SANTA ANA GOLF, LLC (COURSECO, INC.)

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The parties understand that, as provided in Article 11, budgets for Major Capital Improvements will be treated separately and will not form part of the Annual Plans. 3.4.2 _Approvals. Each Annual Budget Plan shall be subject to the prior written approval of the City Manager or their designee, and the new Annual Budget Plan for a given Operating Year shall. not become effective without such approval, which approval shall not be unreasonably withheld. It is contemplated by the parties that the Annual Budget Plan will be agreed upon by the parties not later than sixty (60) days following delivery of the Annual Budget Plan by Contractor to City. If City fails to either approve the Annual Budget Plan within said 60- day period or to advise Contractor of its objections to the Annual Budget Plan within such period, then City shall be deemed to have approved the Annual Budget Plan as submitted. In the event of a dispute with regard to an Annual Budget Plan, the parties shall use good faith efforts to resolve such dispute. Pending the resolution of such dispute, Contractor shall continue to manage and operate the Facility in accordance with the standards set forth in this Agreement and the most recent approved Annual Budget Plan, as it may have been mutually amended by the parties during the preceding year in accordance with this Agreement, at a level of expenditures comparable to those of the preceding year subject to reasonable increases in Operating Expenses (as defined herein) requested by Contractor due to(a)increases in the number of guests using the Facility,(b)increases in Gross Revenues (as defined herein), or (c) other matters beyond the reasonable control of Contractor (e.g., without limitation, increases in utility charges, etc.), plus an amount equal to the increase, if any, in the CPI during the prior Operating Year. Once approved, Contractor may propose amendments or revisions to the Annual Budget Plan to take into consideration variables or events that did not exist,or could not be anticipated by Contractor at the time the Annual Budget Plan was prepared. Any such proposed amendments or revisions shall be submitted in writing and shall be subject to City's prior approval, which approval shall not be unreasonably withheld or delayed. 3.4.3 Compliance. Expenditures from the Golf Course will be recorded into the City's financial ledger and therefore must comply with the City's budget ordinance. The City's budget ordinances states that appropriations hereby made shall constitute the maximum expenditures authorized for the several offices, agencies and departments opposite which the amounts of such appropriations are shown in the City Budget. The Contractor shall not exceed the total amount of expenditures identified in the approved Annual Budget Plan, including approved adjustments. On a quarterly basis, the Contractor may submit any adjustments to the Annual Budget Plan for the City's consideration. Any revision to the Annual Budget Plan shall require the approval of the City's Representative and may require further approval by the City Council. 3.4.4. Emergency Expenditures. Notwithstanding anything in this Agreement to the contrary,in the event of an emergency which arises by act of God or any event or act beyond the control of Contractor, or a dangerous condition exists that requires immediate repair, or a governmental directive or order is issued to City, Contractor is authorized to take such actions as may in its reasonable discretion be required (including expending any funds reasonably necessary to respond to such condition or event); provided, however, that if an emergency occurs which requires funds not otherwise budgeted for in the Emergency Expenditures of the annual budget, Contractor shall immediately notify City of the occurrence of any of the situations referenced -7-