SANTA ANA GOLF, LLC (COURSECO, INC.)

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shall be used to calculate the increase in the Base Line NOI unless City objects to such index in writing within fifteen (15) days after the date Contractor notifies City of Contractor's substitute index. If City objects to the substitute index, then Contractor and City shall submit the selection of the substitute index for binding arbitration in accordance with the rules and regulations of the American Arbitration Association at its office closest to the Facility. The costs of arbitration shall be borne equally by City and Contractor. Effective Date means the date of the Management Agreement. Facility has the meaning as set forth in the recitals of this Agreement, and is further documented by way of the `Facility Maps," attached hereto and incorporated herein by this reference as Exhibit A. Operating Account means a bank account established by Contractor, for the sole purpose of the Facility articulated in the Agreement as set forth in Section 6.1.1. Furnishings and Equipment means all furniture, furnishings, trade fixtures, apparatus and equipment, including golf course maintenance vehicles and equipment, golf carts, driving range pickers and pullers, mats, buckets, cash registers, rental golf clubs, ball washers, benches, uniforms, and other personal property used in or held in storage for use in the operation of the Facility, other than Operating Inventory and fixtures attached to and forming part of the Improvements. Golf Course Manual is the policy and procedures for the operation and maintenance of the Facility as it may be revised during the term of this agreement as developed and maintained by the Contractor. If any such revision results in an increase in direct costs, the City shall have the discretion to approve and increase the applicable line items in the Annual Budget to account for such increased costs. Gross Revenues means all money received as a result of the operation of the Facility and the sale of goods and services at the Facility, determined in accordance with generally accepted accounting principles consistently applied. Gross Revenues shall include,but are not limited to,all green fees, annual fees; rental fees for golf carts, golf clubs and bags, and other rental items, range balls; reservation fees; fees for golf handicap service; food and beverage sales; liquor sales; revenue generated from space rentals and from event-related meetings, banquets, parties, tournaments, and other group gatherings; merchandise sales; golf instruction fees; revenues from golf schools; gross receipts received by licensees or concessionaires (if applicable);proceeds from insurance; any amount received by Contractor in connection with any claim, demand, or lawsuit; and all other revenues generated by the Facility. Gross Revenues shall be reduced by any cash refunds or credits allowed on returns by purchasers. Gross Revenues shall not include the following: (a) sales taxes, excise taxes, gross receipts taxes and other similar taxes now or later imposed upon the sale of food, beverages, merchandise or services and paid to the appropriate taxing authority,whether added to or included in the selling price; (b) the amount of any gratuities to Facility employees, or service charges added to customer billings which represent gratuities to Facility employees; (c)proceeds of any borrowings by Contractor or City; (d)any initial operating funds and fields subsequently provided by City to satisfy the working capital needs of the Facility,