Common use of Annual Operating Budget Clause in Contracts

Annual Operating Budget. Borrower shall prepare and deliver to Lender, within thirty (30) days prior to the beginning of each calendar year, an annual expenditure budget for (A) Borrower and its Subsidiaries and (B) each Property, and in each case showing, in reasonable detail (i) each line item of anticipated income and operating expenses, including amounts required to establish, maintain, and/or increase reserves, and (ii) each line item of anticipated Capital Expenditures (“Operating Budget”). The Operating Budget shall also include a business plan (“Business Plan”) for Borrower’s and its Subsidiaries’ proposed operations during the forthcoming calendar year which shall include a projection of income and expenses for the coming year(“Projections”). The Operating Budget shall be prepared and submitted in a form reasonably acceptable to Lender. The Operating Budget for each Property through December 31, 2006 is attached hereto as Exhibit G. Lender shall have the right at any time following the occurrence and during the continuance of an Event of Default to approve each Operating Budget in Lender’s reasonable discretion. In the event that Lender objects to the proposed Operating Budget submitted by Borrower, Lender shall advise Borrower of such objections within fifteen (15) Business Days after receipt thereof (and deliver to Borrower a reasonably detailed description of such objection) and Borrower shall promptly revise such Operating Budget and resubmit the same to Lender. Lender shall advise Borrower of any objections to such revised Operating Budget within ten (10) Business Days after receipt thereof (and deliver to Borrower a reasonably detailed description of such objection) and Borrower shall promptly revise the same in accordance with the process described in this sentence until Lender approves an Operating Budget. Each such Operating Budget approved by Lender in accordance with terms hereof shall hereinafter be referred to as an “Approved Operating Budget.”

Annual Operating Budget. As soon as available but, in any event, within sixty (60) days prior to (i) the Cooperation Period Commencement Date in respect of the initial Plant to be completed and, thereafter, (ii) the commencement of each Fiscal Year, an annual operating budget (the "Annual Budget") (including budgeted statements of income and sources and uses of cash and balance sheets) prepared by the Borrower and accompanied by a statement of the chief financial officer of the Borrower to the effect that, the best of his or her knowledge, the budget is a reasonable estimate for the period covered thereby. The first Annual Budget shall prepare cover the period from the Cooperation Period Commencement Date through the end of the Fiscal Year in which the Cooperation Period Commencement Date occurs, and, if such period consists of less than six (6) months, for the immediately succeeding Fiscal Year. Each Annual Budget shall contain complete, fair and deliver accurate estimates (by principal components) of Sales Proceeds, Operating and Maintenance Costs and Debt Service for each Month covered by such Annual Budget based on the Borrower's best projections at such time. Unless otherwise consented to Lenderby Eximbank, the Annual Budget from year to year shall be based on the same format as the Base Case Forecast, including any amounts allocated for contingencies, and be maintained on the same basis and provide sufficient detail to permit a meaningful comparison. For each Annual Budget that is expected to cover any period occurring after the Disbursement Date, Eximbank (in consultation with the Independent Engineer) shall review such Annual Budget, and Eximbank's response shall not be unreasonably delayed. If Eximbank does not approve an Annual Budget, Eximbank shall notify the Borrower of the items which are disapproved and the reason for such disapproval. Until such Annual Budget is so approved, the Annual Budget most recently in effect shall continue to apply, except that any items of the then proposed Annual Budget that have been approved shall also be given effect. From time to time, but not more frequently than once per Quarter, the Borrower may propose amendments to an Annual Budget, and Eximbank (in consultation with the Independent Engineer) may reject such proposal within thirty (30) days prior to Business Days from the beginning date the Borrower submits such proposal if in Eximbank's reasonable judgment such amendment is not reasonably necessary or advisable for operation of each calendar yearthe Project and, an annual expenditure budget for if no such rejection is made, such amendments shall become effective. Not later than three (A) Borrower and its Subsidiaries and (B) each Property, and in each case showing, in reasonable detail (i) each line item of anticipated income and operating expenses, including amounts required to establish, maintain, and/or increase reserves, and (ii) each line item of anticipated Capital Expenditures (“Operating Budget”). The Operating Budget shall also include a business plan (“Business Plan”) for Borrower’s and its Subsidiaries’ proposed operations during the forthcoming calendar year which shall include a projection of income and expenses for the coming year(“Projections”). The Operating Budget shall be prepared and submitted in a form reasonably acceptable to Lender. The Operating Budget for each Property through December 31, 2006 is attached hereto as Exhibit G. Lender shall have the right at any time following the occurrence and during the continuance of an Event of Default to approve each Operating Budget in Lender’s reasonable discretion. In the event that Lender objects to the proposed Operating Budget submitted by Borrower, Lender shall advise Borrower of such objections within fifteen (153) Business Days after receipt thereof (the effective date of each Annual budget and deliver to Borrower a reasonably detailed description of such objection) and any amendment thereto, the Borrower shall promptly revise such Operating Budget and resubmit provide a copy of the same to Lender. Lender shall advise Borrower of any objections to such revised Operating Budget within ten (10) Business Days after receipt thereof (and deliver to Borrower a reasonably detailed description of such objection) and Borrower shall promptly revise the same in accordance with the process described in this sentence until Lender approves an Operating Budget. Each such Operating Budget approved by Lender in accordance with terms hereof shall hereinafter be referred to as an “Approved Operating BudgetCollateral Trustee.”

Annual Operating Budget. Borrower shall prepare and Manager shall, on or before December 20 in each calendar year during the Term, deliver to LenderLicensee for Licensee’s approval, an annual operating budget for the Licensed Facility for the next calendar year (the “Annual Operating Budget”) which shall include separate line items for Capital Replacements and set forth an estimate, on a monthly basis, of Gross Revenues and Licensed Facility Expenses, together with an explanation of anticipated changes to Resident charges, payroll rates and positions, non-wage cost increases, the proposed methodology and formula employed by Manager in allocating shared Licensed Facility Expenses, and all other factors differing from the then current calendar year. The Annual Operating Budget shall be accompanied by a narrative description of operating objectives and assumptions. If Licensee does not approve an Annual Operating Budget or any portion thereof, it shall do so, to the extent practicable, on a line item basis. Manager and Licensee shall cooperate to resolve disputed items, provided if the Annual Operating Budget is not approved by Licensee within thirty (30) days of Licensee’s receipt, Manager shall operate under the expired Annual Operating Budget until a new Annual Operating Budget is approved, provided that line items for Impositions, insurance premiums and utilities shall be the amounts actually incurred for such items. If agreement on the Annual Operating Budget cannot be reached within forty-five (45) days of Licensee’s receipt (which time may be extended upon mutual agreement of the parties), the matter shall be resolved by arbitration. The Annual Operating Budget as approved by Licensee, or as resolved by arbitration, will be the “Approved Budget” for the applicable calendar year. Manager will obtain Licensee’s prior approval for any expenditure which will, or is reasonably expected to, result in a variance of 5% or more of any Approved Budget. Notwithstanding any provision in this Agreement to the beginning contrary, Licensee shall retain independent approval of each calendar year, an annual expenditure budget for (A) Borrower all operating and its Subsidiaries capital budgets and (B) each Property, Manager’s authority to make expenditures and in each case showing, in reasonable detail (i) each line item to incur obligations on behalf of anticipated income and operating expenses, including amounts required to establish, maintain, and/or increase reserves, and (ii) each line item of anticipated Capital Expenditures (“Operating Budget”). The Operating Budget shall also include a business plan (“Business Plan”) for Borrower’s and its Subsidiaries’ proposed operations during the forthcoming calendar year which shall include a projection of income and expenses for the coming year(“Projections”). The Operating Budget Licensed Facility shall be prepared at all times subject to and submitted in a form reasonably acceptable to Lender. The Operating Budget for each Property through December 31, 2006 is attached hereto as Exhibit G. Lender shall have limited by Licensee’s independent authority over the right at any time following the occurrence and during the continuance of an Event of Default to approve each Operating Budget in Lender’s reasonable discretion. In the event that Lender objects to the proposed Operating Budget submitted by Borrower, Lender shall advise Borrower of such objections within fifteen (15) Business Days after receipt thereof (and deliver to Borrower a reasonably detailed description of such objection) and Borrower shall promptly revise such Operating Budget and resubmit the same to Lender. Lender shall advise Borrower of any objections to such revised Operating Budget within ten (10) Business Days after receipt thereof (and deliver to Borrower a reasonably detailed description of such objection) and Borrower shall promptly revise the same in accordance with the process described in this sentence until Lender approves an Operating Budget. Each such Operating Budget approved by Lender in accordance with terms hereof shall hereinafter be referred to as an “Approved Operating Budgetsame.”

Annual Operating Budget. Borrower shall prepare and Manager shall, on or before December 20 in each calendar year during the Term, deliver to LenderSNH TRS for SNH TRS’s approval, an annual operating budget for the Facility for the next calendar year (the “Annual Operating Budget”) which shall include separate line items for Capital Replacements and set forth an estimate, on a monthly basis, of Gross Revenues and Facility Expenses, together with an explanation of anticipated changes to Resident charges, payroll rates and positions, non-wage cost increases, the proposed methodology and formula employed by Manager in allocating shared Facility Expenses, and all other factors differing from the then current calendar year. The Annual Operating Budget shall be accompanied by a narrative description of operating objectives and assumptions. If SNH TRS does not approve an Annual Operating Budget or any portion thereof, it shall do so, to the extent practicable, on a line item basis. Manager and SNH TRS shall cooperate to resolve disputed items, provided if the Annual Operating Budget is not approved by SNH TRS within thirty (30) days prior to of SNH TRS’s receipt, Manager shall operate under the beginning expired Annual Operating Budget until a new Annual Operating Budget is approved, provided that line items for Impositions, insurance premiums and utilities shall be the amounts actually incurred for such items. If agreement on the Annual Operating Budget cannot be reached within forty-five (45) days of each SNH TRS’s receipt (which time may be extended upon mutual agreement of the parties), the matter shall be resolved by arbitration. The Annual Operating Budget as approved by SNH TRS, or as resolved by arbitration, will be the “Approved Budget” for the applicable calendar year. Manager will obtain SNH TRS’s prior approval for any expenditure which will, an annual expenditure budget for (A) Borrower and its Subsidiaries and (B) each Propertyor is reasonably expected to, and in each case showing, in reasonable detail (i) each line item of anticipated income and operating expenses, including amounts required to establish, maintain, and/or increase reserves, and (ii) each line item of anticipated Capital Expenditures (“Operating Budget”). The Operating Budget shall also include a business plan (“Business Plan”) for Borrower’s and its Subsidiaries’ proposed operations during the forthcoming calendar year which shall include a projection of income and expenses for the coming year(“Projections”). The Operating Budget shall be prepared and submitted result in a form reasonably acceptable to Lendervariance of 5% or more of any Approved Budget. The Operating Budget for each Property through For that portion of the Term ending December 31, 2006 is attached hereto 2015, except as Exhibit G. Lender shall have otherwise agreed by SNH TRS and Manager, the right at any time following Approved Budget will be the occurrence and during budget of the continuance prior manager of an Event the Facility, a copy of Default which has been previously provided to approve each Operating Budget in Lender’s reasonable discretion. In the event that Lender objects to the proposed Operating Budget submitted by Borrower, Lender shall advise Borrower of such objections within fifteen (15) Business Days after receipt thereof (and deliver to Borrower a reasonably detailed description of such objection) and Borrower shall promptly revise such Operating Budget and resubmit the same to Lender. Lender shall advise Borrower of any objections to such revised Operating Budget within ten (10) Business Days after receipt thereof (and deliver to Borrower a reasonably detailed description of such objection) and Borrower shall promptly revise the same in accordance with the process described in this sentence until Lender approves an Operating Budget. Each such Operating Budget approved by Lender in accordance with terms hereof shall hereinafter be referred to as an “Approved Operating BudgetManager.”

Annual Operating Budget. Borrower shall prepare and Manager shall, on or before December 20 in each calendar year during the Term, deliver to LenderOwner for Owner’s approval, an annual operating budget for the Community for the next calendar year (the “Annual Operating Budget”) which shall include separate line items for Capital Replacements and set forth an estimate, on a monthly basis, of Gross Revenues and Community Expenses, together with an explanation of anticipated changes to Tenants charges, payroll rates and positions, non-wage cost increases, the proposed methodology and formula employed by Manager in allocating shared Community Expenses, and all other factors differing from the then current calendar year. The Annual Operating Budget shall be accompanied by a narrative description of operating objectives and assumptions. If Owner does not approve an Annual Operating Budget or any portion thereof, it shall do so, to the extent practicable, on a line item basis. Manager and Owner shall cooperate to resolve disputed items, provided if the Annual Operating Budget is not approved by Owner within thirty (30) days prior to of Owner’s receipt, Manager shall operate under the beginning expired Annual Operating Budget until a new Annual Operating Budget is approved, provided that line items for Impositions, insurance premiums and utilities shall be the amounts actually incurred for such items. If agreement on the Annual Operating Budget cannot be reached within forty-five (45) days of each Owner’s receipt (which time may be extended upon mutual agreement of the parties), the matter shall be resolved by arbitration. The Annual Operating Budget as approved by Owner, or as resolved by arbitration, will be the “Approved Budget” for the applicable calendar year. Manager will obtain Owner’s prior approval for any expenditure which will, an annual expenditure budget for (A) Borrower and its Subsidiaries and (B) each Propertyor is reasonably expected to, and in each case showing, in reasonable detail (i) each line item of anticipated income and operating expenses, including amounts required to establish, maintain, and/or increase reserves, and (ii) each line item of anticipated Capital Expenditures (“Operating Budget”). The Operating Budget shall also include a business plan (“Business Plan”) for Borrower’s and its Subsidiaries’ proposed operations during the forthcoming calendar year which shall include a projection of income and expenses for the coming year(“Projections”). The Operating Budget shall be prepared and submitted result in a form reasonably acceptable to Lender. The Operating Budget for each Property through December 31, 2006 is attached hereto as Exhibit G. Lender shall have the right at any time following the occurrence and during the continuance variance of an Event of Default to approve each Operating Budget in Lender’s reasonable discretion. In the event that Lender objects to the proposed Operating Budget submitted by Borrower, Lender shall advise Borrower of such objections within fifteen (15) Business Days after receipt thereof (and deliver to Borrower a reasonably detailed description of such objection) and Borrower shall promptly revise such Operating Budget and resubmit the same to Lender. Lender shall advise Borrower 5% or more of any objections to such revised Operating Budget within ten (10) Business Days after receipt thereof (and deliver to Borrower a reasonably detailed description of such objection) and Borrower shall promptly revise the same in accordance with the process described in this sentence until Lender approves an Operating Budget. Each such Operating Budget approved by Lender in accordance with terms hereof shall hereinafter be referred to as an “Approved Operating Budget.”

Annual Operating Budget. Borrower shall prepare and Manager shall, on or before December 20 in each calendar year during the Term, deliver to LenderSNH TRS for SNH TRS’s approval, an annual operating budget for the Facility for the next calendar year (the “Annual Operating Budget”) which shall include separate line items for Capital Replacements and set forth an estimate, on a monthly basis, of Gross Revenues and Facility Expenses, together with an explanation of anticipated changes to Resident charges, payroll rates and positions, non-wage cost increases, the proposed methodology and formula employed by Manager in allocating shared Facility Expenses, and all other factors differing from the then current calendar year. The Annual Operating Budget shall be accompanied by a narrative description of operating objectives and assumptions. If SNH TRS does not approve an Annual Operating Budget or any portion thereof, it shall do so, to the extent practicable, on a line item basis. Manager and SNH TRS shall cooperate to resolve disputed items, provided if the Annual Operating Budget is not approved by SNH TRS within thirty (30) days prior to of SNH TRS’s receipt, Manager shall operate under the beginning expired Annual Operating Budget until a new Annual Operating Budget is approved, provided that line items for Impositions, insurance premiums and utilities shall be the amounts actually incurred for such items. If agreement on the Annual Operating Budget cannot be reached within forty-five (45) days of each SNH TRS’s receipt (which time may be extended upon mutual agreement of the parties), the matter shall be resolved by arbitration. The Annual Operating Budget as approved by SNH TRS, or as resolved by arbitration, will be the “Approved Budget” for the applicable calendar year. Manager will obtain SNH TRS’s prior approval for any expenditure which will, an annual expenditure budget for (A) Borrower and its Subsidiaries and (B) each Propertyor is reasonably expected to, and in each case showing, in reasonable detail (i) each line item of anticipated income and operating expenses, including amounts required to establish, maintain, and/or increase reserves, and (ii) each line item of anticipated Capital Expenditures (“Operating Budget”). The Operating Budget shall also include a business plan (“Business Plan”) for Borrower’s and its Subsidiaries’ proposed operations during the forthcoming calendar year which shall include a projection of income and expenses for the coming year(“Projections”). The Operating Budget shall be prepared and submitted result in a form reasonably acceptable to Lender. The Operating Budget for each Property through December 31, 2006 is attached hereto as Exhibit G. Lender shall have the right at any time following the occurrence and during the continuance variance of an Event of Default to approve each Operating Budget in Lender’s reasonable discretion. In the event that Lender objects to the proposed Operating Budget submitted by Borrower, Lender shall advise Borrower of such objections within fifteen (15) Business Days after receipt thereof (and deliver to Borrower a reasonably detailed description of such objection) and Borrower shall promptly revise such Operating Budget and resubmit the same to Lender. Lender shall advise Borrower 5% or more of any objections to such revised Operating Budget within ten (10) Business Days after receipt thereof (and deliver to Borrower a reasonably detailed description of such objection) and Borrower shall promptly revise the same in accordance with the process described in this sentence until Lender approves an Operating Budget. Each such Operating Budget approved by Lender in accordance with terms hereof shall hereinafter be referred to as an “Approved Operating Budget.”

Annual Operating Budget. Borrower shall prepare and Manager shall, on or before December 20 in each calendar year during the Term, deliver to LenderSNH TRS for SNH TRS’s approval, an annual operating budget for the Facility for the next calendar year (the “Annual Operating Budget”) which shall include separate line items for Capital Replacements and set forth an estimate, on a monthly basis, of Gross Revenues and Facility Expenses, together with an explanation of anticipated changes to Resident charges, payroll rates and positions, non-wage cost increases, the proposed methodology and formula employed by Manager in allocating shared Facility Expenses, and all other factors differing from the then current calendar year. The Annual Operating Budget shall be accompanied by a narrative description of operating objectives and assumptions. If SNH TRS does not approve an Annual Operating Budget or any portion thereof, it shall do so, to the extent practicable, on a line item basis. Manager and SNH TRS shall cooperate to resolve disputed items, provided if the Annual Operating Budget is not approved by SNH TRS within thirty (30) days prior to of SNH TRS’s receipt, Manager shall operate under the beginning expired Annual Operating Budget until a new Annual Operating Budget is approved, provided that line items for Impositions, insurance premiums and utilities shall be the amounts actually incurred for such items. If agreement on the Annual Operating Budget cannot be reached within forty-five (45) days of each SNH TRS’s receipt (which time may be extended upon mutual agreement of the parties), the matter shall be resolved by arbitration. The Annual Operating Budget as approved by SNH TRS, or as resolved by arbitration, will be the “Approved Budget” for the applicable calendar year. Manager will obtain SNH TRS’s prior approval for any expenditure which will, an annual expenditure budget for (A) Borrower and its Subsidiaries and (B) each Propertyor is reasonably expected to, and in each case showing, in reasonable detail (i) each line item of anticipated income and operating expenses, including amounts required to establish, maintain, and/or increase reserves, and (ii) each line item of anticipated Capital Expenditures (“Operating Budget”). The Operating Budget shall also include a business plan (“Business Plan”) for Borrower’s and its Subsidiaries’ proposed operations during the forthcoming calendar year which shall include a projection of income and expenses for the coming year(“Projections”). The Operating Budget shall be prepared and submitted result in a form reasonably acceptable to Lendervariance of five percent (5%) or more of any Approved Budget. The Operating Budget for each Property through For that portion of the Term ending December 31, 2006 is attached hereto [2017], except as Exhibit G. Lender shall have otherwise agreed by SNH TRS and Manager, the right at any time following Approved Budget will be the occurrence and during budget of the continuance prior manager of an Event the Facility, a copy of Default which has been previously provided to approve each Operating Budget in Lender’s reasonable discretion. In the event that Lender objects to the proposed Operating Budget submitted by Borrower, Lender shall advise Borrower of such objections within fifteen (15) Business Days after receipt thereof (and deliver to Borrower a reasonably detailed description of such objection) and Borrower shall promptly revise such Operating Budget and resubmit the same to Lender. Lender shall advise Borrower of any objections to such revised Operating Budget within ten (10) Business Days after receipt thereof (and deliver to Borrower a reasonably detailed description of such objection) and Borrower shall promptly revise the same in accordance with the process described in this sentence until Lender approves an Operating Budget. Each such Operating Budget approved by Lender in accordance with terms hereof shall hereinafter be referred to as an “Approved Operating BudgetManager.”

Annual Operating Budget. Borrower shall prepare and Manager shall, on or before November 20 in each calendar year during the Term, deliver to LenderCompany for Company’s approval, within thirty an annual operating budget for the Community for the next calendar year (30the “Annual Operating Budget”) days prior to the beginning which shall include separate line items for Capital Replacements and set forth an estimate, on a monthly basis, of each Gross Revenues and Community Expenses, as well as an estimate of EBITDA for such calendar year, together with an annual expenditure budget for (A) Borrower explanation of anticipated changes to Resident charges, payroll rates and its Subsidiaries positions, non-wage cost increases, the proposed methodology and (B) each Propertyformula employed by Manager in allocating shared Community Expenses, and in each case showing, in reasonable detail (i) each line item of anticipated income and operating expenses, including amounts required to establish, maintain, and/or increase reserves, and (ii) each line item of anticipated Capital Expenditures (“Operating Budget”)all other factors differing from the then current calendar year. The Operating Budget shall also include a business plan (“Business Plan”) for Borrower’s and its Subsidiaries’ proposed operations during the forthcoming calendar year which shall include a projection of income and expenses for the coming year(“Projections”). The Annual Operating Budget shall be prepared accompanied by a narrative description of operating objectives and submitted assumptions. If Company does not approve an Annual Operating Budget or any portion thereof, it shall do so, to the extent practicable, on a line item basis. Manager and Company shall cooperate to resolve disputed items, provided if the Annual Operating Budget is not approved by Company, Manager shall operate under the expired Annual Operating Budget until a new Annual Operating Budget is approved, provided that line items for Impositions, insurance premiums and utilities shall be the amounts actually incurred for such items. If agreement on the Annual Operating Budget cannot be reached within forty-five (45) days of Company’s receipt (which time may be extended upon mutual agreement of the parties), the matter shall be resolved by arbitration. The Annual Operating Budget as approved by Company, or as resolved by arbitration, will be the “Approved Budget” for the applicable calendar year. Except for expenditures incurred to remedy any emergency threatening the safety of the Community or its Residents, invitees or employees or imminent material physical damage to the Community (for which Manager shall provide Company an accounting promptly after remedying such emergency), Manager will obtain Company’s prior approval for any expenditure which will, or is reasonably expected to, result in a form reasonably acceptable variance equal to Lender. The Operating Budget for each Property through December 31, 2006 is attached hereto as Exhibit G. Lender shall have or greater than five percent (5%) of the right at any time following the occurrence and during the continuance of an Event of Default to approve each Operating Budget in Lender’s reasonable discretion. In the event that Lender objects to the proposed Operating Budget submitted by Borrower, Lender shall advise Borrower of such objections within fifteen (15) Business Days after receipt thereof (and deliver to Borrower a reasonably detailed description of such objection) and Borrower shall promptly revise such Operating Budget and resubmit the same to Lender. Lender shall advise Borrower of any objections to such revised Operating Budget within ten (10) Business Days after receipt thereof (and deliver to Borrower a reasonably detailed description of such objection) and Borrower shall promptly revise the same in accordance with the process described in this sentence until Lender approves an Operating Budget. Each such Operating Budget approved by Lender in accordance with terms hereof shall hereinafter be referred to as an “Approved Operating Budget.”

Annual Operating Budget. Borrower shall prepare and The Manager shall, on or before November 20 in each calendar year during the Term, deliver to Lenderthe applicable Company for approval, within thirty an annual operating budget for each Community for the next calendar year (30each, an “Annual Operating Budget”) days prior to the beginning which shall include separate line items for Routine Capital Replacements and any Major Renovation or Repositioning for that Community and set forth an estimate, on a monthly basis, of each Gross Revenues and Community Expenses for that Community, as well as an estimate of EBITDA for that Community for such calendar year, together with an annual expenditure budget for (A) Borrower explanation of anticipated changes to Resident charges, payroll rates and its Subsidiaries positions, non-wage cost increases, the proposed methodology and (B) each Propertyformula employed by the Manager in allocating shared Community Expenses, and in each case showing, in reasonable detail (i) each line item of anticipated income and operating expenses, including amounts required to establish, maintain, and/or increase reserves, and (ii) each line item of anticipated Capital Expenditures (“Operating Budget”)all other factors differing from the then current calendar year. The Operating Budget shall also include a business plan (“Business Plan”) for Borrower’s and its Subsidiaries’ proposed operations during the forthcoming calendar year which shall include a projection of income and expenses for the coming year(“Projections”). The Each Annual Operating Budget shall be prepared accompanied by a narrative description of operating objectives and submitted in assumptions. If a form reasonably acceptable Company does not approve an Annual Operating Budget or any portion thereof, it shall do so, to Lenderthe extent practicable, on a line item basis. The Manager and each Company shall cooperate to resolve disputed items, provided if the Annual Operating Budget is not approved by a Company, the Manager shall operate under the expired Annual Operating Budget for each Property through December 31, 2006 is attached hereto as Exhibit G. Lender shall have the right at any time following the occurrence and during the continuance of an Event of Default to approve each applicable Community until a new Annual Operating Budget in Lender’s reasonable discretionis approved, provided that line items for Impositions, insurance premiums and utilities for that Community shall be the amounts actually incurred for such items. In the event that Lender objects to the proposed If agreement on an Annual Operating Budget submitted cannot be reached within forty-five (45) days of the applicable Company’s receipt (which time may be extended upon mutual agreement of the parties), the matter shall be resolved by Borrower, Lender shall advise Borrower of such objections within fifteen (15) Business Days after receipt thereof (and deliver to Borrower a reasonably detailed description of such objection) and Borrower shall promptly revise such arbitration. An Annual Operating Budget and resubmit the same to Lender. Lender shall advise Borrower of any objections to such revised Operating Budget within ten (10) Business Days after receipt thereof (and deliver to Borrower a reasonably detailed description of such objection) and Borrower shall promptly revise the same in accordance with the process described in this sentence until Lender approves an Operating Budget. Each such Operating Budget as approved by Lender in accordance with terms hereof shall hereinafter the applicable Company, or as resolved by arbitration, will be referred to as an the “Approved Operating Budget” for the applicable Community for the applicable calendar year. Except for expenditures incurred to remedy any emergency threatening the safety of a Community or its Residents, invitees or employees or imminent material physical damage to a Community (for which the Manager shall provide the applicable Company an accounting promptly after remedying such emergency), the Manager will obtain the applicable Company’s prior approval for any expenditure which will, or is reasonably expected to, result in a variance equal to or greater than five percent (5%) of the Approved Budget for the applicable Community.”

Annual Operating Budget. Borrower shall prepare and deliver to Lender, within thirty forty-five (3045) days prior to the beginning of each calendar year, an annual expenditure budget for (A) Holdings and its Subsidiaries, (B) Borrower and its Subsidiaries and (BC) each Expanded Property, and in each case showing, on a month-by-month basis, in reasonable detail (i) each line item of anticipated income and operating expenses, including amounts required to establish, maintain, and/or increase reserves, and (ii) each line item of anticipated Capital Expenditures (“"Operating Budget”"). The Operating Budget shall also include a business plan (“"Business Plan”") for Borrower’s Holdings' and its Subsidiaries’ ' proposed operations during the forthcoming calendar year which shall include a projection of income and expenses for the coming year(“Projections”)year. The Operating Budget shall be prepared and submitted in a form reasonably acceptable to LenderLender and shall set forth in reasonable detail budgeted capital, operating and other expenses, including without limitation the salaries and potential bonuses and other compensation of directors, officers and employees of Holdings and its Subsidiaries. The Operating Budget for each Property through December 31, 2006 2001 is attached hereto as Exhibit G. Lender shall have the right at any time following the occurrence and during the continuance of an Event of Default to approve each Operating Budget in Lender’s reasonable 's sole and absolute discretion. In the event that Lender objects to the proposed Operating Budget submitted by Borrower, Lender shall advise Borrower of such objections within fifteen (15) Business Days after receipt thereof (and deliver to Borrower a reasonably detailed description of such objection) and Borrower shall promptly revise such Operating Budget and resubmit the same to Lender. Lender shall advise Borrower of any objections to such revised Operating Budget Budget, in Lender's sole and absolute discretion, within ten (10) Business Days after receipt thereof (and deliver to Borrower a reasonably detailed description of such objection) and Borrower shall promptly revise the same in accordance with the process described in this sentence until Lender approves an Operating Budget, in Lender's sole and absolute discretion. Each such Operating Budget approved by Lender in accordance with terms hereof shall hereinafter be referred to as an “"Approved Operating Budget.”"........................42 6.7

Annual Operating Budget. Borrower shall prepare and deliver to Lender, within thirty (30) days prior to the beginning of each calendar year, an annual expenditure budget for (A) Borrower and its Subsidiaries and (B) each the Property, and in each case showing, in reasonable detail (i) each line item of anticipated income and operating expenses, including amounts required to establish, maintain, and/or increase reserves, and (ii) each line item of anticipated Capital Expenditures (“Operating Budget”). The Operating Budget shall also include a business plan (“Business Plan”) for Borrower’s and its Subsidiaries’ proposed operations during the forthcoming calendar year which shall include a projection of income and expenses for the coming year(“Projections”). The Operating Budget shall be prepared and submitted in a form reasonably acceptable to Lender. The Operating Budget for each the Property through December 31, 2006 is attached hereto as Exhibit G. Lender shall have the right at any time following the occurrence and during the continuance of an Event of Default to approve each Operating Budget in Lender’s reasonable discretion. In the event that Lender objects to the proposed Operating Budget submitted by Borrower, Lender shall advise Borrower of such objections within fifteen (15) Business Days after receipt thereof (and deliver to Borrower a reasonably detailed description of such objection) and Borrower shall promptly revise such Operating Budget and resubmit the same to Lender. Lender shall advise Borrower of any objections to such revised Operating Budget within ten (10) Business Days after receipt thereof (and deliver to Borrower a reasonably detailed description of such objection) and Borrower shall promptly revise the same in accordance with the process described in this sentence until Lender approves an Operating Budget. Each such Operating Budget approved by Lender in accordance with terms hereof shall hereinafter be referred to as an “Approved Operating Budget.”

Annual Operating Budget. Borrower shall prepare and deliver to Lender, within 7.01 Not later than thirty (30) days prior to before the beginning end of each calendar yearFiscal Year after the Opening Date during the Term, an annual expenditure Manager shall prepare in advance and deliver to Tenant for Tenant’s approval, which shall not be unreasonably withheld or delayed, a Capital Budget, Marketing Budget and operations budget for the next Fiscal Year for the Facility (A) Borrower in which each proposed expenditure will be designated either as required or desirable), setting forth an estimate of Non-Routine Capital Expenditures, Total Facility Revenues and its Subsidiaries Facility Expenses, together with an explanation of anticipated changes to Resident charges, occupancy fees, payroll rates and (B) each Propertypositions, non-wage cost increases, and in each case showingall other factors differing from the current Fiscal Year. The budget, in reasonable detail as proposed (i) each line item of anticipated income and operating expenses, including amounts required to establish, maintain, and/or increase reserves, and (ii) each line item of anticipated Capital Expenditures (the “Annual Operating Budget”). The Operating Budget , shall also include a business plan (“Business Plan”) for Borrower’s be considered by Tenant and, in consultation between Tenant and its Subsidiaries’ proposed operations during Manager, the forthcoming calendar year which shall include a projection of income and expenses budget for the coming year(“Projections”)Facility for the ensuing Fiscal Year will be prepared by the Manager with the final contents of the budget to be determined mutually by Manager and Tenant. The If there is a delay in the preparation of the proposed Annual Operating Budget, or if Tenant shall fail to approve the proposed Annual Operating Budget, Manager shall operate under the expired Approved Budget (increased but not decreased by the GDP Deflator) until a new budget is approved. If consensus cannot be reached between the parties as to the Approved Budget within sixty (60) days of Tenant’s receipt of the proposed Annual Operating Budget, the matter shall be submitted to the Expert to determine, pursuant to Section 18.12, whether Tenant unreasonably withheld or delayed its approval of the proposed Annual Operating Budget, and such determination shall be final and binding on the parties. If the Expert determines that Tenant unreasonably withheld or delayed such approval, the proposed Annual Operating Budget shall be prepared deemed the Approved Budget. Manager shall make a diligent and submitted in a form reasonably acceptable commercially reasonable effort to Lender. The Operating operate the Facility as provided herein so that the actual Total Facility Revenues and Facility Expenses of the Facility during any Fiscal Year shall be consistent with the Approved Budget for each Property through December 31, 2006 is attached hereto that Fiscal Year. Except as Exhibit G. Lender shall have the right at any time following the occurrence otherwise expressly provided for in this Agreement and during the continuance of an Event of Default to approve each Operating Budget in Lender’s reasonable discretion. In the event that Lender objects except for expenditures relating to the proposed Operating Budget submitted by Borrowerhealth and safety of Residents or Facility employees, Lender Manager shall advise Borrower not make expenditures for any item aggregating materially in excess of such objections within fifteen the amount budgeted, defined as more than the greater of five percent (15) Business Days after receipt thereof (and deliver to Borrower a reasonably detailed description of such objection5%) and Borrower shall promptly revise such Operating Budget Five Thousand and resubmit NO/100 Dollars ($5,000.00) of each budgeted Facility Expense line item for the same to Lender. Lender shall advise Borrower of any objections to such revised Operating Budget within ten (10) Business Days after receipt thereof (and deliver to Borrower a reasonably detailed description of such objection) and Borrower shall promptly revise the same in accordance with the process described in this sentence until Lender approves an Operating Budget. Each such Operating Budget approved by Lender in accordance with terms hereof shall hereinafter be referred to as an “Approved Operating BudgetFacility, without Tenant’s prior written approval.”

Annual Operating Budget. Borrower Borrowers shall prepare and deliver to LenderAdministrative Agent (with sufficient copies for each of the Lenders), within thirty (30) days prior to on or before the beginning of each calendar yearFiscal Year of Borrowers, an annual expenditure operating budget for each Asset including all planned capital expenditures for each Asset for such ensuing Fiscal Year (A) Borrower and its Subsidiaries and (B) each Property, and in each case showing, in reasonable detail (i) each line item of anticipated income and operating expenses, including amounts required to establish, maintain, and/or increase reserves, and (ii) each line item of anticipated Capital Expenditures (“Operating Budget”the "ANNUAL OPERATING BUDGET"). The Operating Budget shall also include a business plan (“Business Plan”) for Borrower’s and its Subsidiaries’ proposed operations during the forthcoming calendar year which shall include a projection of income and expenses for the coming year(“Projections”). The Annual Operating Budget shall be prepared and submitted in a form reasonably acceptable to LenderAdministrative Agent and shall set forth in reasonable detail budgeted monthly Gross Income from Operations and monthly capital and other expenses for the Property. The Each Annual Operating Budget for each Property through December 31shall contain, 2006 is attached hereto among other things, limitations on management fees and third party service fees, as Exhibit G. Lender required hereunder. Administrative Agent shall have the right at any time following the occurrence and during the continuance of an to approve each proposed Annual Operating Budget, which approval as long as no Event of Default is continuing (i) shall not be unreasonably withheld and (ii) shall be deemed given in the event Administrative Agent fails to respond to Borrowers' written request to approve each a proposed Annual Operating Budget within thirty (30) days after receipt by Administrative Agent of such request accompanied by the proposed Annual Operating Budget and all information required in Lender’s reasonable discretionorder to adequately review the same, and Borrowers send an additional written request for approval and Administrative Agent fails to respond to Borrowers' second request within ten (10) days thereof. In the event that Lender Administrative Agent's approval is required and Administrative Agent objects to the proposed Annual Operating Budget submitted by BorrowerBorrowers, Lender Administrative Agent shall advise Borrower Borrowers of such objections within fifteen (15) Business Days after receipt thereof (and deliver to Borrower Borrowers a reasonably detailed description of such objection) and Borrower Borrowers shall promptly revise such Annual Operating Budget and resubmit the same to LenderAdministrative Agent. Lender Administrative Agent shall advise Borrower Borrowers of any objections to such revised Annual Operating Budget within ten fourteen (1014) Business Days days after receipt thereof (and deliver to Borrower Borrowers a reasonably detailed description of such objection) and Borrower Borrowers shall promptly revise the same in accordance with the process described in this sentence until Lender Administrative Agent approves an Annual Operating Budget. Notwithstanding anything to the contrary contained in this clause (q), any Annual Operating Budget submitted at any time other than during a Cash Trap Period shall not require the approval of Administrative Agent; provided, however, that if Administrative Agent has not approved the Annual Operating Budget in effect at the time a Cash Trap Event occurs, Administrative Agent shall have the right to approve such Annual Operating Budget. Each such Annual Operating Budget approved or not requiring approval by Lender Administrative Agent in accordance with terms hereof shall hereinafter be referred to as an “Approved "APPROVED ANNUAL OPERATING BUDGET." Until such time that Administrative Agent approves a proposed Annual Operating Budget, the most recently Approved Annual Operating Budget shall apply; provided that such Approved Annual Operating Budget shall be adjusted to reflect actual increases in real estate taxes, insurance premiums and utilities expenses.”

Annual Operating Budget. Borrower shall prepare and Manager shall, within the time limits set forth on Exhibit E, deliver to Lender, within thirty (30) days prior to the beginning of each calendar year, an annual expenditure Owner for Owner’s approval a draft operations budget for (A) Borrower and its Subsidiaries and (B) each Propertythe next Fiscal Year for the Facility, and a final operations budget, and set forth an estimate, on an Accounting Period basis, of Gross Revenues and Facility Expenses, together with an explanation of anticipated changes to resident charges, payroll rates and positions, non-wage cost increases, the proposed methodology and formula employed by Manager in each case showingallocating Shared Expenses, and all other factors differing from the current Fiscal Year. The budget, as proposed, shall be considered by Owner and, in reasonable detail consultation between Owner and Manager, the budget for the Facility for the ensuing Fiscal Year will be prepared by the Manager with the final contents of the budget to be determined mutually by Manager and Owner (i) each line item of anticipated income and operating expenses, including amounts required to establish, maintain, and/or increase reserves, and (ii) each line item of anticipated Capital Expenditures (the “Annual Operating Budget”). The proposed Annual Operating Budget shall also include include, in form and content at least consistent with that provided for in the 2010 Annual Operating Budget, a business plan (“Business Plan”) for Borrower’s narrative description of underlying assumptions, operating objectives and its Subsidiaries’ proposed operations during the forthcoming calendar year which shall include a projection of income and expenses for the coming year(“Projections”)relevant competitive analysis. The Operating Budget Such annual budget process shall be prepared conducted on an open book basis, and submitted in a form reasonably acceptable to Lender. The Operating Budget for each Property through December 31, 2006 is attached hereto as Exhibit G. Lender Owner shall have the right right, at any time following the occurrence and all reasonable times during the continuance usual business hours of the Manager, to examine and make copies of books of account and other information (including electronic copies thereof) maintained or collected by Manager and its Affiliates with respect to each item to be included in the budget. Such right may be exercised through any agent or employee designated by Owner or by an Event of Default independent public accountant or chartered accountant designated by Owner. If the new Annual Operating Budget is not finalized, or if Owner shall fail to approve the newly proposed budget, in each case, by December 15 of the then expiring year, Manager shall operate under the expired Annual Operating Budget Budget, increased by 50% of the percentage change in Lender’s reasonable discretion. In the event that Lender objects Index between October of such expiring year and October of the year immediately preceding such expiring year, until a new budget is approved or determined pursuant to the proposed Operating Budget submitted by Borrowerprocedures established in Section 7.2; provided, Lender however that if [the BLS / Statistics Canada] changes the publication frequency of the Index so that the Index is not available for October of the applicable year, adjustment shall advise Borrower be based on fifty percent (50%) of such objections within fifteen (15) Business Days after receipt thereof (the percentage difference between the Index for the closest preceding month for which the Index is available and deliver to Borrower a reasonably detailed description of such objection) and Borrower shall promptly revise such Operating Budget and resubmit the Index for the same to Lendermonth of the preceding year. Lender shall advise Borrower of During any objections to such revised period the Facility is operating under the expired Annual Operating Budget within ten (10) Business Days after receipt thereof (and deliver to Borrower a reasonably detailed description of such objection) and Borrower shall promptly revise Budget, variance reports will be based on the same in accordance with the process described in this sentence until Lender approves an expired Annual Operating Budget. Each such Operating Budget approved by Lender in accordance Manager shall use diligent and good faith efforts to operate the Facility as provided herein so that the actual Gross Revenues, costs, and Facility Expenses of the Facility during any applicable period of Owner’s fiscal year shall be at least consistent with terms hereof shall hereinafter be referred to as an “Approved the Annual Operating Budget.”

Annual Operating Budget. Borrower Attached hereto as Exhibit E is an initial operating budget for the Managed Premises for the period from the Soft Opening Date through the end of calendar year 2000. On or prior to September 1, 2001 and on every November 15th thereafter during the Term, Manager shall prepare and deliver to LenderOwner, within thirty for Owner's approval (30which approval shall not be unreasonably withheld or delayed) days prior to a proposed draft of the beginning annual operating budget ("Draft Annual Operating Budget") for the Managed Premises in respect of each the immediately succeeding calendar year, an annual expenditure budget for (A) Borrower and its Subsidiaries and (B) each Property, and in each case showing, in reasonable detail (i) each line item of anticipated income and operating expenses, including amounts required to establish, maintain, and/or increase reserves, and (ii) each line item of anticipated Capital Expenditures (“Operating Budget”). The Draft Annual Operating Budget shall also include project in a business plan detailed, line item fashion the monthly (“Business Plan”with comparisons to the prior year) estimated Gross Revenues, Operating Expenses, Cash Flow and Adjusted Cash Flow for Borrower’s and its Subsidiaries’ proposed operations during the forthcoming calendar year for the Managed Premises, which shall be substantially in the same form as the initial operating budget and shall include: (I) a detailed schedule of the amounts to be transferred to the Reserve Account and all anticipated expenditures to be made from the Reserve Account, such schedule to include a projection each item of income FF&E required, the number of units to be replaced, unit costs and expenses costs in aggregate, together with such additional information as Owner shall reasonably request during the calendar year relating to any anticipated expenditures. Where color or type of style of an item is changed from the previous item, the new item shall be presented for Owner's approval (such approval not to be unreasonably withheld or delayed so long as the color or type of style is consistent with the Operating Standard); (II) the program for the coming year(“Projections”advertising of and marketing the Managed Premises for the forthcoming calendar year containing a detailed itemization of the proposed expenditures by category. Assumptions forming the basis of such itemization shall be presented in narrative form. Such advertising and marketing -23- <PAGE> program may include advertising in which the Managed Premises participates with one or more other restaurants owned or controlled by Manager's Affiliates which operate at a level of quality consistent with the Operating Standard, in which case the cost shall be included as part of Group Services; (III) a detailed staffing plan, with a description of each position, the number of employees at each position, the estimated cost thereof and an explanation of any proposed changes from previously Approved Annual Operating Budgets; and (IV) a detailed schedule of the Group Services to be provided by Manager, the total cost therefor and the portion thereof to be allocated to the Managed Premises and the basis for such allocation, which shall be consistent with the requirements of Section 22(c). The (b) Manager shall promptly modify the proposed Draft Annual Operating Budget as reasonably requested by Owner and resubmit the same to Owner for its approval (such approval not to be unreasonably withheld or delayed), and, upon approval of the draft, as so modified, the same shall be deemed the "Approved Annual Operating Budget" for all purposes of this Agreement. If Owner and Manager are unable to agree on any portion of the Draft Annual Operating Budget, Manager shall operate the Managed Premises as follows: (I) with respect to those items approved by Owner, in accordance with the Draft Annual Operating Budget and (II) with respect to those items not approved by Owner, Manager may pay non-discretionary items, the cost of which is established by an independent third-party or governmental entity and which are necessary to be incurred to operate the Managed Premises. Manager recognizes that the budgeting process is a key aspect of the Owner/Manager relationship and Manager agrees that the Annual Operating Budget shall be prepared and submitted with due diligence after consideration of all relevant factors. Manager shall use its best efforts to achieve the results projected in a form reasonably acceptable to Lender. The Operating Budget for each Property through December 31, 2006 is attached hereto as Exhibit G. Lender shall have the right at any time following the occurrence and during the continuance of an Event of Default to approve each Operating Budget in Lender’s reasonable discretion. In the event that Lender objects to the proposed Operating Budget submitted by Borrower, Lender shall advise Borrower of such objections within fifteen (15) Business Days after receipt thereof (and deliver to Borrower a reasonably detailed description of such objection) and Borrower shall promptly revise such Approved Annual Operating Budget and resubmit shall not incur any expense which is inconsistent with the same to Lender. Lender shall advise Borrower of any objections to such revised Approved Annual Operating Budget within ten except to the extent caused by reasons beyond Manager's reasonable control (10) Business Days after receipt thereof e.g., changes in inventory levels due to changes in sales, variations in utility costs and usage). (and deliver to Borrower a reasonably detailed description of such objection) and Borrower shall promptly revise the same in accordance with the process described in this sentence until Lender approves an Operating Budget. Each such Operating Budget approved by Lender in accordance with terms hereof shall hereinafter be referred to as an “Approved Operating Budget.”c)

Annual Operating Budget. Borrower shall prepare and deliver to Lender, within thirty forty-five (3045) days prior to the beginning of each calendar year, an annual expenditure budget for (A) Holdings and its Subsidiaries, (B) Borrower and its Subsidiaries and (BC) each Expanded Property, and in each case showing, on a month-by-month basis, in reasonable detail (i) each line item of anticipated income and operating expenses, including amounts required to establish, maintain, and/or increase reserves, and (ii) each line item of anticipated Capital Expenditures (“"Operating Budget”"). The Operating Budget shall also include a business plan (“"Business Plan”") for Borrower’s Holdings' and its Subsidiaries’ ' proposed operations during the forthcoming calendar year which shall include a projection of income and expenses for the coming year(“Projections”)year. The Operating Budget shall be prepared and submitted in a form reasonably acceptable to LenderLender and shall set forth in reasonable detail budgeted capital, operating and other expenses, including without limitation the salaries and potential bonuses and other compensation of directors, officers and employees of Holdings and its Subsidiaries. The Operating Budget for each Property through December 31, 2006 2001 is attached hereto as Exhibit G. Lender shall have the right at any time following the occurrence and during the continuance of an Event of Default to approve each Operating Budget in Lender’s reasonable 's sole and absolute discretion. In the event that Lender objects to the proposed Operating Budget submitted by Borrower, Lender shall advise Borrower of such objections within fifteen (15) Business Days after receipt thereof (and deliver to Borrower a reasonably detailed description of such objection) and Borrower shall promptly revise such Operating Budget and resubmit the same to Lender. Lender shall advise Borrower of any objections to such revised Operating Budget Budget, in Lender's sole and absolute discretion, within ten (10) Business Days after receipt thereof (and deliver to Borrower a reasonably detailed description of such objection) and Borrower shall promptly revise the same in accordance with the process described in this sentence until Lender approves an Operating Budget, in Lender's sole and absolute discretion. Each such Operating Budget approved by Lender in accordance with terms hereof shall hereinafter be referred to as an “"Approved Operating Budget.”"

Annual Operating Budget. Borrower shall prepare and deliver to Lender, within thirty Not later than sixty (3060) days prior after the acquisition of each Company Property with respect to the beginning balance of the Fiscal Year during which such Company Property is acquired and thereafter by no later than June 1st of each calendar year, an annual expenditure budget for (A) Borrower and its Subsidiaries and (B) each year in which the Company continues to hold such Company Property, the Officers shall submit to the Board, for the Board's Approval, proposed budgets, operating plans and leasing plans (the "ANNUAL OPERATING BUDGET") for each Company Property, as well as a description of major business objectives and challenges (including, but not limited to, vacancy, lease rollover, reletting, sale, refinance, lease option dates, major renovations, and major capital requirements) for such Company Property for the forthcoming Fiscal Year. The Annual Operating Budget also shall set forth the following on a monthly basis with annual totals, together with an explanation of all material assumptions made in each case showing, in reasonable detail determining the same: (i) each a detailed estimate of the projected Gross Revenues for the Company Property for the forthcoming Fiscal Year, which estimate shall set forth as separate line item of anticipated income and operating expensesitems the projected Gross Revenues from rent, including amounts required to establish, maintain, and/or increase reservesescalations, and each other type of revenue expected to be received in such year; (ii) a detailed estimate of the projected operating expenses for the Company Property for the forthcoming Fiscal Year, which estimate shall set forth as separate line items the projected operating expenses with respect to each line item type of anticipated Capital Expenditures expense expected to be incurred for such year; (“iii) a detailed estimate showing projected debt service payments; (iv) a detailed estimate of the projected reimbursable expenses 43 <PAGE> with respect to each type of expense expected to be incurred for such year; (v) a statement as to the projected balances of any reserves with respect to the Company Property as of the first day of the forthcoming year; (vi) a statement as to the projected additions to or disbursements from such reserves for the forthcoming Fiscal Year; (vii) an estimate of the projected Net Operating Budget”Cash Flow from such Company Property for the forthcoming Fiscal Year; (viii) a detailed description of the renovations or other capital improvements, if any, proposed to be undertaken with respect to the during the forthcoming Fiscal Year; (ix) an estimate of the total costs of the renovations or other capital improvements, if any, to be undertaken with respect to the Company Property during the forthcoming Fiscal Year together with proposed sources of funding such costs, maximum financing rates (if the proposed source is borrowings) and timing for obtaining such funds and implementing the proposed renovations or capital improvements; (x) a list of each space for which the lease then in effect will expire during the forthcoming eighteen (18) month period, and a description of the proposed terms and conditions for leasing each such vacant space for the forthcoming Fiscal Year, including, without limitation, a calculation of net effective rent for each such vacant space, and projected costs of tenant improvements and tenant allowances for each such vacant space (collectively, the "LEASING GUIDELINES"); (xi) a description of the terms and conditions proposed with respect to material contracts relating to the Company Property for the forthcoming Fiscal Year; (xii) a description of the minimum insurance coverage to be maintained with respect to the Company Property for the forthcoming Fiscal Year; and (xiii) and such other information as may be reasonably requested by the Board. The With respect to Company Properties that are build-to-suit or other new development projects, the Annual Operating Budget shall also include the Investment Report for such Company Property, including all development budgets and construction schedules included therein, together with a business plan (“Business Plan”) narrative report describing the status of such project and any realized or projected variances from the development budget and construction schedule pertaining thereto together with the Officer's recommendations for Borrower’s mitigation of any negative variances. In addition, the Officers shall provide to the Board such other financial data and its Subsidiaries’ proposed operations during other information as may be reasonably requested by the forthcoming calendar year which shall include a projection of income Board. All Annual Operating Budgets and expenses for the coming year(“Projections”). The Operating Budget other reports prepared pursuant to this Section 6.9 shall be prepared and submitted in a form reasonably acceptable to Lender. The Operating Budget for each Property through December 31, 2006 is attached hereto as Exhibit G. Lender shall have the right at any time following the occurrence and during the continuance of an Event of Default to approve each Operating Budget in Lender’s reasonable discretion. In the event that Lender objects to the proposed Operating Budget submitted by Borrower, Lender shall advise Borrower of such objections within fifteen (15) Business Days after receipt thereof (and deliver to Borrower a reasonably detailed description of such objection) and Borrower shall promptly revise such Operating Budget and resubmit the same to Lender. Lender shall advise Borrower of any objections to such revised Operating Budget within ten (10) Business Days after receipt thereof (and deliver to Borrower a reasonably detailed description of such objection) and Borrower shall promptly revise the same in accordance with United States generally accepted accounting principles consistently applied ("GAAP") unless otherwise requested by the process described in this sentence until Lender approves an Operating BudgetBoard. Each such Operating Budget approved by Lender in accordance with terms hereof shall hereinafter be referred to as an “Approved Operating Budget.”SECTION 6.10

Annual Operating Budget. Borrower With the exception of the first year, annually thereafter, but no later than December 1 of (or date to be determined by Department) each year of this Agreement or any exercised extensions, Management shall prepare provide a recommended Annual Operating Budget, Exhibit J for the twelve-month period beginning October 1 of the following year. The Annual Operating Budget including the accompanying percentages and deliver ratios shall be used by the Department and Management as a means of controlling the revenues and expenses of Management and to Lendermeasure Management’s performance under this Agreement. The Annual Operating Budget shall contain all the materials and details required in the Preliminary Budget Estimate, within thirty (30) days prior pursuant to Article 4.01 above, updated to reflect the then-current conditions and circumstances. The Annual Operating Budget shall be presented in a monthly format, in total and by operating unit, with comparisons to the beginning of each calendar yearprior year and the current year budget and actual. The Annual Operating Budget and any subsequent amendments thereto, an annual expenditure budget for (A) Borrower and its Subsidiaries and (B) each Property, and in each case showingshall be subject to approval by the Department. Management, in reasonable detail (i) making expenditures hereunder, shall not exceed the expenditure percentages and ratios that are approved annually for each line item of anticipated income and operating expensesthe approved Annual Operating Budget without the prior approval of an amendment to said Budget by the Department. Upon request of Management, including the Department shall consider, at MDAD’s discretion, modifications to the Annual Operating Budget that are reasonably necessary for effective operation and/or beneficial to the financial performance of the hotel. Monthly, in conjunction with the Monthly Financial Statement required pursuant to Article 4.04, Management shall report all deviations from the dollar amounts required to establish, maintain, and/or increase reserves, and (ii) approved for each dollar line item of anticipated Capital Expenditures (“in the Annual Operating Budget”). The Operating Budget shall also include a business plan (“Business Plan”) for Borrower’s and its Subsidiaries’ proposed operations during , so that the forthcoming calendar year which shall include a projection of income and expenses for the coming year(“Projections”). The Operating Budget shall be prepared and submitted in a form reasonably acceptable to Lender. The Operating Budget for each Property through December 31, 2006 is attached hereto as Exhibit G. Lender shall have the right at any time following the occurrence and during the continuance of an Event of Default to approve each Operating Budget in Lender’s reasonable discretionDepartment may amend such Budget. In the event that Lender objects Management is required to make expenditures in excess of the amount included in a monthly increment of the approved Annual Operating Budget because of emergencies or operational necessity such expenditures must be approved by the Department, Management shall make such expenditures and shall promptly advise the Department of such action and the Annual Operating Budget shall be amended to reflect same. Within 10 calendar days of the date of notice of award of this Agreement, Management shall submit to the Department for its consideration a proposed Annual Operating Budget submitted by Borrower, Lender for the first year of this Agreement. Approval of the Annual Operating budget shall advise Borrower not be construed as authority for Management to spend all monies budgeted. Approval of such objections within fifteen (15) Business Days after receipt thereof (and deliver to Borrower a reasonably detailed description of such objection) and Borrower shall promptly revise such the Annual Operating Budget and resubmit shall not deprive the same County of the right to Lenderexamine expenditures under this Agreement, including but not limited to expenditures previously approved or authorized in the Budget process, to determine compliance with the terms of this Agreement. Lender shall advise Borrower The terms of this Agreement cannot be modified or altered by approval of any objections to such revised Operating Budget within ten (10) Business Days after receipt thereof (and deliver to Borrower a reasonably detailed description of such objection) and Borrower shall promptly revise the same in accordance with the process described in this sentence until Lender approves an Annual Operating Budget. Each such Operating Budget approved by Lender , and, in accordance with the event of a conflict, the terms hereof of this Agreement shall hereinafter be referred to as an “Approved Operating Budgetgovern the payment obligations of the County.”

Annual Operating Budget. Borrower shall prepare and (a) Manager shall, within the time limits set forth on Exhibit C-1, deliver to Lender, within thirty (30) days prior to the beginning of each calendar year, an annual expenditure budget for (A) Borrower and its Subsidiaries and (B) each Property, and in each case showing, in reasonable detail Owner (i) each line item of anticipated income and operating expenses, including amounts required to establish, maintain, and/or increase reserves, and (ii) each line item of anticipated Capital Expenditures (“Operating Budget”). The Operating Budget shall also include a business plan (“Business Plan”) for Borrower’s and its Subsidiaries’ proposed draft annual operations during the forthcoming calendar year which shall include a projection of income and expenses budget for the coming year(“Projections”). The Operating Budget shall be prepared and submitted next Fiscal Year for the Facility in a the form reasonably acceptable to Lender. The Operating Budget for each Property through December 31, 2006 is attached hereto as Exhibit G. Lender D (the “Proposed Budget”), for Owner’s approval, (ii) an estimate, on an Accounting Period basis, of Gross Revenues and Facility Expenses, and (iii) an explanation of anticipated changes to resident charges, payroll rates and positions, non-wage cost increases, the proposed methodology and formula employed by Manager in allocating the cost of Facility Expenses, a line-item detail of any shared Facility Expenses, and all other factors differing from the then current Fiscal Year. The Proposed Budget shall have be considered by the right at any time following Owner and, upon consultation with Manager, a final annual operations budget (the occurrence and during “Approved Budget”) shall be approved based on the continuance Proposed Budget. If there is a delay in the finalization of an Event of Default to approve each Operating a new Approved Budget, or if the Proposed Budget in Lender’s reasonable discretion. In is not approved as aforesaid, Manager shall operate the event that Lender objects Facility pursuant to the proposed Operating prior Fiscal Year’s Approved Budget, increased by the greater of (i) three and one-half percent (3.5%) or (ii) any increase in the Index, until the Proposed Budget submitted is approved by BorrowerOwner. The amount of the Index increase for each Fiscal Year shall be determined by multiplying the Approved Budget for the previous Fiscal Year by a fraction, Lender the numerator of which shall advise Borrower be (i) the Index most recently published immediately prior to the next Fiscal Year, minus (ii) the Index most recently published immediately prior to the immediately preceding Fiscal Year, and the denominator of such objections within fifteen which shall be the Index most recently published immediately prior to the immediately preceding Fiscal Year. Mathematically, the Index increase calculation may be expressed as (15current Index - last year Index) Business Days after receipt thereof (and deliver ÷ last year Index. Provided that Manager is not an Affiliate of a Person holding a direct or indirect ownership interest in Owner, if consensus cannot be reached between the parties as to Borrower a reasonably detailed description of such objection) and Borrower shall promptly revise such Operating Budget and resubmit the same to Lender. Lender shall advise Borrower of any objections to such revised Operating Proposed Budget within ten sixty (1060) Business Days after days of Owner’s receipt thereof of the Proposed Budget, the dispute will be resolved exclusively by arbitration pursuant to Section 18.17 (it being acknowledged that if Manager is an Affiliate of a Person holding a direct or indirect ownership interest in Owner, such dispute will be resolved subject to and deliver to Borrower a reasonably detailed description of such objection) and Borrower shall promptly revise the same in accordance with the process described JV Agreement). Either party may initiate such arbitration. Manager shall use commercially reasonable efforts to adhere to the Approved Budgets, it is understood, however, that the Approved Budget is only a projection by Manager of estimated results and that various circumstances such as, but not limited to, the cost of labor, material, services and supplies, casualty, operation of law, or economic and market conditions may make achievement of the Approved Budget impracticable or not obtainable. Except for expenditures necessary to satisfy any Emergency Requirements, Manager will secure Owner’s prior approval if actual aggregate annual expenditures exceed the aggregate annual expenditures set forth in this sentence until Lender approves an the Approved Budget by more than 10% (the “Permitted Variance”). Notwithstanding the foregoing, Owner’s approval shall not be required if such excess actual aggregate annual expenditures (in excess of 10%) results in a Net Operating BudgetIncome margin consistent with that in the Approved Budget for the applicable year. Each such Operating Budget approved by Lender Notwithstanding anything contained herein to the contrary, any references to actions of Manager being “in accordance with terms hereof the Approved Budget” or words of similar import shall hereinafter be referred to mean the Approved Budget as an “Approved Operating Budgetadjusted by the Permitted Variance.”

Annual Operating Budget. Borrower shall prepare and deliver to Lender, within thirty (30) days prior to the beginning of each calendar year, an annual expenditure budget for (A) Borrower and its Subsidiaries and (B) each Property, and in each case showing, in reasonable detail (i) Not less than 60 and not more than 90 days before the commencement of each line item of anticipated income Fiscal Year, the Borrower shall submit to TxDOT for its review an operating plan and operating expensesbudget for the Project (collectively, including amounts required to establish, maintain, and/or increase reserves, and (ii) each line item of anticipated Capital Expenditures (an “Annual Operating Budget”). The Each Annual Operating Budget shall also include specify in reasonable detail all projected Revenues, Operating Expenses, Major Maintenance Expenses and Capital Expenditures and any projected advances under the Toll Equity Loan Commitment for such period on a business plan monthly basis. The Annual Operating Budget shall specify (“Business Plan”A) for Borrower’s the projected Operating Expenses, Major Maintenance Expenses and its Subsidiaries’ proposed operations during Capital Expenditures relating to the forthcoming calendar year which shall include a projection operation, maintenance and improvement of income and expenses the Project as compared to the Project Budget for the coming year(“Projections”)Fiscal Year, (B) the projected Operating Expenses, Major Maintenance Expenses and Capital Expenditures relating to the operation, maintenance and improvement of the Project in excess of the Project Budget but to be incurred while performing at the Project Agreement Standards, and (C) the projected Operating Expenses, Major Maintenance Expenses and Capital Expenditures relating to the operation, maintenance and improvement of the Project in excess of the Project Budget and to be incurred while performing in excess of the Project Agreement Standards and the sources of payment for such costs. The Annual Operating Budget shall be prepared and submitted in accompanied by a form reasonably acceptable to Lender. The certificate of the Chief Financial Officer of the Borrower certifying that the Annual Operating Budget for each Property through December 31, 2006 is attached hereto as Exhibit G. Lender shall have the right at any time following the occurrence and during the continuance of an Event of Default to approve each Operating Budget in Lender’s reasonable discretion. In the event that Lender objects to the proposed Operating Budget submitted by Borrower, Lender shall advise Borrower of such objections within fifteen (15) Business Days after receipt thereof (and deliver to Borrower a reasonably detailed description of such objection) and Borrower shall promptly revise such Operating Budget and resubmit the same to Lender. Lender shall advise Borrower of any objections to such revised Operating Budget within ten (10) Business Days after receipt thereof (and deliver to Borrower a reasonably detailed description of such objection) and Borrower shall promptly revise the same has been prepared in accordance with the process requirements of this Agreement and the Project Agreement, including, without limitation, the requirement that no Revenues or other amounts on deposit in the Trust Agreement Funds are projected to be used to pay for Operating Expenses, Major Maintenance Expenses or Capital Expenses relating to the operation, maintenance, or improvement of the Project according to standards higher than the Project Agreement Standards. The Borrower agrees to submit to TxDOT for its review any amendments, supplements or modifications to the Annual Operating Budget accompanied by the same certification of the Chief Financial Officer of Borrower relating to the matters described in this sentence until Lender approves an Operating Budget. Each such Operating Budget approved by Lender in accordance with terms hereof shall hereinafter be referred to as an “Approved Operating Budgetamendment, supplement or modification.”