Participating Parties will cause the arbitrator(s) arbitrator to make a determination within fourteen (14) days following submittal. 1.6.1.1.1.4 1.6.1.3.2.3 The Participating Parties agree that each party will bear its own costs and expenses incurred for attorney’s fees and all other 's fees, preparation and presentation costs for the arbitration process. If only one arbitrator is selected, the The Participating Parties will equally share the cost of such arbitrator. If three arbitrators are used, each Party will bear the cost of the arbitrator selected by it and the Participating Parties will equally share the cost of any third arbitrator. 1.6.1.2 1.6.1.4 The agreed upon budget will be deemed the Approved Budget for the proposed buildingapplicable calendar year. Until a budget has been approved, the prior year's budget will be used. 1.6.2 Company will be entitled to expend funds in accordance with the Approved Budget for during the construction of the proposed building. The cost of constructing any such building shall be a Project Costapplicable calendar year. In the event Company is over-budget on a particular line item, Company may reallocate excess funds from one line item to another line item, except that any salary line item to cover any short falls in any line itemreallocations must be approved by CDR. Any expenses not covered by the Approved Budget which increase the total cost of constructing such building by more than ten percent (10%) are subject to the reasonable written approval of LDRCDR. Any Equity Contribution required In the event of emergency, Company may immediately take action necessary to cover complete repair and any such additional Project Cost shall expenses incurred by Company will be shared in accordance with the responsibility provisions of CompanySection 1.7 (entitled RENTALS AND FEES) below.

Appears in 1 contract

Samples: Lease Agreement (Sierra Pacific Resources /Nv/)

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