Business Plan and Budgets. (a) Prior to the date hereof, MGM has prepared and delivered to DW for its review and approval, (i) the Construction Budget, (ii) a pre-opening budget for the Project and (iii) a written, detailed business plan for the Project setting forth the proposed development, construction, management, financing, operation, leasing and/or sale plans for the Project. The business plan is incorporated herein by reference and has been jointly approved by the Members, as of the Signing Date, and together with the other components described in clauses (i), (ii) and (iii) shall be referred to herein as the “Initial Business Plan”. The Managing Member shall deliver, or cause to be delivered, to DW (I) on the Closing Date, (II) prior to the beginning of each Fiscal Year and at (III) such other times as determined by the Managing Member, an updated Business Plan for the Project, containing the components described in clauses (ii), (iii) and (iv) of this Section 7.9(a). Any modifications to the previously approved Business Plan shall be subject to the Approval of the Board of Directions to the extent required in accordance with Section 9.3 of this Agreement. (b) At least ninety (90) days prior to the estimated completion of the Project and at the beginning of each Fiscal Year thereafter, the Managing Member shall cause the Operations Manager to prepare and submit to the Board of Directors for its review, (i) a preliminary Annual Budget for each Project Component for the upcoming Fiscal Year and (ii) a proposed business plan for each Project Component (x) setting forth the proposed, financing, operation, leasing and/or sale plans with respect to the applicable Project Component and (y) including, without limitation, (1) a detailed description of the anticipated rents and operating expenses, the maintenance and repair of the applicable Project Component and any planned or required improvements to such Project Component and (2) a detailed marketing report, which, at a minimum, sets forth a list of expected vacancies and a description of anticipated rents or other revenues over the applicable year and any related costs and expenses. Such business plan, once Approved by the Representatives on the Board of Directors in accordance with Section 9.3 of this Agreement shall be referred to herein as a “Business Plan” and, collectively, the “Business Plans” for the applicable Project Component. Each Annual Budget shall show all projected expenditures for operating expenses and capital improvements and all projected revenues from any source for the Project Component covered by such Annual Budget. In addition, each such Annual Budget shall be prepared on both a cash and accrual basis and shall be in a form that has been Approved by the Board of Directors. All projections in each Annual Budget shall be done on a monthly basis. The Members acknowledge that the preliminary Annual Budget for a Project Component provided pursuant to this Section 7.9(b) will necessarily reflect only preliminary estimates of items of income and expense, and is subject to subsequent revision as contemplated by subclause (e) below. (c) Prior to the beginning of each Fiscal Year after completion of the Project, the Managing Member shall submit to the Board of Directors for its review, a revised Annual Budget for each Project Component. Such revised Annual Budget shall take into account changes, if any, suggested by the Members and/or the Board of Directors and any other circumstances of which the Managing Member has become aware since the distribution of the prior Annual Budget for such Project Component. Such revised Annual Budget, once Approved by the Board of Directors in accordance with Section 9.3 of this Agreement shall replace the prior Annual Budget for such Project Component. (d) If the Board of Directors is unable to agree upon a Business Plan or Annual Budget prior to the first day of the Fiscal Year in question, then each Member, agreeing to use all good faith, commercially reasonable efforts to do so and subject to the terms of any Financing Documents then in effect, shall provide for the Business Plan and Annual Budget for such Project Component in effect for the Fiscal Year then expiring to be utilized until a new Business Plan and/or Annual Budget, as applicable, has been Approved, with the line items in such expiring Business Plan or Annual Budget that have not been Approved by the Board of Directors to be adjusted as follows: (x) insurance, taxes, common charges, utilities, debt service, labor expenses and required capital expenditures (necessary to comply with any applicable laws or existing contractual obligations) shall each be adjusted to actual amounts, (y) all capital and non-recurring items (other than the aforesaid required expenditures) for the current calendar year in such Annual Budget shall remain the same as in the expiring Annual Budget, and (z) all other expense line items shall be adjusted by an amount equal to the CPI Annual Percentage Increase (as hereinafter defined) as of the date of the expiring Annual Budget. The line items in the Business Plan and/or Annual Budget has have been Approved by the Board of Directors shall replace the applicable line items in the prior Business Plan and/or Annual Budget. The “CPI Annual Percentage Increase” computed as of a particular calendar month shall be equal to the percentage difference between the CPI for such calendar month and the CPI for the calendar month which is twelve (12) months prior to such calendar month. The Managing Member shall be entitled to make expenditures of Company funds in accordance with the foregoing. (e) After the Closing Date, no less often than four (4) times per year, but in no event later than February 10, May 10, August 10 and November 10 of each year, the Managing Member shall prepare, or cause to be prepared, and submit to the Board of Directors for its review, updated sales projections for the condominiums and condo-hotel units at the Project with variance calculations indicating the differences in average sales price and sales volume for the condominium and condo-hotel units compared to the most recently Approved Business Plan. (f) If the proposed Business Plan and Annual Budget for a Project Component are each Approved by the Board of Directors, then the same shall be the Business Plan and Annual Budget for such Project Component for the next Fiscal Year. Notwithstanding anything to the contrary set forth herein, at any time prior to the day which is sixty (60) days before the beginning of the Fiscal Year to which the proposed Business Plan and Annual Budget for a Project Component relate, if either Member becomes aware of circumstances that require a change to such proposed Business Plan or Annual Budget, then the Managing Member shall submit a revised Business Plan and/or Annual Budget for such Project Component to the Board of Directors for its Approval. (g) The Managing Member shall be obligated to keep DW and the Board of Directors advised of material changes to the Plans (and the anticipated effect of such changes on the applicable Construction Budget) and the Approval of the Board of Directors shall be required for any material scope changes or other material modifications to the Plans.
Appears in 2 contracts
Samples: Limited Liability Company Agreement (Dubai World), Limited Liability Company Agreement (MGM Mirage)
Business Plan and Budgets. (a) Prior to the date hereof, MGM has prepared and delivered to DW for its review and approval, (i) the Construction Budget, (ii) a pre-opening budget for the Project and (iii) a written, detailed business plan for the Project setting forth the proposed development, construction, management, financing, operation, leasing and/or sale plans for the Project. The business plan is incorporated herein by reference and has been jointly approved by the Members, as of the Signing Date, and together with the other components described in clauses (i), (ii) and (iii) shall be referred to herein as the “Initial Business Plan”. The Managing Member shall deliver, or cause to be delivered, to DW (I) on the Closing Date, (II) prior to the beginning of each Fiscal Year and at (III) such other times as determined by the Managing Member, an updated initial Business Plan for the Project, containing Company is attached hereto as Exhibit A (the components described in clauses (ii), (iii) and (iv) of this Section 7.9(a"Initial Business Plan"). Any modifications The FGIC Member and the COPs Trust Members at the direction of the Majority of Holders hereby agree that the Initial Business Plan has been approved as a Major Decision pursuant to Section 4.5(a)(l). The Business Plan in effect at any time may be amended, modified or supplemented from time to time by the FGIC Member; provided, however, that any material amendment, modification or supplement to the previously approved Business Plan shall only be subject effective if approved as a Major Decision pursuant to Section 4.5(a)(2). The FGIC Member shall provide any such amended, modified or supplemented Business Plan to the Approval of COPs Trust Members (which Business Plan shall then replace the Board of Directions Business Plan in effect prior to the extent required in accordance with Section 9.3 of this Agreementsuch time).
(ba) At least ninety (90) days prior On or before March 3 1 , 201 6, the FGIC Member shall prepare and deliver to the estimated completion of Designated Representative and each Restricted COPs Holder a Budget with respect to the Project 201 6 Fiscal Year that is not inconsistent with the Business Plan. On or before December 1 5, 201 6 and at the beginning on or before December 1 5th of each Fiscal Year thereafter, the Managing FGIC Member shall cause the Operations Manager to prepare and submit deliver to the Board of Directors for its review, (i) Designated Representative and each Restricted COPs Holder a preliminary Annual Budget for each Project Component for the upcoming Fiscal Year and (ii) a proposed business plan for each Project Component (x) setting forth the proposed, financing, operation, leasing and/or sale plans with respect to the applicable Project Component and (y) including, without limitation, (1) a detailed description of the anticipated rents and operating expenses, the maintenance and repair of the applicable Project Component and any planned or required improvements to such Project Component and (2) a detailed marketing report, which, at a minimum, sets forth a list of expected vacancies and a description of anticipated rents or other revenues over the applicable year and any related costs and expenses. Such business plan, once Approved by the Representatives on the Board of Directors in accordance with Section 9.3 of this Agreement shall be referred to herein as a “Business Plan” and, collectively, the “Business Plans” for the applicable Project Component. Each Annual Budget shall show all projected expenditures for operating expenses and capital improvements and all projected revenues from any source for the Project Component covered by such Annual Budget. In addition, each such Annual Budget shall be prepared on both a cash and accrual basis and shall be in a form that has been Approved by the Board of Directors. All projections in each Annual Budget shall be done on a monthly basis. The Members acknowledge that the preliminary Annual Budget for a Project Component provided pursuant to this Section 7.9(b) will necessarily reflect only preliminary estimates of items of income and expense, and is subject to subsequent revision as contemplated by subclause (e) below.
(c) Prior to the beginning of each following Fiscal Year after completion of the Project, the Managing Member shall submit to the Board of Directors for its review, a revised Annual Budget for each Project Component. Such revised Annual Budget shall take into account changes, if any, suggested by the Members and/or the Board of Directors and any other circumstances of which the Managing Member has become aware since the distribution of the prior Annual Budget for such Project Component. Such revised Annual Budget, once Approved by the Board of Directors in accordance with Section 9.3 of this Agreement shall replace the prior Annual Budget for such Project Component.
(d) If the Board of Directors that is unable to agree upon a Business Plan or Annual Budget prior to the first day of the Fiscal Year in question, then each Member, agreeing to use all good faith, commercially reasonable efforts to do so and subject to the terms of any Financing Documents then in effect, shall provide for the Business Plan and Annual Budget for such Project Component in effect for the Fiscal Year then expiring to be utilized until a new Business Plan and/or Annual Budget, as applicable, has been Approved, not inconsistent with the line items in such expiring Business Plan or Annual Budget that have not been Approved by the Board of Directors to be adjusted as follows: (x) insurance, taxes, common charges, utilities, debt service, labor expenses and required capital expenditures (necessary to comply with any applicable laws or existing contractual obligations) shall each be adjusted to actual amounts, (y) all capital and non-recurring items (other than the aforesaid required expenditures) for the current calendar year in such Annual Budget shall remain the same as in the expiring Annual Budget, and (z) all other expense line items shall be adjusted by an amount equal to the CPI Annual Percentage Increase (as hereinafter defined) as of the date of the expiring Annual Budget. The line items in the Business Plan and/or Annual Budget has have been Approved by the Board of Directors shall replace the applicable line items in the prior Business Plan and/or Annual Budget. The “CPI Annual Percentage Increase” computed as of a particular calendar month shall be equal to the percentage difference between the CPI for such calendar month and the CPI for the calendar month which is twelve (12) months prior to such calendar month. The Managing Member shall be entitled to make expenditures of Company funds in accordance with the foregoing.
(e) After the Closing Date, no less often than four (4) times per year, but in no event later than February 10, May 10, August 10 and November 10 of each year, the Managing Member shall prepare, or cause to be prepared, and submit to the Board of Directors for its review, updated sales projections for the condominiums and condo-hotel units at the Project with variance calculations indicating the differences in average sales price and sales volume for the condominium and condo-hotel units compared to the most recently Approved Business Plan.
(fb) The FGIC Member shall have the right, without the consent or approval of the COPs Trust Members or any COPs Holder, to update and amend the Budget from time to time and to provide such updated and amended Budget to the Designated Representative and to each Restricted COPs Holder (which updated and amended Budget shall then replace the Budget in effect prior to such time) provided that any Budget shall not be inconsistent with the Business Plan.
( 1 ) If the proposed Business Plan and Annual a Budget for a Project Component are each Approved any Fiscal Year has not been provided in writing by the Board FGIC Member to the Designated Representative and the Restricted COPs Holders pursuant to Section 4.6(a) above by the commencement of Directorssuch Fiscal Year, then the same Company shall continue to operate under the Budget for the previous Fiscal Year until a new Budget, as provided by this Section 4.6, has been provided by the FGIC Member, except as follows: (A) the Budget for any non-discretionary expenditures over which the Company and the Subsidiaries have no reasonable control, such as insurance premiums for then existing coverage, interest and principal due to then existing creditors of the Company or any Subsidiary, and non-discretionary amounts payable pursuant to the terms of then existing contracts by which the Company or any Subsidiary is bound (collectively, "Non-Controllable Items"), shall be the Business Plan and Annual Budget amount required to pay such items, and, (B) the budget for such Project Component for any other items that are not Non-Controllable Items or capital expenditures shall be the next Fiscal Year. Notwithstanding anything to the contrary applicable amount set forth herein, at any time prior to in the day which is sixty (60) days before the beginning of the Fiscal Year to which the proposed Business Plan and Annual Budget for a Project Component relate, if either Member becomes aware of circumstances that require a change to such proposed Business Plan or Annual then most recent Budget, then such amounts in (B) being adjusted for inflation as reflected in the Managing Member shall submit a revised Business Plan and/or Annual Budget for such Project Component to Consumer Price Index - All Urban Consumer (U.S . City - All Items) since the Board of Directors for its Approval.
(g) The Managing Member shall be obligated to keep DW and the Board of Directors advised of material changes to the Plans (and the anticipated effect date of such changes on most recent approved Budget and (C) the applicable Construction Budget) and unexpended portion of any capital expenditures in the Approval of the Board of Directors then most recent Budget shall be required for any material scope changes or other material modifications to the Planscontinue.
Appears in 1 contract
Samples: Limited Liability Company Agreement
Business Plan and Budgets. (a) Prior Within thirty (30) days of the Closing Date, the Managing Member shall prepare and deliver, or shall cause to the date hereof, MGM has be prepared and delivered delivered, to DW IW for its review and approval, (i) the Construction Budget, (ii) a pre-opening budget for the Project and (iii) a written, detailed business plan for the Project setting forth the proposed development, construction, management, financing, operation, leasing and/or and sale plans for the Project. The business plan is incorporated herein by reference and has been jointly approved by the Members, as of the Signing Date, and together with the other components described in clauses (i), (ii) and (iii) shall be referred to herein as the “Initial Business Plan”. The Managing Member shall deliver, or cause to be delivered, to DW IW (I) on the Closing Date, (II) prior to the beginning of each Fiscal Year and (II) at (III) such other times as determined by the Managing MemberBoard of Directors, an updated Business Plan business plan for the Project, containing including the components described in clauses Construction Budget, (ii), ) a pre-opening budget for the Project and (iii) a written, detailed business plan for the Project setting forth the proposed development, construction, management, financing, operation, leasing and sale plans for the Project (iv) of this Section 7.9(acollectively, the “Project Business Plan”). Any modifications to the previously approved Project Business Plan shall be subject to the Approval of the Board of Directions to the extent required Directors in accordance with Section 9.3 of this Agreementhereof.
(b) At least ninety (90) days prior to the estimated completion of the Project and at the beginning of each Fiscal Year thereafterYear, the Managing Member shall cause the Operations Manager to prepare and submit to the Board of Directors for its reviewreview and approval, (i) a preliminary Annual Budget proposed annual budget for each Project Component for the upcoming Fiscal Year and (ii) a proposed business plan for each Project Component (x) setting forth the proposed, financing, operation, leasing and/or sale plans with respect to the applicable Project Component and (y) including, without limitation, (1) a detailed description of the anticipated rents and operating expenses, the maintenance and repair of the applicable Project Component and any planned or required improvements to such Project Component and (2) a detailed marketing report, which, at a minimum, sets forth a list of expected vacancies and a description of anticipated rents or other revenues over the applicable year and any related costs and expenses. Such business plan, once Approved by the Representatives on the Board of Directors in accordance with Section 9.3 of this Agreement hereof shall be referred to herein as a “Component Business Plan” and, collectively, the “Component Business Plans” for the applicable Project Component. Each Annual Budget proposed annual budget shall show all projected expenditures for operating expenses and capital improvements and all projected revenues from any source for the Project Component covered by such Annual Budgetannual budget. In addition, each such Annual Budget annual budget shall be prepared on both a cash and accrual basis and shall be in a form that has been Approved by the Board of Directors. All projections in each Annual Budget proposed annual budget shall be done on a monthly basis. The Members acknowledge that the preliminary Annual Budget annual budget for a Project Component provided pursuant to this Section 7.9(b7.8(b) will necessarily reflect only preliminary estimates of items of income and expense, and is subject to subsequent revision as contemplated by subclause (e) below.
(c) Prior At least ninety (90) days prior to the beginning of each Fiscal Year after completion of the ProjectYear, the Managing Member shall submit to the Board of Directors for its reviewreview and approval, a revised Annual Budget annual budget for each Project Component. Such revised Annual Budget annual budget shall take into account changes, if any, suggested by the Members and/or the Board of Directors and any other circumstances of which the Managing Member has become aware since the distribution of the prior Annual Budget for such Project Component. Such revised Annual Budgetannual budget, once Approved by the Board of Directors in accordance with Section 9.3 of this Agreement hereof shall replace the prior Annual Budget for such Project Component.
(d) If the Board of Directors is unable to agree upon a Business Plan business plan or Annual Budget annual budget prior to the first day of the Fiscal Year in question, then each Member, agreeing to use all good faith, commercially reasonable efforts to do so and subject to the terms of any Financing Documents then in effect, shall provide for the Business Plan and Annual Budget for such Project Component in effect for the Fiscal Year then expiring to be utilized until a new Business Plan business plan and/or Annual Budgetannual budget, as applicable, has been Approved, with the line items in such expiring Business Plan or Annual Budget that have not been Approved by the Board of Directors to be adjusted as follows: (x) insurance, taxes, common charges, utilities, debt service, labor expenses and required capital expenditures (necessary to comply with any applicable laws or existing contractual obligationsContractual Obligations) shall each be adjusted to actual amounts, (y) all capital and non-recurring items (other than the aforesaid required expenditures) for the current calendar year in such Annual Budget annual budget shall remain the same as in the expiring Annual Budget, and (z) all other expense line items shall be adjusted by an amount equal to the CPI Annual Percentage Increase (as hereinafter defined) as of the date of the expiring Annual Budget. The line items in the Business Plan business plan and/or Annual Budget has annual budget that have been Approved by the Board of Directors shall replace the applicable line items in the prior Business Plan and/or Annual Budget. The “CPI Annual Percentage Increase” computed as of a particular calendar month shall be equal to the percentage difference between the CPI for such calendar month and the CPI for the calendar month which is twelve (12) months prior to such calendar month. The Managing Member shall be entitled to make expenditures of Company funds in accordance with the foregoing.
(e) After the Closing Date, no less often than four (4) times per year, but in no event later than February 10, May 10, August 10 and November 10 of each year, the Managing Member shall prepare, or cause to be prepared, and submit to the Board of Directors for its review, updated sales projections for the residential units (including condominiums and condo-hotel units units) at the Project with variance calculations indicating the differences in average sales price and sales volume for the condominium and condo-hotel residential units compared to the most recently Approved approved Business Plan.
(f) If the proposed Business Plan business plan and Annual Budget annual budget for a Project Component are each Approved by the Board of Directors, then the same shall be the Business Plan and Annual Budget for such Project Component for the next Fiscal Year. Notwithstanding anything to the contrary set forth herein, at any time prior to the day which is sixty (60) days before the beginning of the Fiscal Year to which the proposed Business Plan business plan and Annual Budget annual budget for a Project Component relate, if either Member becomes aware of circumstances that require a change to such proposed Business Plan business plan or Annual Budgetannual budget, then the Managing Member shall submit a revised Business Plan business plan and/or Annual Budget annual budget for such Project Component to the Board of Directors for its Approval.
(g) The Managing Member shall be obligated to keep DW IW and the Board of Directors advised of material changes to the Plans (and the anticipated effect of such changes on the applicable Construction Budget) and the Approval of the Board of Directors shall be required for any material scope changes or other material modifications to the Plans
(h) The Managing Member shall promptly provide copies of the respective budgets approved pursuant to Section 9.3(a)(iv) hereof to the respective Operations Managers and shall provide reasonable oversight in respect of implementation of the respective budgets.
(i) The Board of Directors shall at least on a quarterly basis discuss all aspects of the Project, and in connection with such quarterly meeting the Managing Member shall prepare (i) a meeting agenda, (ii) operating performance information for the Project in a form reasonably satisfactory to IW, which information shall not be required to contain greater detail than that which is to be included in the monthly reports required pursuant to Section 7.2(c); and (iii) so long as an Affiliate of MGM MIRAGE is “Managing Member”, data pertaining to the occupancy and financial performance of the hotel and casino assets located in Las Vegas, Nevada owned or managed by MGM MIRAGE with respect to which MGM MIRAGE (a) furnished data in connection with the May 2010 Company Board meeting (a copy of which is attached hereto as Exhibit J) and (b) has, as of the date of the meeting of the Board of Directors, the legal right to furnish such data to third parties such as IW (the “Benchmarking Data”); provided, however, (x) all Benchmarking Data shall be at all times subject to the terms and conditions of that certain Confidentiality Agreement dated as of February 16, 2010 by and between MGM MIRAGE and IW and its affiliates and successors and, as set forth therein, shall be used for no purpose other than evaluating the performance of the Project; (y) IW acknowledges that the Benchmarking Data may constitute material non-public information pertaining to MGM MIRAGE or its Affiliates; and (z) IW agrees that it will not use the Benchmarking Data in connection with effecting any transactions (whether buying, selling, pledging, or hypothecating) in securities of MGM MIRAGE or any derivatives or other instrument based upon the securities of MGM MIRAGE. In addition, on the first (1st) and fifteenth (15th) day of each calendar month or the next Business Day, if such dates are not Business Days, or on such other nearby date as the Managing Member shall reasonably schedule, the Managing Member shall (1) deliver to IW a reasonably detailed report on the financial performance of the Hotel Assets (the “Bi-Weekly Performance Report”) and (2) make available appropriate executives of the Managing Member to participate in a meeting with IW to discuss the Bi-Weekly Performance Report, if such a meeting is requested by IW. All rights established by this Section 7 .8(i), including without limitation the right to receive quarterly operating performance information for the Project, the Benchmarking Data, and the Bi-Weekly Performance Report and to meet with executives of the Managing Member, are personal to IW and non-transferrable to any successor or assign of IW other than a Permitted Transferee of IW. In the event that IW Transfers all or any portion of its Units to any Person other than a Permitted Transferee, the Managing Member’s obligations under this Section 7.8(i) shall automatically terminate without any further action of the Board of Directors and this Section 7.8(i) shall be of no further force and effect.
Appears in 1 contract
Samples: Limited Liability Company Agreement (MGM Resorts International)
Business Plan and Budgets. (a) Prior to Within thirty (30) days of the date hereofClosing Date, MGM has the Managing Member prepared and delivered delivered, or caused to DW be prepared and delivered, to IW for its review and approval, (i) the Construction Budget, (ii) a pre-opening budget for the Project and (iii) a written, detailed business plan for the Project setting forth the proposed development, construction, management, financing, operation, leasing and/or and sale plans for the Project. The business plan is incorporated herein by reference and has been jointly approved by the Members, as of the Signing Date, and together with the other components described in clauses (i), (ii) and (iii) shall be referred to herein as the “Initial Business Plan”. The Managing Member shall deliver, or cause to be delivered, to DW IW (I) on the Closing Date, (II) prior to the beginning of each Fiscal Year and (II) at (III) such other times as determined by the Managing MemberBoard of Directors, an updated Business Plan written, detailed business plan for the ProjectProject setting forth the proposed development, containing construction, management, financing, operation, leasing and sale plans for the components described in clauses Project (ii)collectively, (iii) and (iv) of this Section 7.9(athe “Project Business Plan”). Any modifications to the previously approved Project Business Plan shall be subject to the Approval of the Board of Directions to the extent required Directors in accordance with Section 9.3 of this Agreementhereof.
(b) At least ninety (90) days prior to the estimated completion of the Project and at the beginning of each Fiscal Year thereafterYear, the Managing Member shall cause the Operations Manager to prepare and submit to the Board of Directors for its reviewreview and approval, (i) a preliminary Annual Budget proposed annual budget for each Project Component for the upcoming Fiscal Year and (ii) a proposed business plan for each Project Component (x) setting forth the proposed, financing, operation, leasing and/or sale plans with respect to the applicable Project Component and (y) including, without limitation, (1) a detailed description of the anticipated rents and operating expenses, the maintenance and repair of the applicable Project Component and any planned or required improvements to such Project Component and (2) a detailed marketing report, which, at a minimum, sets forth a list of expected vacancies and a description of anticipated rents or other revenues over the applicable year and any related costs and expenses. Such business plan, once Approved by the Representatives on the Board of Directors in accordance with Section 9.3 of this Agreement hereof shall be referred to herein as a “Component Business Plan” and, collectively, the “Component Business Plans” for the applicable Project Component. Each Annual Budget proposed annual budget shall show all projected expenditures for operating expenses and capital improvements and all projected revenues from any source for the Project Component covered by such Annual Budgetannual budget. In addition, each such Annual Budget annual budget shall be prepared on both a cash and accrual basis and shall be in a form that has been Approved by the Board of Directors. All projections in each Annual Budget proposed annual budget shall be done on a monthly basis. The Members acknowledge that the preliminary Annual Budget annual budget for a Project Component provided pursuant to this Section 7.9(b7.8(b) will necessarily reflect only preliminary estimates of items of income and expense, and is subject to subsequent revision as contemplated by subclause (e) below.
(c) Prior At least ninety (90) days prior to the beginning of each Fiscal Year after completion of the ProjectYear, the Managing Member shall submit to the Board of Directors for its reviewreview and approval, a revised Annual Budget annual budget for each Project Component. Such revised Annual Budget annual budget shall take into account changes, if any, suggested by the Members and/or the Board of Directors and any other circumstances of which the Managing Member has become aware since the distribution of the prior Annual Budget for such Project Component. Such revised Annual Budgetannual budget, once Approved by the Board of Directors in accordance with Section 9.3 of this Agreement hereof shall replace the prior Annual Budget for such Project Component.
(d) If the Board of Directors is unable to agree upon a Business Plan business plan or Annual Budget annual budget prior to the first day of the Fiscal Year in question, then each Member, agreeing to use all good faith, commercially reasonable efforts to do so and subject to the terms of any Financing Documents then in effect, shall provide for the Business Plan and Annual Budget for such Project Component in effect for the Fiscal Year then expiring to be utilized until a new Business Plan business plan and/or Annual Budgetannual budget, as applicable, has been Approved, with the line items in such expiring Business Plan or Annual Budget that have not been Approved by the Board of Directors to be adjusted as follows: (x) insurance, taxes, common charges, utilities, debt service, labor expenses and required capital expenditures (necessary to comply with any applicable laws or existing contractual obligationsContractual Obligations) shall each be adjusted to actual amounts, (y) all capital and non-recurring items (other than the aforesaid required expenditures) for the current calendar year in such Annual Budget annual budget shall remain the same as in the expiring Annual Budget, and (z) all other expense line items shall be adjusted by an amount equal to the CPI Annual Percentage Increase (as hereinafter defined) as of the date of the expiring Annual Budget. The line items in the Business Plan business plan and/or Annual Budget has annual budget that have been Approved by the Board of Directors shall replace the applicable line items in the prior Business Plan and/or Annual Budget. The “CPI Annual Percentage Increase” computed as of a particular calendar month shall be equal to the percentage difference between the CPI for such calendar month and the CPI for the calendar month which is twelve (12) months prior to such calendar month. The Managing Member shall be entitled to make expenditures of Company funds in accordance with the foregoing.
(e) After the Closing Date, no less often than four (4) times per year, but in no event later than February 10, May 10, August 10 and November 10 of each year, the Managing Member shall prepare, or cause to be prepared, and submit to the Board of Directors for its review, updated sales projections for the residential units (including condominiums and condo-hotel units units) at the Project with variance calculations indicating the differences in average sales price and sales volume for the condominium and condo-hotel residential units compared to the most recently Approved approved Business Plan.
(f) If the proposed Business Plan business plan and Annual Budget annual budget for a Project Component are each Approved by the Board of Directors, then the same shall be the Business Plan and Annual Budget for such Project Component for the next Fiscal Year. Notwithstanding anything to the contrary set forth herein, at any time prior to the day which is sixty (60) days before the beginning of the Fiscal Year to which the proposed Business Plan business plan and Annual Budget annual budget for a Project Component relate, if either Member becomes aware of circumstances that require a change to such proposed Business Plan business plan or Annual Budgetannual budget, then the Managing Member shall submit a revised Business Plan business plan and/or Annual Budget annual budget for such Project Component to the Board of Directors for its Approval.
(g) The Managing Member shall be obligated to keep DW IW and the Board of Directors advised of material changes to the Plans (and the anticipated effect of such changes on the applicable Construction Budget) and the Approval of the Board of Directors shall be required for any material scope changes or other material modifications to the Plans
(h) The Managing Member shall promptly provide copies of the respective budgets approved pursuant to Section 9.3(a)(iv) hereof to the respective Operations Managers and shall provide reasonable oversight in respect of implementation of the respective budgets.
(i) The Board of Directors shall at least on a quarterly basis discuss all aspects of the Project, and in connection with such quarterly meeting the Managing Member shall prepare (i) a meeting agenda, (ii) operating performance information for the Project in a form reasonably satisfactory to IW, which information shall not be required to contain greater detail than that which is to be included in the monthly reports required pursuant to Section 7.2(c); and (iii) so long as an Affiliate of MGM Parent is “Managing Member”, data pertaining to the occupancy and financial performance of the hotel and casino assets located in Las Vegas, Nevada owned or managed by MGM Parent with respect to which MGM Parent (a) furnished data in connection with the May 2010 Company Board meeting (a copy of which is attached hereto as Exhibit J) and (b) has, as of the date of the meeting of the Board of Directors, the legal right to furnish such data to third parties such as IW (the “Benchmarking Data”); provided, however, (x) all Benchmarking Data shall be at all times subject to the terms and conditions of that certain Confidentiality Agreement dated as of February 16, 2010 by and between MGM Parent and IW and its affiliates and successors and, as set forth therein, shall be used for no purpose other than evaluating the performance of the Project; (y) IW acknowledges that the Benchmarking Data may constitute material non-public information pertaining to MGM Parent or its Affiliates; and (z) IW agrees that it will not use the Benchmarking Data in connection with effecting any transactions (whether buying, selling, pledging, or hypothecating) in securities of MGM Parent or any derivatives or other instrument based upon the securities of MGM Parent. In addition, on the first (1st) and fifteenth (15th) day of each calendar month or the next Business Day, if such dates are not Business Days, or on such other nearby date as the Managing Member shall reasonably schedule, the Managing Member shall (1) deliver to IW a reasonably detailed report on the financial performance of the Hotel Assets (the “Bi- Weekly Performance Report”) and (2) make available appropriate executives of the Managing Member to participate in a meeting with IW to discuss the Bi-Weekly Performance Report, if such a meeting is requested by IW. All rights established by this Section 7.8(i), including without limitation the right to receive quarterly operating performance information for the Project, the Benchmarking Data, and the Bi-Weekly Performance Report and to meet with executives of the Managing Member, are personal to IW and non-transferrable to any successor or assign of IW other than a Permitted Transferee of IW. In the event that IW Transfers all or any portion of its Units to any Person other than a Permitted Transferee, the Managing Member's obligations under this Section 7.8(i) shall automatically terminate without any further action of the Board of Directors and this Section 7.8(i) shall be of no further force and effect.
Appears in 1 contract
Samples: Limited Liability Company Agreement (MGM Resorts International)
Business Plan and Budgets. (a) Prior to the date hereof, MGM has prepared and delivered to DW for its review and approval, (i) the Construction Budget, (ii) a pre-opening budget for the Project and (iii) a written, detailed business plan for the Project setting forth the proposed development, construction, management, financing, operation, leasing and/or sale plans for the Project. The business plan is incorporated herein by reference and has been jointly approved by the Members, as of the Signing Date, and together with the other components described in clauses (i), (ii) and (iii) shall be referred to herein as the “Initial Business Plan”. The Managing Member shall deliver, or cause to be delivered, to DW (I) on the Closing Date, (II) prior to the beginning No later than October 15 of each Fiscal Year and at (III) such other times as determined by except the Managing Member, an updated Business Plan for the Project, containing the components described in clauses (ii), (iii) and (iv) of this Section 7.9(a). Any modifications to the previously approved Business Plan First Fiscal year which shall be subject to the Approval of the Board of Directions to the extent required in accordance with Section 9.3 of this Agreement.
(b) At least ninety (90) days prior to the estimated completion of the Project and at the beginning of each Fiscal Year thereafterno later than December 1), the Managing Member shall cause the Operations Manager to prepare and submit be delivered to the Board holders of Directors the Class B Units and the Class C Units, a draft of the Company’s business plan and projections for its reviewoperations for the next fiscal year (including the Operating Budget and the Capital Expenditure Budget) (for each such fiscal year, the “Business Plan”), such Business Plan to be in form and detail approved by: (i) a preliminary Annual Budget for each Project Component for the upcoming Fiscal Year holders of the Class B Units (by majority vote); and (ii) a proposed business plan for each Project Component the holders of the Class C Units (by majority vote). No later than November 1 of such Fiscal Year (except December 15 of the first Fiscal Year), the holders of the Class B Units (by majority vote) and the holders of the Class C Units (by majority vote) shall either (x) setting forth approve such Business Plan in the proposed, financing, operation, leasing and/or sale plans with respect form submitted to the applicable Project Component and them or (y) includingprovide to the Managing Member such Business Plan with such amendments and modifications deemed necessary by them. In the case of (y), without limitation, (1) a detailed description the Managing Member shall work in good faith with holders of the anticipated rents Class B Units and operating expenses, the maintenance Class C Units to agree on a final Business Plan. Such Business Plan shall then be in effect for the next Fiscal Year and repair the Managing Member shall comply in all respects with such Business Plan.
(b) The Company will have an “Operating Budget” which will control the operations of the applicable Project Component and any planned or required improvements Company in each Fiscal Year. (References throughout this Agreement to such Project Component and (2the “Operating Budget” shall be deemed to refer to the then current year’s Operating Budget.) a detailed marketing report, which, at a minimum, sets forth a list of expected vacancies and a description of anticipated rents or other revenues over the applicable year and any related costs and expenses. Such business plan, once Approved The Operating Budget shall be prepared by the Representatives on the Board of Directors Managing Member in accordance with Section 9.3 8.7(a) and then approved by (i) the holders of this Agreement shall be referred to herein as a “Business Plan” and, collectively, the “Business Plans” for Class B Units (by majority vote) and (ii) the applicable Project Componentholders of the Class C Units (by majority vote). Each Annual Budget shall show all projected expenditures for operating expenses and capital improvements and all projected revenues from any source for the Project Component covered by such Annual Budget. In addition, each such Annual The Operating Budget shall be prepared based upon a specified number of units required for the sale of services and/or products and may not be changed or materially deviated from (i.e., increasing any expense thereunder by more than fifteen percent (15%) of such expense, excluding any increase based on both a cash and accrual basis in proportion to an increase in the number of units required for the sale of services and/or products) without prior written approval by (i) the holders of the Class B Units (by majority vote); and (ii) the holders of the Class C Units (by majority vote). The Managing Member shall implement the Operating Budget and shall be in a form that has been Approved authorized, subject to the provisions of Section 8.2(b), without the need for further approval by the Board of Directors. All projections Directors (including the Class B Designees or the Class C Designees), to make the expenditures and incur the obligations provided for in each Annual Budget shall be done on a monthly basisthe Operating Budget. The Members acknowledge that Managing Member shall operate within the preliminary Annual confines of the Operating Budget for a Project Component provided pursuant and is not authorized to this Section 7.9(bmaterially exceed the line item expenses in the Operating Budget (i.e., increasing any expense thereunder by more than fifteen percent (15%) will necessarily reflect only preliminary estimates of items of income and such expense, except to the extent such increase is based on and is subject in proportion to subsequent revision as contemplated by subclause (e) belowan increase in the number of units required for the sale of services and/or products).
(c) Prior The Company will have a “Capital Expenditure Budget” which will control the capital expenditures of the Company in each the Fiscal Year. (References throughout this Agreement to the beginning of each Fiscal Year after completion of “Capital Expenditure Budget” shall be deemed to refer to the Project, then current year’s Capital Expenditure Budget.) The Capital Expenditure Budget shall be prepared by the Managing Member shall submit to the Board of Directors for its review, a revised Annual Budget for each Project Component. Such revised Annual Budget shall take into account changes, if any, suggested by the Members and/or the Board of Directors and any other circumstances of which the Managing Member has become aware since the distribution of the prior Annual Budget for such Project Component. Such revised Annual Budget, once Approved by the Board of Directors in accordance with Section 9.3 8.7(a) and then approved by (i) the holders of this Agreement the Class B Units (by majority vote) and (ii) the holders of the Class C Units (by majority vote). The Capital Expenditure Budget shall replace the prior Annual Budget for such Project Component.
(d) If the Board of Directors is unable to agree be based upon a Business Plan specified number of units required for the sale of services and/or products and may not be changed or Annual Budget materially deviated from (i.e., increasing any expense thereunder by more than fifteen percent (15%) of such expense, excluding any increase based on and in proportion to an increase in the number of units required for the sale of services and/or products) without prior to written approval by (i) the first day holders of the Fiscal Year in question, then each Member, agreeing to use all good faith, commercially reasonable efforts to do so and subject to the terms of any Financing Documents then in effect, shall provide for the Business Plan and Annual Budget for such Project Component in effect for the Fiscal Year then expiring to be utilized until a new Business Plan and/or Annual Budget, as applicable, has been Approved, with the line items in such expiring Business Plan or Annual Budget that have not been Approved Class B Units (by the Board of Directors to be adjusted as follows: (xmajority vote) insurance, taxes, common charges, utilities, debt service, labor expenses and required capital expenditures (necessary to comply with any applicable laws or existing contractual obligations) shall each be adjusted to actual amounts, (y) all capital and non-recurring items (other than the aforesaid required expenditures) for the current calendar year in such Annual Budget shall remain the same as in the expiring Annual Budget, and (zii) all other expense line items shall be adjusted by an amount equal to the CPI Annual Percentage Increase (as hereinafter defined) as holders of the date of the expiring Annual Budget. The line items in the Business Plan and/or Annual Budget has have been Approved Class C Units (by the Board of Directors shall replace the applicable line items in the prior Business Plan and/or Annual Budget. The “CPI Annual Percentage Increase” computed as of a particular calendar month shall be equal to the percentage difference between the CPI for such calendar month and the CPI for the calendar month which is twelve (12) months prior to such calendar monthmajority vote). The Managing Member shall implement the Capital Expenditure Budget and shall be entitled authorized, subject to the provisions of Section 8.2(b), without the need for further approval by the Directors (including the Class B Designees and the Class C Designees), to make the expenditures of Company funds and incur the obligations provided for in accordance with the foregoing.
(e) After the Closing Date, no less often than four (4) times per year, but in no event later than February 10, May 10, August 10 and November 10 of each year, the Managing Member shall prepare, or cause to be prepared, and submit to the Board of Directors for its review, updated sales projections for the condominiums and condo-hotel units at the Project with variance calculations indicating the differences in average sales price and sales volume for the condominium and condo-hotel units compared to the most recently Approved Business Plan.
(f) If the proposed Business Plan and Annual Budget for a Project Component are each Approved by the Board of Directors, then the same shall be the Business Plan and Annual Budget for such Project Component for the next Fiscal YearCapital Expenditure Budget. Notwithstanding anything to the contrary set forth herein, at any time prior to the day which is sixty (60) days before the beginning of the Fiscal Year to which the proposed Business Plan and Annual Budget for a Project Component relate, if either Member becomes aware of circumstances that require a change to such proposed Business Plan or Annual Budget, then the Managing Member shall submit a revised Business Plan and/or Annual Budget for such Project Component to the Board of Directors for its Approval.
(g) The Managing Member shall be obligated operate within the confines of the Capital Expenditure Budget and is not authorized to keep DW and materially exceed the Board line item expenses in the Capital Expenditure Budget (i.e., increasing any expense thereunder by more than fifteen percent (15%) of Directors advised of material changes such expense, except to the Plans (extent such increase is based on and in proportion to an increase in the anticipated effect number of such changes on the applicable Construction Budget) and the Approval of the Board of Directors shall be units required for any material scope changes or other material modifications to the Planssale of services and/or products).
Appears in 1 contract
Samples: Unit Purchase Agreement (Ecosphere Technologies Inc)
Business Plan and Budgets. (a) Prior Within thirty (30) days of the Effective Date, the Managing Member shall prepare and deliver, or shall cause to the date hereof, MGM has be prepared and delivered delivered, to DW IW for its review and approval, (i) the Construction BudgetBudget (only prior to the Completion Date), (ii) a pre-opening budget for the Project and (iii) a written, detailed business plan for the Project setting forth the proposed development, construction, management, financing, operation, leasing and/or and sale plans for the ProjectProject (collectively, the “Project Business Plan”). The Managing Member shall deliver, or cause to be delivered, to IW (I) prior to the beginning of each Fiscal Year and (II) at such other times as determined by the Board of Directors, an updated business plan is incorporated herein by reference and has been jointly approved by for the MembersProject, as of containing the Signing Date, and together with the other components described in clauses (i), (ii) and (iii) shall be referred to herein as the “Initial Business Plan”. The Managing Member shall deliver, or cause to be delivered, to DW (I) on the Closing Date, (II) prior to the beginning of each Fiscal Year and at (III) such other times as determined by the Managing Member, an updated Business Plan for the Project, containing the components described in clauses (ii), (iii) and (iv) of this Section 7.9(a7.8(a). Any modifications to the previously approved Project Business Plan shall be subject to the Approval of the Board of Directions to the extent required Directors in accordance with Section 9.3 of this Agreementhereof.
(b) At least ninety (90) days prior to (a) the estimated completion of the Project and at (b) the beginning of each Fiscal Year thereafter, the Managing Member shall cause the Operations Manager to prepare and submit to the Board of Directors for its reviewreview and approval, (i) a preliminary Annual Budget proposed annual budget for each Project Component for the upcoming Fiscal Year and (ii) a proposed business plan for each Project Component (x) setting forth the proposed, financing, operation, leasing and/or sale plans with respect to the applicable Project Component and (y) including, without limitation, (1) a detailed description of the anticipated rents and operating expenses, the maintenance and repair of the applicable Project Component and any planned or required improvements to such Project Component and (2) a detailed marketing report, which, at a minimum, sets forth a list of expected vacancies and a description of anticipated rents or other revenues over the applicable year and any related costs and expenses. Such business plan, once Approved by the Representatives on the Board of Directors in accordance with Section 9.3 of this Agreement hereof shall be referred to herein as a “Component Business Plan” and, collectively, the “Component Business Plans” for the applicable Project Component. Each Annual Budget proposed annual budget shall show all projected expenditures for operating expenses and capital improvements and all projected revenues from any source for the Project Component covered by such Annual Budgetannual budget. In addition, each such Annual Budget annual budget shall be prepared on both a cash and accrual basis and shall be in a form that has been Approved by the Board of Directors. All projections in each Annual Budget proposed annual budget shall be done on a monthly basis. The Members acknowledge that the preliminary Annual Budget annual budget for a Project Component provided pursuant to this Section 7.9(b7.8(b) will necessarily reflect only preliminary estimates of items of income and expense, and is subject to subsequent revision as contemplated by subclause (e) below.
(c) Prior At least ninety (90) days prior to the beginning of each Fiscal Year after completion of the Project, the Managing Member shall submit to the Board of Directors for its reviewreview and approval, a revised Annual Budget annual budget for each Project Component. Such revised Annual Budget annual budget shall take into account changes, if any, suggested by the Members and/or the Board of Directors and any other circumstances of which the Managing Member has become aware since the distribution of the prior Annual Budget for such Project Component. Such revised Annual Budgetannual budget, once Approved by the Board of Directors in accordance with Section 9.3 of this Agreement hereof shall replace the prior Annual Budget for such Project Component.
(d) If the Board of Directors is unable to agree upon a Business Plan business plan or Annual Budget annual budget prior to the first day of the Fiscal Year in question, then each Member, agreeing to use all good faith, commercially reasonable efforts to do so and subject to the terms of any Financing Documents then in effect, shall provide for the Business Plan and Annual Budget for such Project Component in effect for the Fiscal Year then expiring to be utilized until a new Business Plan business plan and/or Annual Budgetannual budget, as applicable, has been Approved, with the line items in such expiring Business Plan or Annual Budget that have not been Approved by the Board of Directors to be adjusted as follows: (x) insurance, taxes, common charges, utilities, debt service, labor expenses and required capital expenditures (necessary to comply with any applicable laws or existing contractual obligationsContractual Obligations) shall each be adjusted to actual amounts, (y) all capital and non-recurring items (other than the aforesaid required expenditures) for the current calendar year in such Annual Budget annual budget shall remain the same as in the expiring Annual Budget, and (z) all other expense line items shall be adjusted by an amount equal to the CPI Annual Percentage Increase (as hereinafter defined) as of the date of the expiring Annual Budget. The line items in the Business Plan business plan and/or Annual Budget has annual budget that have been Approved by the Board of Directors shall replace the applicable line items in the prior Business Plan and/or Annual Budget. The “CPI Annual Percentage Increase” computed as of a particular calendar month shall be equal to the percentage difference between the CPI for such calendar month and the CPI for the calendar month which is twelve (12) months prior to such calendar month. The Managing Member shall be entitled to make expenditures of Company funds in accordance with the foregoing.
(e) After the Closing Date, no less often than four (4) times per year, but in no event later than February 10, May 10, August 10 and November 10 of each year, the Managing Member shall prepare, or cause to be prepared, and submit to the Board of Directors for its review, updated sales projections for the residential units (including condominiums and condo-hotel units units) at the Project with variance calculations indicating the differences in average sales price and sales volume for the condominium and condo-hotel residential units compared to the most recently Approved approved Business Plan.
(f) If the proposed Business Plan business plan and Annual Budget annual budget for a Project Component are each Approved by the Board of Directors, then the same shall be the Business Plan and Annual Budget for such Project Component for the next Fiscal Year. Notwithstanding anything to the contrary set forth herein, at any time prior to the day which is sixty (60) days before the beginning of the Fiscal Year to which the proposed Business Plan business plan and Annual Budget annual budget for a Project Component relate, if either Member becomes aware of circumstances that require a change to such proposed Business Plan business plan or Annual Budgetannual budget, then the Managing Member shall submit a revised Business Plan business plan and/or Annual Budget annual budget for such Project Component to the Board of Directors for its Approval.
(g) The Managing Member shall be obligated to keep DW IW and the Board of Directors advised of material changes to the Plans (and the anticipated effect of such changes on the applicable Construction Budget) and the Approval of the Board of Directors shall be required for any material scope changes or other material modifications to the Plans
(h) The Managing Member shall promptly provide copies of the respective budgets approved pursuant to Section 9.3(a)(iv) hereof to the respective Operations Managers and shall provide reasonable oversight in respect of implementation of the respective budgets.
Appears in 1 contract
Business Plan and Budgets. (a) Prior Within thirty (30) days of the Effective Date, the Managing Member shall prepare and deliver, or shall cause to the date hereof, MGM has be prepared and delivered delivered, to DW IW for its review and approval, (i) the Construction BudgetBudget (only prior to the Completion Date), (ii) a pre-opening budget for the Project and (iii) a written, detailed business plan for the Project setting forth the proposed development, construction, management, financing, operation, leasing and/or and sale plans for the ProjectProject (collectively, the “Project Business Plan”). The Managing Member shall deliver, or cause to be delivered, to IW (I) prior to the beginning of each Fiscal Year and (II) at such other times as determined by the Board of Directors, an updated business plan is incorporated herein by reference and has been jointly approved by for the MembersProject, as of containing the Signing Date, and together with the other components described in clauses (i), (ii) and (iii) shall be referred to herein as the “Initial Business Plan”. The Managing Member shall deliver, or cause to be delivered, to DW (I) on the Closing Date, (II) prior to the beginning of each Fiscal Year and at (III) such other times as determined by the Managing Member, an updated Business Plan for the Project, containing the components described in clauses (ii), (iii) and (iv) of this Section 7.9(a7.8(a). Any modifications to the previously approved Project Business Plan shall be subject to the Approval of the Board of Directions to the extent required Directors in accordance with Section 9.3 of this Agreementhereof.
(b) At least ninety (90) days prior to (a) the estimated completion of the Project and at (b) the beginning of each Fiscal Year thereafter, the Managing Member shall cause the Operations Manager to prepare and submit to the Board of Directors for its reviewreview and approval, (i) a preliminary Annual Budget proposed annual budget for each Project Component for the upcoming Fiscal Year and (ii) a proposed business plan for each Project Component (x) setting forth the proposed, financing, operation, leasing and/or sale plans with respect to the applicable Project Component and (y) including, without limitation, (1) a detailed description of the anticipated rents and operating expenses, the maintenance and repair of the applicable Project Component and any planned or required improvements to such Project Component and (2) a detailed marketing report, which, at a minimum, sets forth a list of expected vacancies and a description of anticipated rents or other revenues over the applicable year and any related costs and expenses. Such business plan, once Approved by the Representatives on the Board of Directors in accordance with Section 9.3 of this Agreement hereof shall be referred to herein as a “Component Business Plan” and, collectively, the “Component Business Plans” for the applicable Project Component. Each Annual Budget proposed annual budget shall show all projected expenditures for operating expenses and capital improvements and all projected revenues from any source for the Project Component covered by such Annual Budgetannual budget. In addition, each such Annual Budget annual budget shall be prepared on both a cash and accrual basis and shall be in a form that has been Approved by the Board of Directors. All projections in each Annual Budget proposed annual budget shall be done on a monthly basis. The Members acknowledge that the preliminary Annual Budget annual budget for a Project Component provided pursuant to this Section 7.9(b7.8(b) will necessarily reflect only preliminary estimates of items of income and expense, and is subject to subsequent revision as contemplated by subclause (e) below.
(c) Prior At least ninety (90) days prior to the beginning of each Fiscal Year after completion of the Project, the Managing Member shall submit to the Board of Directors for its reviewreview and approval, a revised Annual Budget annual budget for each Project Component. Such revised Annual Budget annual budget shall take into account changes, if any, suggested by the Members and/or the Board of Directors and any other circumstances of which the Managing Member has become aware since the distribution of the prior Annual Budget for such Project Component. Such revised Annual Budgetannual budget, once Approved by the Board of Directors in accordance with Section 9.3 of this Agreement hereof shall replace the prior Annual Budget for such Project Component.
(d) If the Board of Directors is unable to agree upon a Business Plan business plan or Annual Budget annual budget prior to the first day of the Fiscal Year in question, then each Member, agreeing to use all good faith, commercially reasonable efforts to do so and subject to the terms of any Financing Documents then in effect, shall provide for the Business Plan and Annual Budget for such Project Component in effect for the Fiscal Year then expiring to be utilized until a new Business Plan business plan and/or Annual Budgetannual budget, as applicable, has been Approved, with the line items in such expiring Business Plan or Annual Budget that have not been Approved by the Board of Directors to be adjusted as follows: (x) insurance, taxes, common charges, utilities, debt service, labor expenses and required capital expenditures (necessary to comply with any applicable laws or existing contractual obligationsContractual Obligations) shall each be adjusted to actual amounts, (y) all capital and non-recurring items (other than the aforesaid required expenditures) for the current calendar year in such Annual Budget annual budget shall remain the same as in the expiring Annual Budget, and (z) all other expense line items shall be adjusted by an amount equal to the CPI Annual Percentage Increase (as hereinafter defined) as of the date of the expiring Annual Budget. The line items in the Business Plan business plan and/or Annual Budget has annual budget that have been Approved by the Board of Directors shall replace the applicable line items in the prior Business Plan and/or Annual Budget. The “CPI Annual Percentage Increase” computed as of a particular calendar month shall be equal to the percentage difference between the CPI for such calendar month and the CPI for the calendar month which is twelve (12) months prior to such calendar month. The Managing Member shall be entitled to make expenditures of Company funds in accordance with the foregoing.
(e) After the Closing Date, no less often than four (4) times per year, but in no event later than February 10, May 10, August 10 and November 10 of each year, the Managing Member shall prepare, or cause to be prepared, and submit to the Board of Directors for its review, updated sales projections for the residential units (including condominiums and condo-hotel units units) at the Project with variance calculations indicating the differences in average sales price and sales volume for the condominium and condo-hotel residential units compared to the most recently Approved approved Business Plan.
(f) If the proposed Business Plan business plan and Annual Budget annual budget for a Project Component are each Approved by the Board of Directors, then the same shall be the Business Plan and Annual Budget for such Project Component for the next Fiscal Year. Notwithstanding anything to the contrary set forth herein, at any time prior to the day which is sixty (60) days before the beginning of the Fiscal Year to which the proposed Business Plan business plan and Annual Budget annual budget for a Project Component relate, if either Member becomes aware of circumstances that require a change to such proposed Business Plan business plan or Annual Budgetannual budget, then the Managing Member shall submit a revised Business Plan business plan and/or Annual Budget annual budget for such Project Component to the Board of Directors for its Approval.
(g) The Managing Member shall be obligated to keep DW IW and the Board of Directors advised of material changes to the Plans (and the anticipated effect of such changes on the applicable Construction Budget) and the Approval of the Board of Directors shall be required for any material scope changes or other material modifications to the Plans
(h) The Managing Member shall promptly provide copies of the respective budgets approved pursuant to Section 9.3(a)(iv) hereof to the respective Operations Managers and shall provide reasonable oversight in respect of implementation of the respective budgets.
(i) The Board of Directors shall at least on a quarterly basis discuss all aspects of the Project, and in connection with such quarterly meeting the Managing Member shall prepare (i) a meeting-agenda; (ii) operating performance information for the Project in a form reasonably satisfactory to IW, which information shall not be required to contain greater detail than that which is to be included in the monthly reports required pursuant to Section 7.2(c); and (iii) so long as an Affiliate of MGM Resorts is “Managing Member,” data pertaining to the occupancy and financial performance of the hotel and casino assets located in Las Vegas, Nevada owned or managed by MGM Resorts with respect to which MGM Resorts (a) furnished data in connection with the May 2010 Company Board meeting and (b) has, as of the date of the meeting of the Board of Directors, the legal right to furnish such data to third parties such as IW (the “Benchmarking Data”); provided, however, (x) all Benchmarking Data shall be at all times subject to the terms and conditions of that certain Confidentiality Agreement dated as of February 16, 2010 by and between MGM Resorts and IW and its affiliates and successors and, as set forth therein, shall be used for no purpose other than evaluating the performance of the Project; (y) IW acknowledges that the Benchmarking Data may constitute material non-public information pertaining to MGM Resorts or its Affiliates; and (z) IW agrees that it will not use the Benchmarking Data in connection with effecting any transactions (whether buying, selling, pledging, or hypothecating) in securities of MGM Resorts or any derivatives or other instrument based upon the securities of MGM Resorts. In addition, on the first (1st) and fifteenth (15th) day of each calendar month or the next Business Day, if such dates are not Business Days, or on such other nearby date as the Managing Member shall reasonably schedule, the Managing Member shall (1) deliver to IW a reasonably detailed report on the financial performance of the Hotel Assets (the “Bi-Weekly Performance Report”) and (2) make available appropriate executives of the Managing Member to participate in a meeting with IW to discuss the Bi-Weekly Performance Report, if such a meeting is requested by IW. All rights established by this Section 7.8(i), including without limitation the right to receive quarterly operating performance information for the Project, the Benchmarking Data, and the Bi-Weekly Performance Report and to meet with executives of the Managing Member, are personal to IW and non-transferrable to any successor or assign of IW other than a Permitted Transferee of IW. In the event that IW Transfers all or any portion of its Units to any Person other than a Permitted Transferee, the Managing Member’s obligations under this Section 7.8(i) shall automatically terminate without any further action of the Board of Directors and this Section 7.8(i) shall be of no further force and effect.*
Appears in 1 contract
Samples: Limited Liability Company Agreement (CityCenter Holdings, LLC)
