Preparation of Operating Budget. Commencing the date of this Agreement for the remainder of the 2018 calendar year, and on or before the preceding December 1 for each subsequent calendar year, the Manager shall submit to the Class A Member for Class A Member Approval, in a form reasonably satisfactory to the Class A Member and which may be prepared by the Property Manager, (i)(A) a capital budget outlining the program of capital expenditures, if any, with respect to the Property for the next ensuing calendar year, in which each proposed expenditure will be designated either as necessary or desirable by the Manager, and (B) an operating budget setting an estimate of operating revenues and expenses with respect to the Property for the next ensuing calendar year (such capital budget and such operating budget are collectively referred to herein as the “Operating Budget”); (ii) a narrative description of any necessary maintenance activities and capital improvements and related required expenditures, and such other projections, plans and information relevant to the operation of the Company as is reasonably required to evaluate anticipated operations of the Property, together with an explanation of the marketing plan with respect to the Property; (iii) any anticipated changes or modifications in income, costs or expenses expected to differ significantly from those prevailing during the current calendar year; and (iv) a projection of cash receipts and disbursements of the Property for the next ensuing calendar year based upon the proposed Operating Budget, together with recommendations as to the use of projected cash flow from the Property, if any, in excess of short term operating requirements and/or as to the sources and amounts of additional cash flow that may be required to meet operating capital expenditure requirements.
Preparation of Operating Budget
