Common use of Operating and Capital Budgets Clause in Contracts

Operating and Capital Budgets. (a) The Borrower (on a consolidating basis) shall, on or before the Closing Date, adopt an Operating and Capital Budget for the Project for the period from such date to the conclusion of the then current fiscal year (and for each month during such period), and, no less than fifteen (15) days in advance of the beginning of each fiscal year of the Borrower thereafter, the Borrower shall adopt an Operating and Capital Budget for the Project for the succeeding fiscal year (and for each month during such period). Copies of such proposed Operating and Capital Budget, together with a comparison of the costs in the proposed Operating and Capital Budget with the costs set forth in the Operating and Capital Budget for the Project for the current fiscal year and an explanation of the reasons for any significant increase or decrease in any category shall be furnished to the Administrative Agent at least sixty (60) days before the beginning of the fiscal year to which such proposed Operating and Capital Budget applies. Prior to adoption thereof, each proposed Operating and Capital Budget for the Project shall be subject to the prior approval of the Administrative Agent, following consultation with the Independent Engineer, which approval shall not be unreasonably withheld or delayed. Copies of the final Operating and Capital Budget so adopted for the Project shall be furnished to the Administrative Agent promptly upon their adoption. In the event that any proposed Operating and Capital Budget for the Project is not approved by the Administrative Agent, the Operating and Capital Budget for the Project from the previous fiscal year increased by the CPI for the then-current fiscal year shall apply for the then-current fiscal year until an Operating and Capital Budget for the Project is approved. The Administrative Agent shall have the right to approve all or a portion of any proposed Operating and Capital Budget for the Project. To the extent the Administrative Agent does not approve a portion of a proposed Operating and Capital Budget for the Project, such portion of the Budget from the previous fiscal year increased by the CPI for the then-current fiscal year shall apply for the then-current fiscal year until such portion of the proposed Operating and Capital Budget for the Project is approved. (b) The Borrower shall comply, within the ten percent (10%) variance described below, with the Operating and Capital Budget. If during any fiscal year the Borrower reasonably projects that any category of Operation and Maintenance Expenses for the Project for such fiscal year will exceed by more than twenty percent (20%) the amount budgeted for such category of Operation and Maintenance Expenses in the then- applicable Operating and Capital Budget(s), or if any category of Operation and Maintenance Expenses for the Project incurred to date during such fiscal year plus any Operation and Maintenance Expenses budgeted for such category for the remainder of such fiscal year in the then-applicable Operating and Capital Budget(s) exceeds by more than ten percent (10%) the aggregate amount budgeted for such category of Operation and Maintenance Expenses in the then-applicable Operating and Capital Budget(s), then the Borrower shall prepare and submit for the approval of the Administrative Agent and the Independent Engineer pursuant to Section 8.21(a), an amended Operating and Capital Budget for the remainder of such fiscal year; provided that the approval of the Administrative Agent and the Independent Engineer shall not be required for revisions to an Operating and Capital Budget that are based on price fluctuations for any budgeted line items for Feedstock, natural gas, Biodiesel, Glycerin, Methanol, electricity, chemicals and other commodities and utilities used in or sold under the Borrower’s operations, or freight.