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(c) The annual budgets referred to in subparagraphs (a) and (b) above shall be reviewed and are subject to approval by the County. On or before the date of the Cabarrus County Commissioners' last regularly - scheduled meeting prior to the end of each Fiscal Year, the County shall notify SMG of any changes to the annual operating budget and the cash flow funding budget for the succeeding Fiscal Year proposed by SMG and with such changes, if any, as are made by the County. In the event that SMG agrees to such changes, which agreement shall not be unreasonably withheld, conditioned or delayed, such budgets shall be the Approved Budgets for the upcoming Fiscal Year and, if the parties cannot agree on Approved Budgets for the upcoming Fiscal Year, then the previous Fiscal Year's Approved Budgets shall be the Ap- proved Budgets for such upcoming Fiscal Year until a new budget is agreed upon by the parties. 5.4 Budget Modifications Initiated by SMG SMG may submit to the Contract Administrator at any time prior to the close of a Fiscal Year a supplemental or revised annual operating budget or cash now budget for such Fis- cal Year. Upon the approval of the County of such supplemental or revised budget, the Approved Budgets for such Fiscal Year shall be deemed amended to incorporate such supplemental or re- vised budget. The Approved Budgets may only be amended as set forth in Section 5.5 below or in the two preceding sentences except that SMG shall have the right to propose amendments to the Approved Budgets for approval by the County as may be necessary or appropriate as the re- sult of the scheduling by SMG of additional events or activities at the Facility (and the incur- rence of additional Operating Expenses arising from the scheduling of additional events or ac- tivities at the Facility) as long as prior to the scheduling of such events or activities, SMG had a reasonable good faith belief that the projected Net Operating Loss for the Fiscal Year as set forth in the Approved Budgets would not be increased as a result of such additional events or activi- ties. 5.5 Budget Modifications Initiated by the County In the event that it appears reasonably likely, in any year during the term hereof, that the actual Net Operating Loss/Profit for such Fiscal Year will be larger or smaller as the case may be than projected in the annual operating budget for such Fiscal Year, the County may re- quest from SMG a plan for reduction of Operating Expenses to a level consistent with the bud- geted Net Operating Loss/Profit amount. SMG shall forthwith comply with any such expense reduction requested by the County, whether such reduction was included in SMG's proposed plan for reduction or not, and the approved budgets for such Fiscal Year shall be modified accor- dingly, provided that if the County's requested reductions, in SMG's reasonable good faith judgment, could materially interfere, impede or impair the ability of SMG to manage, operate or promote the Facility, SMG shall have the right to terminate this Agreement pursuant to Section 12.2 (with the effect set forth in Section 12.3) and provided further that SMG shall not be con- strued to have breached its obligations under this Agreement if such alleged breach has been di- rectly caused by the reductions requested by the County, provided that the County has been first given reasonable prior written notice by SMG that such specific breach or default by SMG was likely to result from such reduction. pdfconvert. 9450.1. cabarms_agreement_2015. doc 15 F -1 Attachment number 1 Page 95