Common use of Annual Operating Projection Clause in Contracts

Annual Operating Projection. A. On or before the first day of December of each Fiscal Year, a preliminary draft of the budget (“Preliminary Annual Operating Projection”), setting forth Management Company's reasonable estimate, based on assumptions believed by Management Company to be reasonable at the time of preparation of the Preliminary Annual Operating Projection, of Gross Revenues, Operating Expenses, and Operating Profit for the forthcoming Fiscal Year for the Hotel, shall be prepared by Management Company and submitted to TRS for its review and approval (which shall not be unreasonably withheld, conditioned, or delayed). If TRS does not approve the Preliminary Annual Operating Projection in full, within thirty (30) days of its receipt, TRS shall notify Management Company of each category of expenses (a “Category”) of which TRS does not approve and include a reasonably detailed explanation of any such objection. The Preliminary Annual Operating Projection thereafter shall be revised as TRS and Management Company may agree, and shall, upon TRS’s approval, constitute the approved Annual Operating Projection (“Approved Annual Operating Projection”) for the forthcoming Fiscal Year. In the event that TRS does not notify Management Company in writing within said 30-day review period that it does not approve of specified Categories, the Preliminary Annual Operating Projection shall constitute the Approved Annual Operating Projection for the forthcoming Fiscal Year. The approval of TRS shall not be required with respect to any Category if, and to the extent that, the Preliminary Annual Operating Projection with respect to such Category for a given Fiscal Year is, in all material respects, the same as the Approved Annual Operating Projection for the preceding Fiscal Year with adjustments for inflation. B. If TRS and Management Company fail to mutually agree on any given Category or Categories in the Preliminary Annual Operating Projection within forty-five (45) days after the submission to TRS of the preliminary draft described in the first sentence of 9.03 A, Management Company shall continue to manage and operate the Hotel as follows until such agreement is reached: (i) with respect to each Category in such Preliminary Annual Operating Projection which has been approved or deemed approved by TRS, Management Company may make expenditures and incur obligations under such Category as so approved; and (ii) with respect to any Category which has not been approved by TRS, Management Company may continue to make expenditures and incur obligations under such Category in accordance with the amounts provided for such Category in the Approved Annual Operating Projection for the prior Fiscal Year, with adjustments for inflation and with such additional adjustments therein as shall be necessary to take into account: (x) any differences in occupancy which may be experienced in the current Fiscal Year as compared to the prior Fiscal Year; and (y) any increased costs beyond the control of Management Company for the same or comparable services or products. C. Management Company shall, from time to time during each Fiscal Year as it deems appropriate, suggest revisions to the Approved Annual Operating Projection for TRS's review and approval; each party will at all times give good faith consideration to the other party’s suggestions regarding revisions to the Approved Annual Operating Projection. Management Company will use commercially reasonable and diligent efforts to achieve the goals reflected in the Approved Annual Operating Projection; however, the same cannot be relied upon as a guarantee, representation, warranty, or assurance of actual results that may be experienced during and for such Fiscal Year. Management Company shall not, except as provided in Sections 8.03 A, 9.03 B and 9.03 D, depart from the Approved Annual Operating Projection, or make any expenditures or incur any expenses not provided for therein, without TRS's prior approval. D. TRS and Management Company acknowledge that the Approved Annual Operating Projection is an estimate only and that unforeseen circumstances such as, but not limited to, the costs of labor, materials, services and supplies, casualty, operation of law, or economic and market conditions may make adherence to the Approved Annual Operating Projection impracticable for certain Categories. The Category under which any expenditure or obligation falls shall be determined in accordance with the Uniform System of Accounts.

Annual Operating Projection. A. On or before Manager shall deliver to Owner for its review, at least thirty (30) days prior to the first day of December beginning of each Fiscal YearYear after the first Fiscal Year following the Effective Date, a preliminary draft of the budget business plan (“Preliminary Annual Operating Projection”), setting forth Management Company's reasonable estimate, based on assumptions believed by Management Company to be reasonable at the time of preparation including a proposed budget) and a projection of the Preliminary Annual Operating Projection, of estimated Gross Revenues, Operating Expensesdepartmental profits, Deductions, and Operating Profit for the forthcoming Fiscal Year for the Hotel, shall be prepared by Management Company and submitted to TRS for its review and approval Hotel (which shall not be unreasonably withheld, conditioned, or delayed). If TRS does not approve the Preliminary Annual Operating Projection in full, within thirty (30) days of its receipt, TRS shall notify Management Company of each category of expenses (a “Category”) of which TRS does not approve and include a reasonably detailed explanation of any such objection. The Preliminary Annual Operating Projection thereafter shall be revised as TRS and Management Company may agree, and shall, upon TRS’s approval, constitute the approved Annual Operating Projection (“Approved Annual Operating Projection”) for approval by Owner. Manager will consider in good faith suggestions made by Owner with respect to the forthcoming Fiscal YearAnnual Operating Projection and make modifications thereto that are agreed upon by Owner and Manager. In the event that TRS does not notify Management Company in writing within said 30-day review period that it does not approve case of specified Categoriesthe Fiscal Year beginning on the Effective Date, Manager and Owner have already agreed upon the Preliminary Annual Operating Projection shall constitute the Approved Annual Operating Projection for the forthcoming Fiscal Year. The approval of TRS shall not be required with respect to any Category if, and to the extent that, the Preliminary Annual Operating Projection with respect to such Category for a given Fiscal Year is, in all material respects, the same as the Approved Annual Operating Projection for the preceding Fiscal Year with adjustments for inflation. B. If TRS and Management Company fail to mutually agree on any given Category or Categories in the Preliminary Annual Operating Projection within forty-five (45) days after the submission to TRS of the preliminary draft described in the first sentence of 9.03 A, Management Company shall continue to manage and operate the Hotel as follows until such agreement is reached: (i) with respect to each Category in such Preliminary Annual Operating Projection which has been approved or deemed approved by TRS, Management Company may make expenditures and incur obligations under such Category as so approved; and (ii) with respect to any Category which has not been approved by TRS, Management Company may continue to make expenditures and incur obligations under such Category in accordance with the amounts provided for such Category in the Approved Annual Operating Projection for the prior Fiscal Year, with adjustments for inflation and with such additional adjustments therein as shall be necessary to take into account: (x) any differences in occupancy which may be experienced in the current Fiscal Year as compared to the prior Fiscal Year; and (y) any increased costs beyond the control of Management Company for the same or comparable services or products. C. Management Company shall, from time to time during each Fiscal Year as it deems appropriate, suggest revisions to the Approved Annual Operating Projection for TRS's review and approval; each party will at all times give good faith consideration to the other party’s suggestions regarding revisions to the Approved Annual Operating Projection. Management Company will use commercially reasonable and diligent efforts to achieve the goals reflected in the Approved Annual Operating Projection; however, the same cannot be relied upon as a guarantee, representation, warranty, or assurance of actual results that may be experienced during and for such Fiscal Year. Management Company Notwithstanding the foregoing, Owner shall notnot be entitled to withhold its approval of the Annual Operating Projection based solely on its objection to: (i) Manager’s reasonable projections of either Gross Revenues or the components thereof, except as provided (ii) Impositions, utility charges and similar charges determined by governmental authorities or providers whose rates cannot be controlled or negotiated by Manager, or (iii) increases in Sections 8.03 Aprojected costs and expenses of operating the Hotel caused by projected increases in occupancy or use of Hotel facilities that are projected to increase Gross Revenues. Upon approval of the Annual Operating Projection by Owner and Manager, 9.03 B and 9.03 D, depart from the Approved Manager in good faith shall use best efforts to adhere to such Annual Operating Projection. In the event Owner and Manager (each acting reasonably and in good faith in considering projections for operation of the Hotel pursuant to Prudent Industry Practice, or make the Franchise Agreement, any expenditures or incur any expenses not provided for therein, without TRS's prior approval. D. TRS Qualified Mortgage affecting the Hotel and Management Company acknowledge that this Agreement) are unable to agree upon the Approved Annual Operating Projection is an estimate only and that unforeseen circumstances such asby the commencement of the Fiscal Year to which it relates, but not limited to, the costs of labor, materials, services and supplies, casualty, operation of law, Owner or economic and market conditions Manager may make adherence elect to terminate this Agreement by serving written notice to the Approved other party, and this Agreement shall terminate as of the end of the second (2nd) full Accounting Period following the date on which such party receives such notice of termination. Any such notice of termination shall be given not later than thirty (30) days after the end of the then-current Fiscal Year, provided that Owner shall have received the proposed Annual Operating Projection impracticable for certain Categoriesfrom Manager at least thirty (30) days prior to the end of the then-current Fiscal Year. The Category under which any expenditure or obligation falls Pending such termination, Manager shall be determined operate the Hotel with respect to those categories that are in accordance with dispute based on the Uniform System of Accountsprevious Fiscal Year’s approved Annual Operating Projection.

Annual Operating Projection. A. On or before At least thirty (30) Days prior to the first day of December beginning of each Fiscal Year, Tenant shall submit to Landlord a preliminary draft of projection (the budget (“Preliminary "Draft Annual Operating Projection”), setting forth Management Company's reasonable estimate, based on assumptions believed by Management Company to be reasonable at the time of preparation ") of the Preliminary estimated financial results of the operation of the Retirement Community during the next Fiscal Year. Such Draft Annual Operating Projection, of Gross Projection shall be a narrative report including the estimated Total Facility Revenues, Operating Expenses, Property Expenses and Operating Profit Profits for the forthcoming Fiscal Year for the HotelFacility in comparison to the forecasted gross revenues, shall be prepared by Management Company operating expenses and submitted operating profit for the current Fiscal Year, taking into account the Retirement Community's market area. Such comparison will, each in a reasonably itemized and detailed as well as summary form, include the estimated percentage changes in such items for the forthcoming Fiscal Year compared to TRS for its review and approval (which shall not be unreasonably withheldthe current Fiscal Year. In addition, conditioned, or delayed). If TRS does not approve the Preliminary Draft Annual Operating Projection will include, in fullspreadsheet format, within thirty (30) days the forecasted gross revenues, operating expenses and operating profit for each Accounting Period of its receipt, TRS shall notify Management Company of each category of expenses (a “Category”) of which TRS does not approve and include a reasonably detailed explanation of any such objection. The Preliminary Annual Operating Projection thereafter shall be revised as TRS and Management Company may agree, and shall, upon TRS’s approval, constitute the approved Annual Operating Projection (“Approved Annual Operating Projection”) for the forthcoming Fiscal Year. Landlord shall have fifteen (15) Days after receipt of the Draft Annual Operating Projection to review and approve such Projection. If Landlord fails to provide any objection within such fifteen (15) Day period, the annual operating projection as submitted by Tenant shall be deemed approved and shall be herein referred as the "Annual Operating Projection." If Landlord disapproves any category in the Draft Annual Operating Projection, Landlord shall provide Tenant, in writing, with the specific reasons for its disapproval, by category, within such fifteen (15) Day period. The parties will attempt to resolve in good faith any objections by Landlord within twenty (20) Days following Tenant's receipt of Landlord's disapproval. Notwithstanding the foregoing, Landlord shall not be entitled to withhold its approval based on its objection to: (i) Tenant's reasonable projections of either gross revenues or the components thereof; (ii) projected costs and expenses that are "system charges" (that is, costs and expenses that are generally uniform throughout Tenant's chain of retirement communities, such as chain-wide marketing programs, employee wages, benefits and other compensation programs); (iii) costs and expenses that are not within the control of Landlord and Tenant, such as Impositions and the costs of utilities; and (iv) increases in projected costs and expenses of operating the Retirement Community, which increases are primarily caused by projected increases in gross revenues. In the event that TRS does not notify Management Company in writing within said 30-day review period that it does not approve the parties are unable to resolve all or some of specified CategoriesLandlord's objections, such disputed objections shall be resolved by the Preliminary Expert and the Draft Annual Operating Projection as so resolved shall constitute be herein referred as the Approved "Annual Operating Projection." Pending such Expert determination, Tenant shall operate the Retirement Community with respect to those categories that are in dispute based on the previous Fiscal Year's approved Annual Operating Projection, adjusted in accordance with changes in the GDP Deflator for the previous Fiscal Year and anticipated changes in gross revenues. In preparing the Annual Operating Projection for the forthcoming Fiscal Year. The approval of TRS shall not be required with respect to any Category if, and to the extent that, the Preliminary Annual Operating Projection with respect to such Category for a given Fiscal Year is, in all material respects, the same as the Approved Annual Operating Projection for the preceding Fiscal Year with adjustments for inflation. B. If TRS and Management Company fail to mutually agree on any given Category or Categories in the Preliminary Annual Operating Projection within forty-five (45) days after the submission to TRS of the preliminary draft described in the first sentence of 9.03 A, Management Company shall continue to manage and operate the Hotel as follows until such agreement is reached: (i) with respect to each Category in such Preliminary Annual Operating Projection which has been approved or deemed approved by TRS, Management Company may make expenditures and incur obligations under such Category as so approved; and (ii) with respect to any Category which has not been approved by TRS, Management Company may continue to make expenditures and incur obligations under such Category in accordance with the amounts provided for such Category in the Approved Annual Operating Projection for the prior Fiscal Year, Tenant's goal will be the maximization of the long-term operating profit of the Retirement Community, in keeping with adjustments Legal Requirements, and the general standards of the retirement industry for inflation and with such additional adjustments therein as similar properties. Tenant shall be necessary use its best efforts to take into account: (x) any differences in occupancy which may be experienced in the current Fiscal Year as compared adhere to the prior Fiscal Year; and (y) any increased costs beyond the control of Management Company for the same or comparable services or products. C. Management Company shall, from time to time during each Fiscal Year as it deems appropriate, suggest revisions to the Approved Annual Operating Projection for TRS's review and approval; each party will at all times give good faith consideration to the other party’s suggestions regarding revisions to the Approved Annual Operating Projection. Management Company will use commercially reasonable and diligent efforts to achieve the goals reflected in the Approved Annual Operating Projection; It is understood, however, the same cannot be relied upon as a guarantee, representation, warranty, or assurance of actual results that may be experienced during and for such Fiscal Year. Management Company shall not, except as provided in Sections 8.03 A, 9.03 B and 9.03 D, depart from the Approved Annual Operating Projection, or make any expenditures or incur any expenses not provided for therein, without TRS's prior approval. D. TRS and Management Company acknowledge that the Approved Annual Operating Projection is an estimate only a projection by Tenant of estimated results and that unforeseen various circumstances such as, but not limited to, the costs of labor, materialsmaterial, services and supplies, casualty, operation of law, or economic and market conditions may make adherence to achievement of the Approved Annual Operating Projection impracticable for certain Categoriesor not obtainable. The Category under which Subject to any expenditure Facility Mortgagee (other than Marriott International or obligation falls shall be determined in accordance its Affiliates) entering into such confidentiality agreement with Tenant, as Tenant may reasonably require, Landlord may at any time, and from time to time, provide any Facility Mortgagee with copies of any of the Uniform System of Accountsforegoing statements.

Annual Operating Projection. A. On or before Forty-five (45) Days prior to the first day of December beginning of each Fiscal Year, Operator shall submit to Owner a preliminary draft of projection (the budget (“Preliminary "Annual Operating Projection”), setting forth Management Company's reasonable estimate, based on assumptions believed by Management Company to be reasonable at the time of preparation ") of the Preliminary Annual Operating Projection, estimated financial results of the operation of the Retirement Community during the next Fiscal Year. Such projection shall project the estimated Gross Revenues, Operating Expenses, and Operating Profit for the forthcoming Fiscal Year for the HotelRetirement Community, shall be prepared by Management Company and submitted to TRS for its review and approval (which shall not be unreasonably withheld, conditioned, or delayed). If TRS does not approve taking into account the Preliminary Annual Operating Projection in full, within thirty (30) days of its receipt, TRS shall notify Management Company of each category of expenses (a “Category”) of which TRS does not approve and include a reasonably detailed explanation of any such objection. The Preliminary Annual Operating Projection thereafter shall be revised as TRS and Management Company may agree, and shall, upon TRS’s approval, constitute the approved Annual Operating Projection (“Approved Annual Operating Projection”) for the forthcoming Fiscal YearRetirement Community's market area. In preparing the event that TRS does not notify Management Company in writing within said 30-day review period that it does not approve of specified Categories, the Preliminary Annual Operating Projection shall constitute the Approved Annual Operating Projection for the forthcoming each Fiscal Year. The approval , Operator's goal will be the maximization of TRS shall not be required the long-term Operating Profit of the Retirement Community, in keeping with respect to any Category ifthe Marriott Standards, Legal Requirements, and to the extent that, general standards of the Preliminary retirement industry for similar quality-tier properties. If there are material items in any given Annual Operating Projection with respect to such Category which have been budgeted at significantly different amounts from the amounts actually experienced (or projected) for a given Fiscal Year is, in all material respects, the same as the Approved Annual Operating Projection for items in the preceding Fiscal Year with adjustments Year, Operator agrees to take reasonable steps to ensure that, at Owner's request, qualified personnel from Operator's staff are available to explain these differences to Owner. A meeting (or meetings) for inflation. B. If TRS and Management Company fail to mutually agree on any given Category or Categories in the Preliminary Annual Operating Projection such purpose shall be held, at Owner's request, within forty-five (45) days a reasonable period of time after the submission to TRS Owner of the preliminary draft described in of the first sentence of 9.03 A, Management Company Annual Operating Projection. Operator shall continue to manage and operate the Hotel as follows until such agreement is reached: (i) consult with Owner with respect to each Category in such Preliminary the Annual Operating Projection which has been approved or deemed approved by TRS, Management Company may make expenditures and incur obligations under such Category as so approved; and (ii) with respect to any Category which has not been approved by TRS, Management Company may continue to make expenditures and incur obligations under such Category in accordance with the amounts provided for such Category in the Approved Annual Operating Projection for the prior Fiscal Year, with adjustments for inflation and with such additional adjustments therein as shall be necessary to take into account: (x) any differences in occupancy which may be experienced in the current Fiscal Year as compared to the prior Fiscal Year; and (y) any increased costs beyond the control of Management Company for the same or comparable services or products. C. Management Company shall, from time to time during each Fiscal Year as it deems appropriate, suggest revisions to the Approved Annual Operating Projection for TRS's review and approval; each party will at all times give good faith consideration to Owner's suggestion regarding the other party’s suggestions regarding revisions same, but shall not be required to obtain Owner's approval thereof, except that Owner shall have the right to approve the Annual Operating Projection, which approval shall not be unreasonably delayed or denied, in the event that Owner's Priority was not paid for the prior Fiscal Year or is not forecasted to be reached in the current Fiscal Year or is not forecasted to be reached in the Annual Operating Projection for the following Fiscal Year that has been submitted to Owner. B. If Owner's approval of the Annual Operating Projection is required pursuant to Section 9.03A and if Owner fails to approve the Annual Operating Projection prepared by Operator pursuant to Section 9.03A prior to the Approved first Day of the Fiscal Year in question, Operator shall commence the operations of the Retirement Community for said Fiscal Year, and continue such operations until Owner's approval is obtained, under a provisional Annual Operating Projection which shall consist of the actual financial results of the immediately preceding Fiscal Year, with projected Operating Expenses adjusted by the CPI, and with further reasonable adjustments as necessary to comply with any Legal Requirements or respond to known cost increases or any extraordinary circumstances that Operator has good reason to anticipate in the subject Fiscal Year. C. Operator shall use its best efforts to adhere to the Annual Operating Projection. Management Company will use commercially reasonable and diligent efforts to achieve the goals reflected in the Approved Annual Operating Projection; It is understood, however, the same cannot be relied upon as a guarantee, representation, warranty, or assurance of actual results that may be experienced during and for such Fiscal Year. Management Company shall not, except as provided in Sections 8.03 A, 9.03 B and 9.03 D, depart from the Approved Annual Operating Projection, or make any expenditures or incur any expenses not provided for therein, without TRS's prior approval. D. TRS and Management Company acknowledge that the Approved Annual Operating Projection is an estimate only a projection by Operator of estimated results and that unforeseen various circumstances such as, but not limited to, the costs of labor, materialsmaterial, services and supplies, casualty, operation of law, or economic and market conditions may make adherence to achievement of the Approved Annual Operating Projection impracticable for certain Categoriesor not obtainable. The Category under which any expenditure or obligation falls Accordingly, Operator shall be determined under no obligation to achieve any of the results shown in accordance the Annual Operating Projection, and Operator shall be entitled to depart therefrom due to such circumstances, provided that nothing herein shall be deemed to authorize Operator to take any action prohibited by this Agreement to reduce Operator's other obligations hereunder. ------------------------------------------------------------------------------- FORM OF OPERATING AGREEMENT [DATE], PAGE 39 D. Operator shall notify Owner of any significant variations from the Annual Operating Projection promptly after Operator learns of the same, but in not event later than the date on which Operator is required to give Owner the Interim Report covering the period in which such variation occurs. Any such notice shall set forth in reasonable detail the nature, extent and, if known by Operator, the cause of such variation, and recommendations of appropriate actions, either to correct the variation or to prevent or minimize its occurrence or effect. Owner and Operator shall, at Owner's request, meet to review such variations and discuss appropriate action with the Uniform System of Accountsrespect thereto.

Annual Operating Projection. A. On or before the first day of December of each Fiscal Year, a preliminary draft of the budget (“Preliminary Annual Operating Projection”), setting forth Management Company's ’s reasonable estimate, based on assumptions believed by Management Company to be reasonable at the time of preparation of the Preliminary Annual Operating Projection, estimate of Gross Revenues, Operating ExpensesDeductions, and Operating Profit and such other information as Owner or a Qualified Lender may reasonably request for the Hotel for the forthcoming Fiscal Year for the HotelYear, shall be prepared by Management Company and submitted to TRS Owner for its review and approval (which shall not be unreasonably withheld, conditioned, withheld or delayed). In the event that Management Company is seeking reimbursement from Owner pursuant to Section 14.01.B(i) for the salaries, wages and/or benefits of any officers or directors of Management Company or Management Company’s Affiliates who shall be regularly or temporarily employed or assigned on a full-time basis at the Hotel, this shall be shown as a separate line item under the Deductions category of the Annual Operating Projection. On or before the fifteenth (15th) day of December of each Fiscal Year, Management Company and Owner shall have a meeting to discuss the Annual Operating Projection; provided that Management Company shall submit the Annual Operating Projection to Owner at least fourteen (14) days in advance of such meeting (or such meeting shall be rescheduled to a date that is at least fourteen (14) days after the submission of the Annual Operating Projection to Owner). If TRS Owner does not approve the Preliminary preliminary Annual Operating Projection in full, within thirty (30) days of its receipt, TRS Owner shall notify Management Company of each category of expenses (a “Category”) of which TRS Owner does not approve and include a reasonably detailed explanation of any such objectionapprove. The Preliminary preliminary Annual Operating Projection thereafter shall be revised as TRS Owner and Management Company may agree, and shall, upon TRSOwner’s approval, constitute the approved Annual Operating Projection (“Approved Annual Operating Projection”) for the forthcoming Fiscal Year. In the event that TRS Owner does not notify Management Company in writing within said 30-day review period that it does not approve of specified Categories, the Preliminary preliminary Annual Operating Projection shall constitute the Approved approved Annual Operating Projection for the forthcoming Fiscal Year. The approval of TRS Owner shall not be required with respect to any Category if, and to the extent that, the Preliminary preliminary Annual Operating Projection with respect to such Category for a given Fiscal Year is, in all material respectsrespects (taking into account any extraordinary non-recurring items), the same as the Approved Annual Operating Projection for the preceding Fiscal Year with adjustments for inflationas adjusted by the Consumer Price Index. B. The Annual Operating Projection is an estimate only and Management Company shall, from time to time during each Fiscal Year as it deems appropriate, suggest revisions thereto for Owner’s review and approval. Management Company will at all times give good faith consideration to Owner’s suggestions regarding any Annual Operating Projection. Management Company shall not, except as provided in Sections 8.03 A above and 9.03 C and 9.03 D below, depart from any approved Annual Operating Projection, or make any expenditures or incur any expenses not provided for therein, without Owner’s prior approval. C. If TRS Owner and Management Company fail to mutually agree on any given Category or Categories in the Preliminary preliminary Annual Operating Projection within forty-five (45) days after the submission to TRS Owner of the preliminary draft described in the first sentence of 9.03 A, Management Company shall continue to manage and operate the Hotel as follows until such agreement is reached: (i) with respect to each Category in such Preliminary preliminary Annual Operating Projection which has been approved or deemed approved by TRSOwner, Management Company may make expenditures and incur obligations under such Category as so approved; and (ii) with respect to any Category which has not been approved by TRSOwner, Management Company may continue to make expenditures and incur obligations under such Category in accordance with the amounts provided for such Category in the Approved Annual Operating Projection approved for the prior Fiscal Year, with adjustments for inflation and as adjusted by the Consumer Price Index, with such additional adjustments therein as shall be necessary to take into account: account (x) any differences in occupancy which may be experienced in the current Fiscal Year as compared to the prior Fiscal Year; Year with respect to those costs that are occupancy sensitive, and (y) any increased costs beyond the control of Management Company for the same or comparable services or products. C. Management Company shall, from time to time during each Fiscal Year as it deems appropriate, suggest revisions to the Approved Annual Operating Projection for TRS's review and approval; each party will at all times give good faith consideration to the other party’s suggestions regarding revisions to the Approved Annual Operating Projection. Management Company will use commercially reasonable and diligent efforts to achieve the goals reflected in the Approved Annual Operating Projection; however, the same cannot be relied upon as a guarantee, representation, warranty, or assurance of actual results that may be experienced during and for such Fiscal Year. Management Company shall not, except as provided in Sections 8.03 A, 9.03 B and 9.03 D, depart from the Approved Annual Operating Projection, or make any expenditures or incur any expenses not provided for therein, without TRS's prior approval. D. TRS Owner and Management Company acknowledge that the Approved Annual Operating Projection approved by Owner is an estimate only and that unforeseen circumstances such as, but not limited to, the costs of labor, materials, services and supplies, casualty, operation of law, or economic and market conditions may make adherence to the Approved Annual Operating Projection impracticable for certain Categories. The Category under which any expenditure or obligation falls shall be determined in accordance with the Uniform System of Accounts.Annual

Annual Operating Projection. A. On or before the first fifteenth day of December November of each Fiscal Year, excepting Fiscal Year 2000, a preliminary draft of the budget (“Preliminary "Annual Operating Projection”"), setting forth Management Company's reasonable estimate, based on assumptions believed by Management Company to be reasonable at the time of preparation of the Preliminary Annual Operating Projection, estimate of Gross Revenues, Operating ExpensesDeductions, and Operating Profit and Building Estimate for the forthcoming Fiscal Year for the Hotel, shall be prepared by Management Company and submitted to TRS Owner for its review and approval (which shall not be unreasonably withheld, conditioned, withheld or delayed). If TRS Owner does not approve the Preliminary preliminary Annual Operating Projection in full, within thirty forty- five (3045) days of its receipt, TRS Owner shall notify Management Company of each category of expenses (a “"Category”") of which TRS Owner does not approve and include a reasonably detailed explanation of any such objectionapprove. The Preliminary preliminary Annual Operating Projection thereafter shall be revised as TRS Owner and Management Company may agree, and shall, upon TRS’s Owner's approval, constitute the approved Annual Operating Projection (“Approved Annual Operating Projection”) for the forthcoming Fiscal Year. In the event that TRS Owner does not notify Management Company in writing within with said 3045-day review period that it does not approve of specified Categories, the Preliminary preliminary Annual Operating Projection shall constitute the Approved Annual Operating Projection for the forthcoming Fiscal Year. The approval of TRS Owner shall not be required with respect to any Category if, and to the extent that, the Preliminary preliminary Annual Operating Projection with respect to such Category for a given Fiscal Year is, in all material respects, the same as the Approved Annual Operating Projection for the preceding Fiscal Year with adjustments for inflation, except if such Category is no longer required, or if expenses incurred in such Category were not reasonable, in Owner's and Management Company's reasonable discretion. B. The Annual Operating Projection is an estimate only and Management Company shall, from time to time during each Fiscal Year as it deems appropriate, suggest revisions thereto for Owner's review and approval. Management Company will at all times give good faith consideration to Owner's suggestions regarding any Annual Operating Projection. Management Company shall not, except as provided in Sections 8.03 A above and 9.03 C and 9.03 D below, depart from any approved Annual Operating Projection, or make any expenditures or incur any expenses not provided for therein, without Owner's prior approval. C. If TRS Owner and Management Company fail to mutually agree on any given Category or Categories in the Preliminary preliminary Annual Operating Projection within forty-forty- five (45) days after the submission to TRS Owner of the preliminary draft described in the first sentence of 9.03 A, Management Company shall continue to manage and operate the Hotel as follows until such agreement is reached: (i) with respect to each Category in such Preliminary preliminary Annual Operating Projection which has been approved or deemed approved by TRSOwner, Management Company may make expenditures and incur obligations under such Category as so approved; and (ii) with respect to any Category which has not been approved by TRSOwner, Management Company may continue to make expenditures and incur obligations under such Category in accordance with the amounts provided for such Category in the Approved Annual Operating Projection approved for the prior Fiscal Year, with adjustments for inflation and with such additional adjustments therein as shall be necessary to take into account: account (x) any differences in occupancy which may be experienced in the current Fiscal Year as compared to the prior Fiscal Year; Year and (y) any increased costs beyond the control of Management Company for the same or comparable services or products. C. Management Company shall, from time to time during each Fiscal Year as it deems appropriate, suggest revisions to the Approved Annual Operating Projection for TRS's review and approval; each party will at all times give good faith consideration to the other party’s suggestions regarding revisions to the Approved Annual Operating Projection. Management Company will use commercially reasonable and diligent efforts to achieve the goals reflected in the Approved Annual Operating Projection; however, the same cannot be relied upon as a guarantee, representation, warranty, or assurance of actual results that may be experienced during and for such Fiscal Year. Management Company shall not, except as provided in Sections 8.03 A, 9.03 B and 9.03 D, depart from the Approved Annual Operating Projection, or make any expenditures or incur any expenses not provided for therein, without TRS's prior approval. D. TRS Owner and Management Company acknowledge that the Approved Annual Operating Projection approved by Owner is an estimate only and that unforeseen circumstances such as, but not limited to, the costs of labor, materials, services and supplies, casualty, operation of law, or economic and market conditions may make adherence to the Approved Annual Operating Projection impracticable for certain Categories. The If in the judgment of the Management Company the expenditures reasonably expected to be made in any of the following Categories during the then current Fiscal Year exceed by ten percent (10%) or more the amount budgeted for such Category under which any expenditure or obligation falls in the then current Annual Operating Projection, Management Company shall be determined notify Owner promptly in accordance with the Uniform System of Accounts.writing: Rooms; Food, Beverage and Banquet; Telephone, Gift Shop, and other; Administrative and General; Advertising and Sales; Repairs and Maintenance;

Annual Operating Projection. A. On Manager shall furnish to Tenant for its review, on or before (i) thirty (30) days after the commencement of any Fiscal Year commencing after the Effective Date with respect to each Hotel, and (ii) in the case of the first day partial Fiscal Year of December operations of a Hotel, within thirty (30) days after the Effective Date with respect to such Hotel, a statement of the estimated financial results of the operation of each such Hotel during the then current Fiscal Year, a preliminary draft of the budget Year (“Preliminary "Annual Operating Projection”"), setting forth Management Company's reasonable estimate, based on assumptions believed by Management Company to be reasonable at . Such projection shall project the time of preparation of the Preliminary Annual Operating Projection, of estimated Gross Revenues, Operating Expensesdepartmental profits, Deductions, and Operating Profit for the forthcoming Fiscal Year for the each such Hotel. Manager agrees to take reasonable steps to ensure that, at Tenant's request, qualified personnel from Manager's staff are available to explain such Annual Operating Projections to Tenant. A meeting (or meetings) for such purpose shall be prepared by Management Company and submitted to TRS for its review and approval (which shall not be unreasonably withheldheld, conditioned, or delayed). If TRS does not approve the Preliminary Annual Operating Projection in fullat Tenant's request, within thirty (30) days a reasonable period of its receipt, TRS shall notify Management Company of each category of expenses (a “Category”) of which TRS does not approve and include a reasonably detailed explanation of any such objection. The Preliminary Annual Operating Projection thereafter shall be revised as TRS and Management Company may agree, and shall, upon TRS’s approval, constitute the approved Annual Operating Projection (“Approved Annual Operating Projection”) for the forthcoming Fiscal Year. In the event that TRS does not notify Management Company in writing within said 30-day review period that it does not approve of specified Categories, the Preliminary Annual Operating Projection shall constitute the Approved Annual Operating Projection for the forthcoming Fiscal Year. The approval of TRS shall not be required with respect to any Category if, and to the extent that, the Preliminary Annual Operating Projection with respect to such Category for a given Fiscal Year is, in all material respects, the same as the Approved Annual Operating Projection for the preceding Fiscal Year with adjustments for inflation. B. If TRS and Management Company fail to mutually agree on any given Category or Categories in the Preliminary Annual Operating Projection within forty-five (45) days time after the submission to TRS Tenant of the preliminary draft described in the first sentence of 9.03 A, Management Company shall continue to manage and operate the Hotel as follows until such agreement is reached: (i) with respect to each Category in such Preliminary Annual Operating Projection which has been approved or deemed approved by TRS, Management Company may make expenditures and incur obligations under such Category as so approved; and (ii) with respect to any Category which has not been approved by TRS, Management Company may continue to make expenditures and incur obligations under such Category in accordance with the amounts provided for such Category in the Approved Annual Operating Projection for the prior Fiscal Year, with adjustments for inflation and with such additional adjustments therein as shall be necessary to take into account: (x) any differences in occupancy which may be experienced in the current Fiscal Year as compared to the prior Fiscal Year; and (y) any increased costs beyond the control of Management Company for the same or comparable services or products. C. Management Company shall, from time to time during each Fiscal Year as it deems appropriate, suggest revisions to the Approved Annual Operating Projection for TRS's review and approval; each party Projection. Manager will at all times give good faith consideration to the other party’s Tenant's suggestions regarding revisions to the Approved any Annual Operating Projection. Management Company will use commercially reasonable and diligent efforts Manager shall thereafter submit to achieve Tenant, by no later than seventy-five (75) days after the goals reflected in beginning of such Fiscal Year, a modified Annual Operating Projection if any changes are made following receipt of comments from Tenant. Manager shall endeavor to adhere to the Approved Annual Operating Projection; . It is understood, however, the same cannot be relied upon as a guarantee, representation, warranty, or assurance of actual results that may be experienced during and for such Fiscal Year. Management Company shall not, except as provided in Sections 8.03 A, 9.03 B and 9.03 D, depart from the Approved Annual Operating Projection, or make any expenditures or incur any expenses not provided for therein, without TRS's prior approval. D. TRS and Management Company acknowledge that the Approved Annual Operating Projection is an estimate only and that unforeseen circumstances such as, but not limited to, the costs of labor, materialsmaterial, services and supplies, casualty, operation of law, or economic and market conditions may make adherence to the Approved Annual Operating Projection impracticable for certain Categories. The Category under which any expenditure or obligation falls impracticable, and Manager shall be determined in accordance with entitled to depart therefrom due to causes of the Uniform System of Accountsforegoing nature; provided, however, that nothing herein shall be deemed to authorize Manager to take any action prohibited by this Agreement or to reduce Manager's other rights or obligations hereunder.

Annual Operating Projection. A. On or before the first day of December of each Fiscal Year, a preliminary draft of the budget (“Preliminary "Annual Operating Projection”"), setting forth Management Company's reasonable estimate, based on assumptions believed by Management Company to be reasonable at the time of preparation of the Preliminary Annual Operating Projection, estimate of Gross Revenues, Operating ExpensesDeductions, and Operating Profit and such other information as Owner or a Qualified Lender may reasonably request for the Hotel for the forthcoming Fiscal Year for the HotelYear, shall be prepared by Management Company and submitted to TRS Owner for its review and approval (which shall not be unreasonably withheld, conditioned, withheld or delayed). In the event that Management Company is seeking reimbursement from Owner pursuant to Section 14.01.B(i) for the salaries, wages and/or benefits of any officers or directors of Management Company or Management Company's Affiliates who shall be regularly or temporarily employed or assigned on a full-time basis at the Hotel, this shall be shown as a separate line item under the Deductions category of the Annual Operating Projection. On or before the fifteenth (15th) day of December of each Fiscal Year, Management Company and Owner shall have a meeting to discuss the Annual Operating Projection; provided that Management Company shall submit the Annual Operating Projection to Owner at least fourteen (14) days in advance of such meeting (or such meeting shall be rescheduled to a date that is at least fourteen (14) days after the submission of the Annual Operating Projection to Owner). If TRS Owner does not approve the Preliminary preliminary Annual Operating Projection in full, within thirty (30) days of its receipt, TRS Owner shall notify Management Company of each category of expenses (a “"Category”") of which TRS Owner does not approve and include a reasonably detailed explanation of any such objectionapprove. The Preliminary preliminary Annual Operating Projection thereafter shall be revised as TRS Owner and Management Company may agree, and shall, upon TRS’s Owner's approval, constitute the approved Annual Operating Projection (“Approved Annual Operating Projection”) for the forthcoming Fiscal Year. In the event that TRS Owner does not notify Management Company in writing within said 30-day review period that it does not approve of specified Categories, the Preliminary preliminary Annual Operating Projection shall constitute the Approved approved Annual Operating Projection for the forthcoming Fiscal Year. The approval of TRS Owner shall not be required with respect to any Category if, and to the extent that, the Preliminary preliminary Annual Operating Projection with respect to such Category for a given Fiscal Year is, in all material respectsrespects (taking into account any extraordinary non-recurring items), the same as the Approved Annual Operating Projection for the preceding Fiscal Year with adjustments for inflationas adjusted by the Consumer Price Index. B. The Annual Operating Projection is an estimate only and Management Company shall, from time to time during each Fiscal Year as it deems appropriate, suggest revisions thereto for Owner's review and approval. Management Company will at all times give good faith consideration to Owner's suggestions regarding any Annual Operating Projection. Management Company shall not, except as provided in Sections 8.03 A above and 9.03 C and 9.03 D below, depart from any approved Annual Operating Projection, or make any expenditures or incur any expenses not provided for therein, without Owner's prior approval. C. If TRS Owner and Management Company fail to mutually agree on any given Category or Categories in the Preliminary preliminary Annual Operating Projection within forty-five (45) days after the submission to TRS Owner of the preliminary draft described in the first sentence of 9.03 A, Management Company shall continue to manage and operate the Hotel as follows until such agreement is reached: (i) with respect to each Category in such Preliminary preliminary Annual Operating Projection which has been approved or deemed approved by TRSOwner, Management Company may make expenditures and incur obligations under such Category as so approved; and (ii) with respect to any Category which has not been approved by TRSOwner, Management Company may continue to make expenditures and incur obligations under such Category in accordance with the amounts provided for such Category in the Approved Annual Operating Projection approved for the prior Fiscal Year, with adjustments for inflation and as adjusted by the Consumer Price Index, with such additional adjustments therein as shall be necessary to take into account: account (x) any differences in occupancy which may be experienced in the current Fiscal Year as compared to the prior Fiscal Year; Year with respect to those costs that are occupancy sensitive, and (y) any increased costs beyond the control of Management Company for the same or comparable services or products. C. Management Company shall, from time to time during each Fiscal Year as it deems appropriate, suggest revisions to the Approved Annual Operating Projection for TRS's review and approval; each party will at all times give good faith consideration to the other party’s suggestions regarding revisions to the Approved Annual Operating Projection. Management Company will use commercially reasonable and diligent efforts to achieve the goals reflected in the Approved Annual Operating Projection; however, the same cannot be relied upon as a guarantee, representation, warranty, or assurance of actual results that may be experienced during and for such Fiscal Year. Management Company shall not, except as provided in Sections 8.03 A, 9.03 B and 9.03 D, depart from the Approved Annual Operating Projection, or make any expenditures or incur any expenses not provided for therein, without TRS's prior approval. D. TRS Owner and Management Company acknowledge that the Approved Annual Operating Projection approved by Owner is an estimate only and that unforeseen circumstances such as, but not limited to, the costs of labor, materials, services and supplies, casualty, operation of law, or economic and market conditions may make adherence to the Approved Annual Operating Projection impracticable for certain Categories. The Category under which If in the judgment of the Management Company the expenditures reasonably expected to be made in any expenditure or obligation falls shall be determined in accordance with of the Uniform System of Accounts.following Categories during the then current Fiscal Year exceed by five percent (5%) or

Annual Operating Projection. A. On or before Manager shall deliver to Owner for its review, at least thirty (30) days prior to the first day of December beginning of each Fiscal YearYear after the first Fiscal Year following the Effective Date, a preliminary draft of the budget business plan (“Preliminary Annual Operating Projection”), setting forth Management Company's reasonable estimate, based on assumptions believed by Management Company to be reasonable at the time of preparation including a proposed budget) and a projection of the Preliminary Annual Operating Projection, of estimated Gross Revenues, Operating Expensesdepartmental profits, and Deductions, Operating Profit and FF&E Leases for the forthcoming Fiscal Year for the Hotel, shall be prepared by Management Company and submitted to TRS for its review and approval Hotel (which shall not be unreasonably withheld, conditioned, or delayed). If TRS does not approve the Preliminary Annual Operating Projection in full, within thirty (30) days of its receipt, TRS shall notify Management Company of each category of expenses (a “Category”) of which TRS does not approve and include a reasonably detailed explanation of any such objection. The Preliminary Annual Operating Projection thereafter shall be revised as TRS and Management Company may agree, and shall, upon TRS’s approval, constitute the approved Annual Operating Projection (“Approved Annual Operating Projection”) for approval by Owner. Manager will consider in good faith suggestions made by Owner with respect to the forthcoming Annual Operating Projection and make modifications thereto that are agreed upon by Owner and Manager. In the case of the Fiscal Year beginning on the Effective Date, Manager and Owner have already agreed upon the Annual Operating Projection for such Fiscal Year. Upon approval of the Annual Operating Projection by Owner and Manager, Manager in good faith shall use commercially reasonable efforts to adhere to such Annual Operating Projection. In the event that TRS does not notify Management Company in writing within said 30-day review period that it does not approve of specified Categories, Owner and Manager are unable to agree upon the Preliminary Annual Operating Projection by the commencement of the Fiscal Year to which it relates, Manager shall constitute continue to manage the Approved Hotel pursuant to the previously approved Annual Operating Projection (including the amount of Working Capital) increased by the lesser of (i) three percent (3%) or (ii) the percentage increase in the CPI, until such time as Owner and Manager agree on an Annual Operating Projection for the forthcoming Fiscal Year. The approval of TRS shall not be required with respect If Owner objects to any Category if, and to the extent that, the Preliminary Annual Operating Projection with respect to such Category for a given Fiscal Year is, in all material respects, the same as the Approved Annual Operating Projection for the preceding Fiscal Year with adjustments for inflation. B. If TRS and Management Company fail to mutually agree on any given Category or Categories in the Preliminary Annual Operating Projection within forty-five (45) days after the submission to TRS portion of the preliminary draft described in the first sentence of 9.03 A, Management Company shall continue to manage and operate the Hotel as follows until such agreement is reached: (i) with respect to each Category in such Preliminary Annual Operating Projection which has been approved or deemed approved by TRS, Management Company may make expenditures and incur obligations under such Category as so approved; and (ii) with respect to any Category which has not been approved by TRS, Management Company may continue to make expenditures and incur obligations under such Category in accordance with the amounts provided for such Category in the Approved Annual Operating Projection for the prior Fiscal Year, with adjustments for inflation and with such additional adjustments therein as shall be necessary to take into account: (x) any differences in occupancy which may be experienced in the current Fiscal Year as compared to the prior Fiscal Year; and (y) any increased costs beyond the control of Management Company for the same or comparable services or products. C. Management Company shall, from time to time during each Fiscal Year as it deems appropriate, suggest revisions to the Approved Annual Operating Projection for TRS's review and approval; each party will at all times give good faith consideration to the other party’s suggestions regarding revisions to the Approved Annual Operating Projection. Management Company will use commercially reasonable and diligent efforts to achieve the goals reflected in the Approved Annual Operating Projection; however, the same cannot be relied upon as a guarantee, representation, warranty, or assurance of actual results that may be experienced during and for such Fiscal Year. Management Company shall not, except as provided in Sections 8.03 A, 9.03 B and 9.03 D, depart from the Approved Proposed Annual Operating Projection, or make any expenditures or incur any expenses not provided for therein, without TRS's prior approval. D. TRS and Management Company acknowledge that the Approved Annual Operating Projection is an estimate only and that unforeseen circumstances such as, but not limited to, the costs of labor, materials, services and supplies, casualty, operation of law, or economic and market conditions may make adherence to the Approved Annual Operating Projection impracticable for certain Categories. The Category under which any expenditure or obligation falls Owner shall be determined in accordance specific as to category and any category not specifically disapproved by Owner shall be deemed approved. Owner will provide Manager with the Uniform System of Accountsspecific reasons for its disapproval with Owner’s written objection, and the parties will attempt to resolve, in good faith, any objections within the thirty (30) day period following Owner’s objection.

Annual Operating Projection. A. On or before the first day of December of each Fiscal Year, a preliminary draft of the budget (“Preliminary Annual Operating Projection”), setting forth Management Company's ’s reasonable estimate, based on assumptions believed by Management Company to be reasonable at the time of preparation of the Preliminary Annual Operating Projection, estimate of Gross Revenues, Operating ExpensesDeductions, and Operating Profit and such other information as Owner or a lender may reasonably request for the Hotel for the forthcoming Fiscal Year for the HotelYear, shall be prepared by Management Company and submitted to TRS Owner for its review and approval (which shall not be unreasonably withheld, conditioned, withheld or delayed). In the event that Management Company is seeking reimbursement from Owner pursuant to Section 14.01 B(i) for the salaries, wages and/or benefits of any officers or directors of Management Company or Management Company’s Affiliates who shall be regularly or temporarily employed or assigned on a full-time basis at the Hotel, this shall be shown as a separate line item under the Deductions category of the Annual Operating Projection. On or before the fifteenth (15th) day of December of each Fiscal Year, Management Company and Owner shall have a meeting to discuss the Annual Operating Projection; provided that Management Company shall submit the Annual Operating Projection to Owner at least fourteen (14) days in advance of such meeting (or such meeting shall be rescheduled to a date that is at least fourteen (14) days after the submission of the Annual Operating Projection to Owner). If TRS Owner does not approve the Preliminary preliminary Annual Operating Projection in full, within thirty (30) days of its receipt, TRS Owner shall notify Management Company of each category of expenses (a “Category”) of which TRS Owner does not approve and include a reasonably detailed explanation of any such objectionapprove. The Preliminary preliminary Annual Operating Projection thereafter shall be revised as TRS Owner and Management Company may agree, and shall, upon TRSOwner’s approval, constitute the approved Annual Operating Projection (“Approved Annual Operating Projection”) for the forthcoming Fiscal Year. In the event that TRS Owner does not notify Management Company in writing within said 30-day review period that it does not approve of specified Categories, the Preliminary preliminary Annual Operating Projection shall constitute the Approved approved Annual Operating Projection for the forthcoming Fiscal Year. The approval of TRS Owner shall not be required with respect to any Category if, and to the extent that, the Preliminary preliminary Annual Operating Projection with respect to such Category for a given Fiscal Year is, in all material respectsrespects (taking into account any extraordinary non-recurring items), the same as the Approved Annual Operating Projection for the preceding Fiscal Year with adjustments for inflationas adjusted by the Consumer Price Index. B. The Annual Operating Projection is an estimate only and Management Company shall, from time to time during each Fiscal Year as it deems appropriate, suggest revisions thereto for Owner’s review and approval. Management Company will at all times give good faith consideration to Owner’s suggestions regarding any Annual Operating Projection. Management Company shall not, except as provided in Sections 8.03 A above and 9.03 C and 9.03 D below, depart from any approved Annual Operating Projection, or make any expenditures or incur any expenses not provided for therein, without Owner’s prior approval. C. If TRS Owner and Management Company fail to mutually agree on any given Category or Categories in the Preliminary preliminary Annual Operating Projection within forty-five (45) days after the submission to TRS Owner of the preliminary draft described in the first sentence of 9.03 A, Management Company shall continue to manage and operate the Hotel as follows until such agreement is reached: (i) with respect to each Category in such Preliminary preliminary Annual Operating Projection which has been approved or deemed approved by TRSOwner, Management Company may make expenditures and incur obligations under such Category as so approved; and (ii) with respect to any Category which has not been approved by TRSOwner, Management Company may continue to make expenditures and incur obligations under such Category in accordance with the amounts provided for such Category in the Approved Annual Operating Projection approved for the prior Fiscal Year, with adjustments for inflation and as adjusted by the Consumer Price Index, with such additional adjustments therein as shall be necessary to take into account: account (x) any differences in occupancy which may be experienced in the current Fiscal Year as compared to the prior Fiscal Year; Year with respect to those costs that are occupancy sensitive, and (y) any increased costs beyond the control of Management Company for the same or comparable services or products. C. Management Company shall, from time to time during each Fiscal Year as it deems appropriate, suggest revisions to the Approved Annual Operating Projection for TRS's review and approval; each party will at all times give good faith consideration to the other party’s suggestions regarding revisions to the Approved Annual Operating Projection. Management Company will use commercially reasonable and diligent efforts to achieve the goals reflected in the Approved Annual Operating Projection; however, the same cannot be relied upon as a guarantee, representation, warranty, or assurance of actual results that may be experienced during and for such Fiscal Year. Management Company shall not, except as provided in Sections 8.03 A, 9.03 B and 9.03 D, depart from the Approved Annual Operating Projection, or make any expenditures or incur any expenses not provided for therein, without TRS's prior approval. D. TRS Owner and Management Company acknowledge that the Approved Annual Operating Projection approved by Owner is an estimate only and that unforeseen circumstances such as, but not limited to, the costs of labor, materials, services and supplies, casualty, operation of law, or economic and market conditions may make adherence to the Approved Annual Operating Projection impracticable for certain Categories. If in the judgment of the Management Company the expenditures reasonably expected to be made in any of the following Categories during the then current Fiscal Year exceed by five percent (5%) or more the amount budgeted for such Category in the then current Annual Operating Projection, Management Company shall notify Owner promptly in writing: Rooms; Food, Beverage and Banquet; Telephone, Gift Shop, and other; Administrative and General; Advertising and Sales; Repairs and Maintenance; Salaries and Wages. Management Company shall, as soon as practicable thereafter, consult with, and advise, Owner concerning expenditures for such Category or Categories. The Category under which any expenditure or obligation falls shall be determined in accordance with the Uniform System of Accounts.

Annual Operating Projection. A. On or before the first fifteenth day of December November of each Fiscal Year, a preliminary draft of the budget (“Preliminary Annual Operating Projection”), setting forth Management Company's ’s reasonable estimate, based on assumptions believed by Management Company to be reasonable at the time of preparation of the Preliminary Annual Operating Projection, estimate of Gross Revenues, Operating ExpensesDeductions, and Operating Profit and such other information as Owner or a Qualified Lender may reasonably request for the Hotel for the forthcoming Fiscal Year for the HotelYear, shall be prepared by Management Company and submitted to TRS Owner for its review and approval (which shall not be unreasonably withheld, conditioned, withheld or delayed). In the event that Management Company is seeking reimbursement from Owner pursuant to Section 14.01.B(i) for the salaries, wages and/or benefits of any officers or directors of Management Company or Management Company’s Affiliates who shall be regularly or temporarily employed or assigned on a full-time basis at the Hotel, this shall be shown as a separate line item under the Deductions category of the Annual Operating Projection. On or before the first (1st) day of December of each Fiscal Year, Management Company and Owner shall have a meeting to discuss the Annual Operating Projection; provided that Management Company shall submit the Annual Operating Projection to Owner at least fourteen (14) days in advance of such meeting (or such meeting shall be rescheduled to a date that is at least fourteen (14) days after the submission of the Annual Operating Projection to Owner). If TRS Owner does not approve the Preliminary preliminary Annual Operating Projection in full, within thirty (30) days of its receipt, TRS Owner shall notify Management Company of each category of expenses (a “Category”) of which TRS Owner does not approve and include a reasonably detailed explanation of any such objectionapprove. The Preliminary preliminary Annual Operating Projection thereafter shall be revised as TRS Owner and Management Company may agree, and shall, upon TRSOwner’s approval, constitute the approved Annual Operating Projection (“Approved Annual Operating Projection”) for the forthcoming Fiscal Year. In the event that TRS Owner does not notify Management Company in writing within said 30-day review period that it does not approve of specified Categories, the Preliminary preliminary Annual Operating Projection shall constitute the Approved approved Annual Operating Projection for the forthcoming Fiscal Year. The approval of TRS Owner shall not be required with respect to any Category if, and to the extent that, the Preliminary preliminary Annual Operating Projection with respect to such Category for a given Fiscal Year is, in all material respectsrespects (taking into account any extraordinary non-recurring items), the same as the Approved Annual Operating Projection for the preceding Fiscal Year with adjustments for inflationas adjusted by the Consumer Price Index. B. The Annual Operating Projection is an estimate only and Management Company shall, from time to time during each Fiscal Year as it deems appropriate, suggest revisions thereto for Owner’s review and approval. Management Company will at all times give good faith consideration to Owner’s suggestions regarding any Annual Operating Projection. Management Company shall not, except as provided in Sections 8.03 A above and 9.03 C and 9.03 D below, depart from any approved Annual Operating Projection, or make any expenditures or incur any expenses not provided for therein, without Owner’s prior approval. C. If TRS Owner and Management Company fail to mutually agree on any given Category or Categories in the Preliminary preliminary Annual Operating Projection within forty-five (45) days after the submission to TRS Owner of the preliminary draft described in the first sentence of 9.03 A, Management Company shall continue to manage and operate the Hotel as follows until such agreement is reached: (i) with respect to each Category in such Preliminary preliminary Annual Operating Projection which has been approved or deemed approved by TRSOwner, Management Company may make expenditures and incur obligations under such Category as so approved; and (ii) with respect to any Category which has not been approved by TRSOwner, Management Company may continue to make expenditures and incur obligations under such Category in accordance with the amounts provided for such Category in the Approved Annual Operating Projection approved for the prior Fiscal Year, with adjustments for inflation and as adjusted by the Consumer Price Index, with such additional adjustments therein as shall be necessary to take into account: account (x) any differences in occupancy which may be experienced in the current Fiscal Year as compared to the prior Fiscal Year; Year with respect to those costs that are occupancy sensitive, and (y) any increased costs beyond the control of Management Company for the same or comparable services or products. C. Management Company shall, from time to time during each Fiscal Year as it deems appropriate, suggest revisions to the Approved Annual Operating Projection for TRS's review and approval; each party will at all times give good faith consideration to the other party’s suggestions regarding revisions to the Approved Annual Operating Projection. Management Company will use commercially reasonable and diligent efforts to achieve the goals reflected in the Approved Annual Operating Projection; however, the same cannot be relied upon as a guarantee, representation, warranty, or assurance of actual results that may be experienced during and for such Fiscal Year. Management Company shall not, except as provided in Sections 8.03 A, 9.03 B and 9.03 D, depart from the Approved Annual Operating Projection, or make any expenditures or incur any expenses not provided for therein, without TRS's prior approval. D. TRS Owner and Management Company acknowledge that the Approved Annual Operating Projection approved by Owner is an estimate only and that unforeseen circumstances such as, but not limited to, the costs of labor, materials, services and supplies, casualty, operation of law, or economic and market conditions may make adherence to the Approved Annual Operating Projection impracticable for certain Categories. The If in the judgment of the Management Company the expenditures reasonably expected to be made in any of the following Categories during the then current Fiscal Year exceed by five percent (5%) or more the amount budgeted for such Category under which any expenditure or obligation falls in the then current Annual Operating Projection, Management Company shall be determined notify Owner promptly in accordance with the Uniform System of Accounts.writing: Rooms; Food, Beverage and Banquet; Telephone, Gift Shop, and other; Administrative and General; Advertising and Sales; Repairs and Maintenance;

Annual Operating Projection. A. On or before Forty-five (45) Days prior to the first day of December beginning of each Fiscal Year, Operator shall submit to Owner a preliminary draft of projection (the budget (“Preliminary "Annual Operating Projection”), setting forth Management Company's reasonable estimate, based on assumptions believed by Management Company to be reasonable at the time of preparation ") of the Preliminary Annual Operating Projection, estimated financial results of the operation of the Retirement Community during the next Fiscal Year. Such projection shall project the estimated Gross Revenues, Operating Expenses, and Operating Profit for the forthcoming Fiscal Year for the HotelRetirement Community, shall be prepared by Management Company and submitted to TRS for its review and approval (which shall not be unreasonably withheld, conditioned, or delayed). If TRS does not approve taking into account the Preliminary Annual Operating Projection in full, within thirty (30) days of its receipt, TRS shall notify Management Company of each category of expenses (a “Category”) of which TRS does not approve and include a reasonably detailed explanation of any such objection. The Preliminary Annual Operating Projection thereafter shall be revised as TRS and Management Company may agree, and shall, upon TRS’s approval, constitute the approved Annual Operating Projection (“Approved Annual Operating Projection”) for the forthcoming Fiscal YearRetirement Community's market area. In preparing the event that TRS does not notify Management Company in writing within said 30-day review period that it does not approve of specified Categories, the Preliminary Annual Operating Projection shall constitute the Approved Annual Operating Projection for the forthcoming each Fiscal Year. The approval , Operator's goal will be the maximization of TRS shall not be required the long-term Operating Profit of the Retirement Community, in keeping with respect to any Category ifthe Marriott Standards, Legal Requirements, and to the extent that, general standards of the Preliminary retirement industry for similar quality-tier properties. If there are material items in any given Annual Operating Projection with respect to such Category which have been budgeted at significantly different amounts from the amounts actually experienced (or projected) for a given Fiscal Year is, in all material respects, the same as the Approved Annual Operating Projection for items in the preceding Fiscal Year with adjustments Year, Operator agrees to take reasonable steps to ensure that, at Owner's request, qualified personnel from Operator's staff are available to explain these differences to Owner. A meeting (or meetings) for inflation. B. If TRS and Management Company fail to mutually agree on any given Category or Categories in the Preliminary Annual Operating Projection such purpose shall be held, at Owner's request, within forty-five (45) days a reasonable period of time after the submission to TRS Owner of the preliminary draft described in of the first sentence of 9.03 A, Management Company Annual Operating Projection. Operator shall continue to manage and operate the Hotel as follows until such agreement is reached: (i) consult with Owner with respect to each Category in such Preliminary the Annual Operating Projection which has been approved or deemed approved by TRS, Management Company may make expenditures and incur obligations under such Category as so approved; and (ii) with respect to any Category which has not been approved by TRS, Management Company may continue to make expenditures and incur obligations under such Category in accordance with the amounts provided for such Category in the Approved Annual Operating Projection for the prior Fiscal Year, with adjustments for inflation and with such additional adjustments therein as shall be necessary to take into account: (x) any differences in occupancy which may be experienced in the current Fiscal Year as compared to the prior Fiscal Year; and (y) any increased costs beyond the control of Management Company for the same or comparable services or products. C. Management Company shall, from time to time during each Fiscal Year as it deems appropriate, suggest revisions to the Approved Annual Operating Projection for TRS's review and approval; each party will at all times give good faith consideration to Owner's suggestion regarding the other party’s suggestions regarding revisions same, but shall not be required to obtain Owner's approval thereof, except that Owner shall have the right to approve the Annual Operating Projection, which approval shall not be unreasonably delayed or denied, in the event that Owner's Priority was not paid for the prior Fiscal Year or is not forecasted to be reached in the current Fiscal Year or is not forecasted to be reached in the Annual Operating Projection for the following Fiscal Year that has been submitted to Owner. B. If Owner's approval of the Annual Operating Projection is required pursuant to Section 9.03A and if Owner fails to approve the Annual Operating Projection prepared by Operator pursuant to Section 9.03A prior to the Approved first Day of the Fiscal Year in question, Operator shall commence the operations of the Retirement Community for said Fiscal Year, and continue such operations until Owner's approval is obtained, under a provisional Annual Operating Projection which shall consist of the actual financial results of the immediately preceding Fiscal Year, with projected Operating Expenses adjusted by the CPI, and with further reasonable adjustments as necessary to comply with any Legal Requirements or respond to known cost -------------------------------------------------------------------------------- OPERATING AGREEMENT PAGE 44 increases or any extraordinary circumstances that Operator has good reason to anticipate in the subject Fiscal Year. C. Operator shall use its best efforts to adhere to the Annual Operating Projection. Management Company will use commercially reasonable and diligent efforts to achieve the goals reflected in the Approved Annual Operating Projection; It is understood, however, the same cannot be relied upon as a guarantee, representation, warranty, or assurance of actual results that may be experienced during and for such Fiscal Year. Management Company shall not, except as provided in Sections 8.03 A, 9.03 B and 9.03 D, depart from the Approved Annual Operating Projection, or make any expenditures or incur any expenses not provided for therein, without TRS's prior approval. D. TRS and Management Company acknowledge that the Approved Annual Operating Projection is an estimate only a projection by Operator of estimated results and that unforeseen various circumstances such as, but not limited to, the costs of labor, materialsmaterial, services and supplies, casualty, operation of law, or economic and market conditions may make adherence to achievement of the Approved Annual Operating Projection impracticable for certain Categoriesor not obtainable. The Category under which any expenditure or obligation falls Accordingly, Operator shall be determined under no obligation to achieve any of the results shown in accordance the Annual Operating Projection, and Operator shall be entitled to depart therefrom due to such circumstances, provided that nothing herein shall be deemed to authorize Operator to take any action prohibited by this Agreement to reduce Operator's other obligations hereunder. D. Operator shall notify Owner of any significant variations from the Annual Operating Projection promptly after Operator learns of the same, but in not event later than the date on which Operator is required to give Owner the Interim Report covering the period in which such variation occurs. Any such notice shall set forth in reasonable detail the nature, extent and, if known by Operator, the cause of such variation, and recommendations of appropriate actions, either to correct the variation or to prevent or minimize its occurrence or effect. Owner and Operator shall, at Owner's request, meet to review such variations and discuss appropriate action with the Uniform System of Accountsrespect thereto.

Annual Operating Projection. A. On or before the first (1st) day of December November of each Fiscal Year, a preliminary draft of the budget budget, in a format approved by Master Tenant (“Preliminary Annual Operating Projection”), setting forth Management Company's ’s reasonable estimate, based on assumptions believed by Management Company to be reasonable at the time of preparation of the Preliminary Annual Operating Projection, estimate of Gross Revenues, Deductions, Operating ExpensesProfit, cash flow (broken out by net operating income, capital expenditures, debt service payments, principal draws and paydowns by month through the anticipated sale of the Property), and Operating Profit such other information is reflected on Exhibit F hereto and as Master Tenant or a Lender may reasonably request for the Hotel for the forthcoming Fiscal Year for the HotelYear, itemized on a category line item basis, shall be prepared by Management Company and submitted to TRS Master Tenant for its review and approval (which shall not be unreasonably withheld, conditioned, or delayed)approval. If TRS Master Tenant does not approve the Preliminary preliminary Annual Operating Projection in full, within thirty (30) days of its receipt, TRS Master Tenant shall notify Management Company of each category of expenses (a “Category”) of which TRS Master Tenant does not approve and include a reasonably detailed explanation of any such objectionapprove. The Preliminary preliminary Annual Operating Projection thereafter shall be revised as TRS Master Tenant and Management Company may agree, and shall, upon TRSMaster Tenant’s approval, constitute the applicable approved Annual Operating Projection (“Approved Annual Operating Projection”) for the forthcoming Fiscal Year. In To the event extent that TRS Master Tenant does not notify Management Company in writing within said 30-day review period that it does not approve of specified specific Categories, then the Preliminary previous year’s Annual Operating Projection, increased by five percent (5%), shall continue as the Annual Operating Projection shall constitute with respect to such Categories for the Approved forthcoming Fiscal Year, until Master Tenant approves the Annual Operating Projection for the forthcoming Fiscal Year. . B. The approval of TRS shall not be required with respect to any Category if, and to the extent that, the Preliminary Annual Operating Projection with respect to such Category for a given Fiscal Year is, in all material respects, the same as the Approved Annual Operating Projection for the preceding Fiscal Year with adjustments for inflation. B. If TRS is an estimate only and Management Company fail to mutually agree on any given Category or Categories in the Preliminary Annual Operating Projection within forty-five (45) days after the submission to TRS of the preliminary draft described in the first sentence of 9.03 A, Management Company shall continue to manage and operate the Hotel as follows until such agreement is reached: (i) with respect to each Category in such Preliminary Annual Operating Projection which has been approved or deemed approved by TRS, Management Company may make expenditures and incur obligations under such Category as so approved; and (ii) with respect to any Category which has not been approved by TRS, Management Company may continue to make expenditures and incur obligations under such Category in accordance with the amounts provided for such Category in the Approved Annual Operating Projection for the prior Fiscal Year, with adjustments for inflation and with such additional adjustments therein as shall be necessary to take into account: (x) any differences in occupancy which may be experienced in the current Fiscal Year as compared to the prior Fiscal Year; and (y) any increased costs beyond the control of Management Company for the same or comparable services or products. C. Management Company shall, from time to time during each Fiscal Year as it deems appropriate, suggest revisions to the Approved Annual Operating Projection thereto for TRS's Master Tenant’s review and approval; each party . Management Company will at all times give good faith consideration to the other partyMaster Tenant’s suggestions regarding revisions to the Approved any Annual Operating Projection. Management Company will use commercially reasonable and diligent efforts to achieve the goals reflected in the Approved Annual Operating Projection; however, the same cannot be relied upon as a guarantee, representation, warranty, or assurance of actual results that may be experienced during and for such Fiscal Year. Management Company shall not, except as provided in Sections 8.03 A, 9.03 B A above and 9.03 DD below, depart from the Approved any approved Annual Operating Projection, or make any expenditures or incur any expenses not provided for therein, without TRS's Master Tenant’s prior approval. D. TRS and Management Company acknowledge that the Approved Annual Operating Projection is an estimate only and that unforeseen circumstances such as, but not limited to, the costs of labor, materials, services and supplies, casualty, operation of law, or economic and market conditions may make adherence to the Approved Annual Operating Projection impracticable for certain Categories. The Category under which any expenditure or obligation falls shall be determined in accordance with the Uniform System of AccountsC. Intentionally omitted.

Annual Operating Projection. A. On or before the first day of December of each Fiscal Year, a preliminary draft of the budget (“Preliminary Annual Operating Projection”), setting forth Management Company's reasonable estimate, based on assumptions believed by Management Company to be reasonable at the time of preparation of the Preliminary Annual Operating Projection, of Gross Revenues, Operating Expenses, and Operating Profit for the forthcoming Fiscal Year for the Hotel, shall be prepared by Management Company and submitted to TRS Owner for its review and approval (which shall not be unreasonably withheld, conditioned, or delayed). If TRS Owner does not approve the Preliminary Annual Operating Projection in full, within thirty (30) days of its receipt, TRS Owner shall notify Management Company of each category of expenses (a “Category”) of which TRS Owner does not approve and include a reasonably detailed explanation of any such objection. The Preliminary Annual Operating Projection thereafter shall be revised as TRS Owner and Management Company may agree, and shall, upon TRSOwner’s approval, constitute the approved Annual Operating Projection (“Approved Annual Operating Projection”) for the forthcoming Fiscal Year. In the event that TRS Owner does not notify Management Company in writing within said 30-day review period that it does not approve of specified Categories, the Preliminary Annual Operating Projection shall constitute the Approved Annual Operating Projection for the forthcoming Fiscal Year. The approval of TRS Owner shall not be required with respect to any Category if, and to the extent that, the Preliminary Annual Operating Projection with respect to such Category for a given Fiscal Year is, in all material respects, the same as the Approved Annual Operating Projection for the preceding Fiscal Year with adjustments for inflation. B. If TRS Owner and Management Company fail to mutually agree on any given Category or Categories in the Preliminary Annual Operating Projection within forty-five (45) days after the submission to TRS Owner of the preliminary draft described in the first sentence of 9.03 A, Management Company shall continue to manage and operate the Hotel as follows until such agreement is reached: (i) with respect to each Category in such Preliminary Annual Operating Projection which has been approved or deemed approved by TRSOwner, Management Company may make expenditures and incur obligations under such Category as so approved; and (ii) with respect to any Category which has not been approved by TRSOwner, Management Company may continue to make expenditures and incur obligations under such Category in accordance with the amounts provided for such Category in the Approved Annual Operating Projection for the prior Fiscal Year, with adjustments for inflation and with such additional adjustments therein as shall be necessary to take into account: (x) any differences in occupancy which may be experienced in the current Fiscal Year as compared to the prior Fiscal Year; and (y) any increased costs beyond the control of Management Company for the same or comparable services or products. C. Management Company shall, from time to time during each Fiscal Year as it deems appropriate, suggest revisions to the Approved Annual Operating Projection for TRSOwner's review and approval; each party will at all times give good faith consideration to the other party’s suggestions regarding revisions to the Approved Annual Operating Projection. Management Company will use commercially reasonable and diligent efforts to achieve the goals reflected in the Approved Annual Operating Projection; however, the same cannot be relied upon as a guarantee, representation, warranty, or assurance of actual results that may be experienced during and for such Fiscal Year. Management Company shall not, except as provided in Sections 8.03 A, 9.03 B and 9.03 D, depart from the Approved Annual Operating Projection, or make any expenditures or incur any expenses not provided for therein, without TRSOwner's prior approval. D. TRS Owner and Management Company acknowledge that the Approved Annual Operating Projection is an estimate only and that unforeseen circumstances such as, but not limited to, the costs of labor, materials, services and supplies, casualty, operation of law, or economic and market conditions may make adherence to the Approved Annual Operating Projection impracticable for certain Categories. The Category under which any expenditure or obligation falls shall be determined in accordance with the Uniform System of Accounts.

Annual Operating Projection. A. On or before Forty-five (45) Days prior to the first day of December beginning of each Fiscal Year, Operator shall submit to Owner a preliminary draft of projection (the budget (“Preliminary "Annual Operating Projection”), setting forth Management Company's reasonable estimate, based on assumptions believed by Management Company to be reasonable at the time of preparation ") of the Preliminary Annual Operating Projection, estimated financial results of the operation of the Retirement Community during the next Fiscal Year. Such projection shall project the estimated Gross Revenues, Operating Expenses, and Operating Profit for the forthcoming Fiscal Year for the HotelRetirement Community, shall be prepared by Management Company and submitted to TRS for its review and approval (which shall not be unreasonably withheld, conditioned, or delayed). If TRS does not approve taking into account the Preliminary Annual Operating Projection in full, within thirty (30) days of its receipt, TRS shall notify Management Company of each category of expenses (a “Category”) of which TRS does not approve and include a reasonably detailed explanation of any such objection. The Preliminary Annual Operating Projection thereafter shall be revised as TRS and Management Company may agree, and shall, upon TRS’s approval, constitute the approved Annual Operating Projection (“Approved Annual Operating Projection”) for the forthcoming Fiscal YearRetirement Community's market area. In preparing the event that TRS does not notify Management Company in writing within said 30-day review period that it does not approve of specified Categories, the Preliminary Annual Operating Projection shall constitute the Approved Annual Operating Projection for the forthcoming each Fiscal Year, Operator's goal will be the maximization of the long-term Operating Profit of the Retirement Community, in keeping with the Marriott Standards, Legal Requirements, and the general standards of the retirement industry for similar quality-tier properties. The approval of TRS Operator shall not be required consult with Owner with respect to any Category if, and to the extent that, the Preliminary Annual Operating Projection with respect to such Category for a given Fiscal Year is, in all material respects, the same as the Approved Annual Operating Projection for the preceding Fiscal Year with adjustments for inflation. B. If TRS and Management Company fail to mutually agree on any given Category or Categories in the Preliminary Annual Operating Projection within forty-five (45) days after the submission to TRS of the preliminary draft described in the first sentence of 9.03 A, Management Company shall continue to manage and operate the Hotel as follows until such agreement is reached: (i) with respect to each Category in such Preliminary Annual Operating Projection which has been approved or deemed approved by TRS, Management Company may make expenditures and incur obligations under such Category as so approved; and (ii) with respect to any Category which has not been approved by TRS, Management Company may continue to make expenditures and incur obligations under such Category in accordance with the amounts provided for such Category in the Approved Annual Operating Projection for the prior Fiscal Year, with adjustments for inflation and with such additional adjustments therein as shall be necessary to take into account: (x) any differences in occupancy which may be experienced in the current Fiscal Year as compared to the prior Fiscal Year; and (y) any increased costs beyond the control of Management Company for the same or comparable services or products. C. Management Company shall, from time to time during each Fiscal Year as it deems appropriate, suggest revisions to the Approved Annual Operating Projection for TRS's review and approval; each party will at all times give good faith consideration to Owner's suggestion regarding the other party’s suggestions regarding revisions same, but shall not be required to obtain Owner's approval thereof, except that Owner shall have the right to approve the Annual Operating Projection, which approval shall not be unreasonably delayed or denied, in the event that Owner's Priority was not paid for the prior Fiscal Year or is not forecasted to be reached in the current Fiscal Year or is not forecasted to be reached in the Annual Operating Projection for the following Fiscal Year that has been submitted to Owner. B. If Owner's approval of the Annual Operating Projection is required pursuant to Section 9.03A and if Owner fails to approve the Annual Operating Projection prepared by Operator pursuant to Section 9.03A prior to the Approved first Day of the Fiscal Year in question, Operator shall commence the operations of the Retirement Community for said Fiscal Year, and continue such operations until Owner's approval is obtained, under a provisional Annual Operating Projection which shall consist of the actual financial results of the immediately preceding Fiscal Year, with projected Operating Expenses adjusted by the CPI, and with further reasonable adjustments as necessary to comply with any Legal Requirements or respond to known cost increases or any extraordinary circumstances that Operator has good reason to anticipate in the subject Fiscal Year. C. Operator shall use its best efforts to adhere to the Annual Operating Projection. Management Company will use commercially reasonable and diligent efforts to achieve the goals reflected in the Approved Annual Operating Projection; It is understood, however, the same cannot be relied upon as a guarantee, representation, warranty, or assurance of actual results that may be experienced during and for such Fiscal Year. Management Company shall not, except as provided in Sections 8.03 A, 9.03 B and 9.03 D, depart from the Approved Annual Operating Projection, or make any expenditures or incur any expenses not provided for therein, without TRS's prior approval. D. TRS and Management Company acknowledge that the Approved Annual Operating Projection is an estimate only a projection by Operator of estimated results and that unforeseen various circumstances such as, but not limited to, the costs of labor, materialsmaterial, services and supplies, casualty, operation of law, or economic and market conditions may make adherence to achievement of the Approved Annual Operating Projection impracticable for certain Categoriesor not obtainable. The Category under which any expenditure or obligation falls Accordingly, Operator shall be determined under no obligation to achieve any of the results shown in accordance the Annual Operating Projection, and Operator shall be entitled to depart therefrom due to such circumstances, provided that nothing herein shall be deemed to authorize Operator to take any action prohibited by this Agreement to reduce Operator's other obligations hereunder. D. Operator shall notify Owner of any significant variations from the Annual Operating Projection promptly after Operator learns of the same, but in not event later than the date on which Operator is required to give Owner the Interim Report covering the period in which such variation occurs. Any such notice shall set forth in reasonable detail the nature, extent and, if known by Operator, the cause of such variation, and recommendations of appropriate actions, either to correct the variation or to prevent or minimize its occurrence or effect. Owner and Operator shall, at Owner's request, meet to review such variations and discuss appropriate action with the Uniform System of Accountsrespect thereto.

Annual Operating Projection. A. On or before the first day of December of each Fiscal Year, a preliminary draft of the budget (“Preliminary "Annual Operating Projection”"), setting forth Management Company's reasonable estimate, based on assumptions believed by Management Company to be reasonable at the time of preparation of the Preliminary Annual Operating Projection, estimate of Gross Revenues, Operating ExpensesDeductions, and Operating Profit for the forthcoming Fiscal Year for the Hotel, shall be prepared by Management Company and submitted to TRS Owner for its review and approval (which shall not be unreasonably withheld, conditioned, withheld or delayed). In the event that Management Company is seeking reimbursement from Owner pursuant to Section 14.01.B(i) for the salaries, wages and/or benefits of any officers or directors of Management Company or Management Company's Affiliates who shall be regularly or temporarily employed or assigned on a full-time basis at the Hotel, this shall be shown as a separate line item under the Deductions category of the Annual Operating Projection. On or before the fifteenth (15th) day of December of each Fiscal Year, Management Company and Owner shall have a meeting to discuss the Annual Operating Projection; provided that Management Company shall submit the Annual Operating Projection to Owner at least fourteen (14) days in advance of such meeting (or such meeting shall be rescheduled to a date that is at least fourteen (14) days after the submission of the Annual Operating Projection to Owner). If TRS Owner does not approve the Preliminary preliminary Annual Operating Projection in full, within thirty (30) days of its receipt, TRS Owner shall notify Management Company of each category of expenses (a “"Category”") of which TRS Owner does not approve and include a reasonably detailed explanation of any such objectionapprove. The Preliminary preliminary Annual Operating Projection thereafter shall be revised as TRS Owner and Management Company may agree, and shall, upon TRS’s Owner's approval, constitute the approved Annual Operating Projection (“Approved Annual Operating Projection”) for the forthcoming Fiscal Year. In the event that TRS Owner does not notify Management Company in writing within said 30-day review period that it does not approve of specified Categories, the Preliminary preliminary Annual Operating Projection shall constitute the Approved approved Annual Operating Projection for the forthcoming Fiscal Year. The approval of TRS Owner shall not be required with respect to any Category if, and to the extent that, the Preliminary preliminary Annual Operating Projection with respect to such Category for a given Fiscal Year is, in all material respectsrespects (taking into account any extraordinary non-recurring items), the same as the Approved Annual Operating Projection for the preceding Fiscal Year with adjustments for inflationas adjusted by the Consumer Price Index. B. The Annual Operating Projection is an estimate only and Management Company shall, from time to time during each Fiscal Year as it deems appropriate, suggest revisions thereto for Owner's review and approval. Management Company will at all times give good faith consideration to Owner's suggestions regarding any Annual Operating Projection. Management Company shall not, except as provided in Sections 8.03 A above and 9.03 C and 9.03 D below, depart from any approved Annual Operating Projection, or make any expenditures or incur any expenses not provided for therein, without Owner's prior approval. C. If TRS Owner and Management Company fail to mutually agree on any given Category or Categories in the Preliminary preliminary Annual Operating Projection within forty-five (45) days after the submission to TRS Owner of the preliminary draft described in the first sentence of 9.03 A, Management Company shall continue to manage and operate the Hotel as follows until such agreement is reached: (i) with respect to each Category in such Preliminary preliminary Annual Operating Projection which has been approved or deemed approved by TRSOwner, Management Company may make expenditures and incur obligations under such Category as so approved; and (ii) with respect to any Category which has not been approved by TRSOwner, Management Company may continue to make expenditures and incur obligations under such Category in accordance with the amounts provided for such Category in the Approved Annual Operating Projection approved for the prior Fiscal Year, with adjustments for inflation and as adjusted by the Consumer Price Index, with such additional adjustments therein as shall be necessary to take into account: account (x) any differences in occupancy which may be experienced in the current Fiscal Year as compared to the prior Fiscal Year; , and (y) any increased costs beyond the control of Management Company for the same or comparable services or products. C. Management Company shall, from time to time during each Fiscal Year as it deems appropriate, suggest revisions to the Approved Annual Operating Projection for TRS's review and approval; each party will at all times give good faith consideration to the other party’s suggestions regarding revisions to the Approved Annual Operating Projection. Management Company will use commercially reasonable and diligent efforts to achieve the goals reflected in the Approved Annual Operating Projection; however, the same cannot be relied upon as a guarantee, representation, warranty, or assurance of actual results that may be experienced during and for such Fiscal Year. Management Company shall not, except as provided in Sections 8.03 A, 9.03 B and 9.03 D, depart from the Approved Annual Operating Projection, or make any expenditures or incur any expenses not provided for therein, without TRS's prior approval. D. TRS Owner and Management Company acknowledge that the Approved Annual Operating Projection approved by Owner is an estimate only and that unforeseen circumstances such as, but not limited to, the costs of labor, materials, services and supplies, casualty, operation of law, or economic and market conditions may make adherence to the Approved Annual Operating Projection impracticable for certain Categories. The If in the judgment of the Management Company the expenditures reasonably expected to be made in any of the following Categories during the then current Fiscal Year exceed by ten percent (10%) or more the amount budgeted for such Category under which any expenditure or obligation falls in the then current Annual Operating Projection, Management Company shall be determined notify Owner promptly in accordance with the Uniform System of Accounts.writing: Rooms; Food, Beverage and Banquet; Telephone, Gift Shop, and other; Administrative and General; Advertising and Sales; Repairs and Maintenance;

Annual Operating Projection. A. On or before the first day of December June 1 of each Fiscal Year, a preliminary draft of the budget (referred to as the “Preliminary Annual Operating Projection”), setting forth Management Company's reasonable estimate, based on assumptions believed by Management Company to be reasonable at the time of preparation of the Preliminary Annual Operating Projection, estimate of Gross Revenues, Operating ExpensesDeductions, and Operating Profit (with the appropriate breakdowns for the Facilities) for the forthcoming Fiscal Year for the HotelHotel & Conference Center, shall be prepared by Management Company and submitted to TRS Owners for its their review and approval approval. The parties acknowledge that the estimates provided in the Preliminary Annual Operating Projection will be updated and revised, as appropriate, on December 1 (which of the same calendar year). B. On or before December 1 of each Fiscal Year, a revised draft of the Preliminary Annual Operating Projection (referred to as the “Revised Annual Operating Projection”), setting forth Management Company's revised and reasonable estimate of Gross Revenues, Deductions, and Operating Profit (with the appropriate breakdowns for the Facilities) for the related Fiscal Year for the Hotel & Conference Center, shall not be unreasonably withheld, conditioned, or delayed)prepared by Management Company and submitted to Owners for their review and approval. If TRS does Owners do not approve the Preliminary Revised Annual Operating Projection in full, within thirty (30) days of its receipt, TRS Owners shall notify Management Company of each category of expenses expenses/revenues (a “Category”) of which TRS does Owners do not approve and include a reasonably detailed explanation of any such objectionapprove. The Preliminary Revised Annual Operating Projection thereafter shall be further revised as TRS Owners and Management Company may agree, and shall, upon TRS’s Owners’ approval, constitute the approved Annual Operating Projection annual operating projection (the “Approved Annual Operating Projection”) for the forthcoming related Fiscal Year. In the event that TRS does Owners do not notify Management Company in writing within said 30-day review period that it does they do not approve of specified Categories, the Preliminary Revised Annual Operating Projection shall constitute the Approved Annual Operating Projection for the forthcoming related Fiscal Year. . C. The approval of TRS shall not be required with respect to any Category if, and to the extent that, the Preliminary Annual Operating Projection with respect is an estimate only and Management Company shall, from time to such Category for a given time during each Fiscal Year isas it deems appropriate, in suggest revisions thereto for Owners' review and approval. Management Company will at all material respects, the same as the Approved times give good faith consideration to Owners’ suggestions regarding any Annual Operating Projection Projection. Management Company shall not, except as provided in Sections 8.03 A above and 9.03 D and 9.03 E below, depart from any approved Annual Operating Projection, or make any expenditures or incur any expenses not provided for the preceding Fiscal Year with adjustments for inflationtherein, without Owners' prior approval. B. D. If TRS Owners and Management Company fail to mutually agree on any given Category or Categories in the Preliminary Revised Annual Operating Projection within forty-five (45) days after the submission to TRS of the preliminary draft Owners as described in the first sentence of 9.03 AB, any party hereto may elect to submit the disputed Category(ies) for resolution to an impartial nationally recognized consultant or public accounting firm with at least ten (10) years recent professional hospitality experience (as of the Effective Date, similar to PriceWaterhouse Coopers, PKF Consulting, Inc., or HVS International) in the general subject matter of the dispute, mutually agreed upon by the parties. The decision of the third party consultant shall be binding and final on the parties. The parties shall each pay one-third of the cost of the third party consultant from their own funds and not from Gross Revenues or the Reserves. During the period that any disputed Category(ies) is being resolved as set forth immediately above, Management Company shall continue to manage and operate the Hotel & Conference Center as follows until such agreement resolution is reached: (i) with respect to each Category in such Preliminary Revised Annual Operating Projection which has been approved or deemed approved by TRSOwners, Management Company may make expenditures and incur obligations under such Category as so approved; and (ii) with respect to any Category which has not been approved by TRSOwners, Management Company may continue to make expenditures and incur obligations under such Category in accordance with the amounts provided for such Category in the Approved Annual Operating Projection approved for the prior Fiscal Year, with adjustments for inflation as provided in Section 10.8 of the Operating Agreement and with such additional adjustments therein as shall be necessary to take into account: account (x) any differences (increases or decreases) in occupancy which may be experienced in the current Fiscal Year as compared to the prior Fiscal Year; Year and (y) any variable (increased or decreased) costs beyond the control of Management Company for the same or comparable services or productsproducts and (z) any increased operating expenses which are fixed in nature beyond the control of Management Company. C. Management Company shall, from time to time during each Fiscal Year as it deems appropriate, suggest revisions to the Approved Annual Operating Projection for TRS's review and approval; each party will at all times give good faith consideration to the other party’s suggestions regarding revisions to the Approved Annual Operating Projection. Management Company will use commercially reasonable and diligent efforts to achieve the goals reflected in the Approved Annual Operating Projection; however, the same cannot be relied upon as a guarantee, representation, warranty, or assurance of actual results that may be experienced during and for such Fiscal Year. Management Company shall not, except as provided in Sections 8.03 A, 9.03 B and 9.03 D, depart from the Approved Annual Operating Projection, or make any expenditures or incur any expenses not provided for therein, without TRS's prior approval. D. TRS E. Owners and Management Company acknowledge that the Approved Annual Operating Projection approved by Owners is an estimate only and that unforeseen circumstances such as, but not limited to, the costs of labor, materials, services and supplies, casualty, operation of law, or economic and market conditions may make adherence to the Approved Annual Operating Projection impracticable for certain Categories. The If in the judgment of the Management Company the expenditures reasonably expected to be made in any of the following Categories during the then current Fiscal Year exceed by ten percent (10%) or more the amount budgeted for such Category under which any expenditure or obligation falls in the then current Annual Operating Projection, Management Company shall be determined notify Owners promptly in accordance with the Uniform System of Accounts.writing: Rooms; Food, Beverage and Banquet; Telephone, Gift Shop, and other; Administrative and General; Advertising and Sales; Repairs and Maintenance;

Annual Operating Projection. A. On or before (a) At least sixty (60) days prior to the first day of December start of each Fiscal Calendar Year, Manager shall submit to Owner a preliminary draft of duly completed Annual Operating Projection for the budget next following Calendar Year in the standard form required by Owner (“Preliminary the "Annual Operating Projection”") which shall consist of: (i) For each Accounting Period of the forthcoming Calendar Year, Manager's forecast of Gross Receipts, Deductions (including, without limitation, labor costs), setting forth Net Operating Income, the Base Management Company's reasonable estimateFee, based on assumptions believed by the Incentive Management Company Fee, Centralized Services to be reasonable at provided and the time of preparation cost thereof, departmental profits, a detailed employee compensation plan, a room rate plan, strategies for improving operations, other revenues and expenses and the components thereof, including any necessary reserves for Working Capital requirements and any other information reasonably requested by the Owner which relates to the Hotel or its operation (said portion of the Preliminary Annual Operating ProjectionProjection being herein referred to as the "Operating Budget"). These projections shall be itemized and detailed and also presented in summary form. Key assumptions forming the basis of such estimates shall be presented in narrative form. (ii) A detailed schedule of the amounts to be deposited to the Capital Reserve and all anticipated expenditures to be made from the Capital Reserve or otherwise needed to be funded by the Owner during the forthcoming Calendar Year as capital expenditures, (said portion of Gross Revenuesthe Annual Operating Projection being herein referred to as the "Capital Budget"). Such schedule shall include, Operating Expensesto the extent then known, expenditures (the following expenditures, together with all other expenditures which are classified as "capital expenditures" under GAAP, shall be collectively referred to as "Capital Expenditures") necessary for: (A) replacements, renewals and additions to the FF&E of the Hotel; (B) exterior and interior repainting; resurfacing building walls, floors and roofs; replacing folding walls; and miscellaneous similar non-routine or major repairs, alterations, improvements, renewals, replacements, and Operating Profit additions to the Hotel including, without limitation, the structure, the roof, the exterior facade and all of the mechanical, electrical, heating, ventilating, air conditioning, plumbing or vertical transportation elements of the building in which the Hotel is located; (C) technological upgrades; and (D) other Capital Expenditures during the ensuing Calendar Year. The Capital Budget shall also indicate the estimated time schedule for making such Capital Expenditures, including each item required, the number of units to be replaced, unit costs and costs in aggregate, and vendors proposed to be used in performing any Capital Expenditures together with such additional information as Owner shall request, and as shall then be known to Manager. Each proposed Capital Budget shall include a provision for an amount equal to five percent (5%) of the total Capital Budget for unallocated contingencies. In addition to the proposed Capital Budget, the Manager shall provide a forecast of capital needs of the Hotel for the subsequent three (3) Calendar Years. (iii) A projection of any amounts, and timing thereof, required for Working Capital. (iv) A reasonably detailed program (the "Marketing Plan") for advertising and marketing the Hotel for the forthcoming Fiscal Year for Calendar Year, together with a budget (the Hotel"Marketing Budget") detailing, on a line-item basis, the costs associated with the Marketing Plan. Key assumptions forming the basis of such budget itemization shall be prepared by Management Company presented in narrative form. (b) Manager shall arrange for a meeting between its senior regional vice president and submitted to TRS for its review and approval (which shall Owner not be unreasonably withheld, conditioned, or delayed). If TRS does not approve the Preliminary Annual Operating Projection in full, within less than thirty (30) days prior to the commencement of its receipt, TRS shall notify Management Company of each category of expenses (a “Category”) of the Calendar Year to which TRS does not approve and include a reasonably detailed explanation of any such objection. The Preliminary the Annual Operating Projection thereafter relates to discuss the Annual Operating Projection. Owner shall be revised as TRS and Management Company may agreegive its written approval or disapproval of the Annual Operating Projection, including without limitation the components thereof (i.e., the Operating Budget, the Capital Budget, and shall, upon TRS’s approval, constitute the approved Marketing Plan and Marketing Budget) within fifteen (15) days of such meeting. If Owner objects to all or any portion of such Annual Operating Projection it shall notify Manager in writing together with a written explanation of its disapproval, and the parties shall use reasonable efforts to reach agreement on items to which Owner objects. Notwithstanding the foregoing, Owner will be deemed to approve all costs necessary to comply with applicable collective bargaining agreements, if any. From time to time, Owner shall have the right to request (“Approved Annual and Manager shall provide) specific information on all items of expenditure referred to in the Operating Projection”) Budget, amounts actually expended and the basis on which the amount of expenditures was determined, for the forthcoming Fiscal Year. In purpose of assisting Owner in monitoring performance and compliance by Manager with the event that TRS does above provisions. (c) If agreement is not notify Management Company in writing within said 30-day review period that it does not approve reached between the parties before the commencement of specified Categories, the Preliminary Calendar Year to which the Annual Operating Projection relates: (i) As to those line-items in the Operating Budget and the Marketing Budget to which Manager and Owner have agreed, Manager may operate the Hotel in accordance with such agreed line-items; provided, however, that Manager shall constitute make only those Capital Expenditures authorized by Owner; (ii) As to those line-items in the Approved Operating Budget and the Marketing Budget to which Owner and Manager have not agreed, Manager shall operate the Hotel in accordance with such line-items set forth in the Annual Operating Projection applicable to the immediately preceding Calendar Year (subject to annual CPI Index adjustments), except that Manager shall make only those Capital Expenditures authorized by Owner; and, (iii) Either Manager or Owner may refer the line-items, or any other matter expressly provided for herein, to which they have not agreed to arbitration, as follows: (A) Either party may serve upon the forthcoming Fiscal Year. The approval of TRS shall not be required with respect other a written notice stating that such party desires to any Category ifhave such controversy reviewed by an independent accountant in a nationally recognized accounting firm, and naming three (3) accountants, each from a different firm, such party would find acceptable to the extent that, the Preliminary Annual Operating Projection with respect to such Category for a given Fiscal Year is, in all material respects, the same act as the Approved Annual Operating Projection for the preceding Fiscal Year with adjustments for inflation. B. If TRS and Management Company fail to mutually agree on any given Category or Categories in the Preliminary Annual Operating Projection within forty-five an arbitrator. Within fifteen (4515) days after receipt of such notice, the submission to TRS other party shall designate one (1) of such accountants and shall notify the party requesting arbitration of such designation and the name of the preliminary draft described person so designated. Any person acting as an accounting arbitrator hereunder, in order to qualify as an arbitrator, shall have had not less than ten (10) years experience as an accountant for hotel properties comparable to the first sentence Hotel. (B) If the party upon whom such written request for arbitration is served shall fail to designate its arbitrator within fifteen (15) days after receipt of 9.03 Asuch notice, Management Company then any arbitrator designated by the party requesting arbitration shall continue act as the arbitrator. The decision and award of the arbitrator shall be based upon an "either-or" decision in which the position proposed by one of the parties shall be chosen, without compromise, by the arbitrator(s), binding upon both Owner and Manager, and enforceable in any court of competent jurisdiction. In making such decision and award, the arbitrator shall consider the Required Standards in effect as of the Effective Date, the Comparable Hotels, other similarly positioned hotels managed by Manager and expenditures made in prior years for such line-items in dispute. Such decision and award may allocate the costs of such arbitration to manage and operate one of the Hotel as follows until such agreement is reached: parties or disproportionately between the parties. Any arbitration shall take place in Chicago, Illinois. (id) with With respect to each Category in such Preliminary an Annual Operating Projection which has been approved (in whole or deemed in part) in accordance with Section 4.04(b) and Section 4.04(c) hereof: (i) Manager shall limit the costs and expenses incurred by or on behalf of Owner to those included within the approved by TRSOperating Budget and Capital Budget, Management Company may and will not incur any obligation (or make expenditures any expenditure which Owner or Manager is not obligated to make) which Manager knows at the time will result in a Significant Variation except for costs (such as taxes and incur obligations under such Category as so approved; insurance) that are not within the direct control of Manager and (ii) with respect to costs incurred in any Category which has not been approved by TRS, Management Company may continue to make expenditures and incur obligations under such Category emergency in accordance with the amounts provided provisions of Section 4.04(g). (ii) Manager shall notify Owner whenever during the course of a Calendar Year Manager anticipates or becomes aware that it is likely for such Category a Significant Variation to occur and shall provide Owner, in each instance, with a written explanation of the Approved Annual Operating Projection reasons therefor. (iii) The general manager of the Hotel and as appropriate, the heads of operating departments of the Hotel, shall meet with representatives of Owner on a monthly basis to review the results of operations for the prior Fiscal Year, with adjustments for inflation period and with such additional adjustments therein as shall be necessary to take into account: (x) any differences in occupancy which may be experienced in the current Fiscal Year as compared to the prior Fiscal Year; and (y) any increased costs beyond the control forecasts of Management Company operations for the same or comparable services or productsHotel. C. Management Company shall(iv) To the extent that revenues do not achieve budgeted levels, from time to time during each Fiscal Year as it deems appropriate, suggest revisions to the Approved Annual Operating Projection for TRS's review and approval; each party will at all times give good faith consideration to the other party’s suggestions regarding revisions to the Approved Annual Operating Projection. Management Company will Manager shall use commercially reasonable and diligent efforts to achieve the goals reflected decrease operating expenses below budgeted levels in the Approved Annual Operating Projection; however, the same cannot be relied upon as a guarantee, representation, warranty, or assurance corresponding amount. (e) After approval of actual results that may be experienced during and for such Fiscal Year. Management Company shall not, except as provided in Sections 8.03 A, 9.03 B and 9.03 D, depart from the Approved an Annual Operating Projection, or make any expenditures or incur any expenses not provided for thereinOwner and Manager, without TRS's prior approvalat their regular meetings to review operations, shall also review the adherence by Manager to the Annual Operating Projection. D. TRS (i) If Owner, for any reason, believes that Manager has failed, in any respect, to adhere to the provisions of this Agreement with respect to the Annual Operating Projection, it shall discuss the same with Manager and Management Company acknowledge that provide the Approved Manager a reasonable opportunity to submit a reasonable written explanation. (ii) At any periodic meetings following approval of an Annual Operating Projection, Manager shall have the right to make suggested changes or alterations therein which, to the extent approved by Owner, in the exercise of its reasonable discretion, and feasible in connection with operations for the remainder of the then current Calendar Year, shall be implemented by the Manager, subject to the same standards of implementation applicable to approval by the Owner of the Annual Operating Projection in the first instance. (f) Manager recognizes that the budgeting process is an estimate only a key aspect of the relationship between Owner and Manager created hereby and Manager agrees that unforeseen circumstances such as, but not limited to, the costs of labor, materials, services and supplies, casualty, operation of law, or economic and market conditions may make adherence to the Approved Annual Operating Projection impracticable shall be prepared with due diligence and after consideration of all relevant factors. Manager agrees that, on a periodic basis, if Manager anticipates that results will vary significantly from those forecasted or budgeted, it will revise its budget estimates for the remainder of the Calendar Year in question, taking into account performance of the Hotel to date and projected market conditions and shall provide Owner with copies of any such budget revisions; provided, that the terms of the Annual Operating Projection shall govern the operations of the Hotel and Manager unless and until Owner approves such budget revisions, which approval shall not be unreasonably withheld. Owner hereby acknowledges that increases in occupancy and certain Categoriesincreases in revenue may also involve increases in expenses associated therewith. The Category under which necessity for an amendment to an Annual Operating Projection shall not be deemed a Default by the Manager hereunder. (g) If Manager believes that a dangerous condition exists at the Hotel or expenditure is required as a result of fire or other emergency, Manager may incur expenditures in taking appropriate and reasonable remedial action without Owner's approval (but with written notice to Owner as promptly as practicable following such expenditure, but in any event within three (3) days subsequent to the expenditure) and whether or not the expenditure is provided for in the Operating Budget or obligation falls shall be determined Capital Budget in accordance with the Uniform System following circumstances: (i) if there is an emergency threatening the Hotel, its guests, invitees or employees; or, (ii) if the continuation of Accountsthe given condition will subject Manager and/or Owner to civil or criminal liability, and Owner, after receiving written notice from Manager regarding such condition, has failed either to: (A) remedy the situation; or, (B) inform Manager that it has a good faith basis for disputing the application of any such laws, ordinance, regulation or order, and take appropriate legal action to stay the effectiveness of any such law, ordinance, regulation or order.