Common use of Budget and Development Plan Clause in Contracts

Budget and Development Plan. On or about October 1st of each year during --------------------------- the term of this Agreement, Manger shall prepare and submit to Owner for its approval for the next succeeding crop year (i) a budget for the operation and management of the Land, (ii) a capital improvement plan setting forth proposed improvements, if any, to be made to the Land, (iii) a cropping plan for the Land, (iv) a statement of funding requirements to carry out the budget and any development plan including a monthly breakdown of funding needs for such purposes for the applicable crop year (collectively hereinafter referred to as a "Proposed Budget"), and (v) a statement (Schedule D) that supports the annual budget and development plan regarding; labor categories and applicable hourly and or monthly rates, all calculations detailing labor benefits and payroll burdens, and all farming equipment charges either per hour or per acre. From time to time throughout the crop year, Manager may be requested to prepare and submit to Owner an update to the Approved Budget then in effect to reflect the actual costs of operation and management during that part of the year that has expired. The term crop year for the purposes of this Agreement shall commence November 1st, and terminate October 31st in any given year. Each proposed Budget shall be prepared in a satisfactory manner, shall employ the Budget Categories attached hereto as Exhibit "B," and shall set forth on a monthly basis, Manager's best judgment of operational and developmental costs and expenses to be incurred by Manager in the operation and management of the Land during the crop year for which such Proposed Budget is submitted. Owner shall have 30 days from date of receipt to either approve or revise such Proposed budget. Such Approved Proposed Budget shall govern the management and operation of the Land by Manager for the crop year and shall be referred to collectively as the "Approved Budget." The Approved Budget shall not be modified or changed except by prior written approval of Owner. Manager shall use commercially reasonable efforts to operate and manage the Land within the scope of the Approved Budget and to timely pay vendor bills and invoices from the Farm Account in accordance with the Approved Budget; however, Owner and Manager recognize that the actual costs of operation and management of the Land may vary from those set forth in an Approved Budget and agree that the Manager may, without prior written approval of Owner, exceed any single Budget Category as shown in the Approved Budget by an amount not to exceed 10% (ten percent) of such Budget Category or $5,000.00 (five thousand dollars and 00/100 cents) whichever is less, so long as the Approved Budget is not exceeded in the aggregate by more than five percent (5%) after taking into account all previous single Budget Category changes. Manager shall not incur for Owner's account, nor shall Manager make any disbursement from the Farm Account or be reimbursed for (1) any cost incurred for any single line item that exceeds the amount shown in the Approved Budget for such Budget Category by 10% (ten percent) thereof or $5,000.00, (five thousand dollars and 00/100 cents) whichever is less or (2) any cost incurred which, when aggregated with all previous single Budget Category changes, exceeds five percent (5%) of the Approved Budget, in either case unless: a. The prior written approval of Owner is obtained before such cost is incurred; or, b. The following conditions shall have been satisfied with respect to such excess: (1) Manager shall have notified Owner in writing of such anticipated excess cost and either (a) Manager mailing of such notice in the manner provided in Paragraph 18 hereof; or (b) Manager shall have received the written approval of the incurring of such anticipated excess costs from Owner; or (2) Manager shall have notified Owner orally or in writing of the existence of an emergency situation which requires that an excess cost be incurred and either (a) shall not have received an oral or written objection to the occurrence thereof from Owner within 24 hours after the transmission of such notice; or (b) shall have received oral or written approval of the incurring thereof. In the case of any oral communications made pursuant to this paragraph, the party initiating the communication shall promptly follow such communication with written confirmation thereof. The Budget Categories shown m the Approved Budget for any given crop year, prior to any updating to reflect actual costs of operation and management, shall be used for purposes of determining whether Manager has exceeded the budget overrun limitations contained in this Paragraph 5.