Note 2007 0910 Estabrook Senior Housing LP (2)

Home

Section 202 Capital Grant, mandatory HUD provisions, as set forth in any Rider to the OPA, this Note, or the Agency Deed of Trust shall govern. 1.2 ANNUAL PAYMENTS FROM SURPLUS CASH. By no later than June 1 of each year following the issuance of a final certificate of occupancy for the Project, Borrower shall pay to Agency fifty percent (50%) of all Surplus Cash generated by the Project during the previous calendar year to reduce the indebtedness owed under this Note. No later than May 1 of each year following the issuance of a final certificate of occupancy for the Project, Borrower shall provide to Agency Borrower's calculation of Surplus Cash for the previous calendar year, accompanied by such supporting documentation as Agency may reasonably request, including without limitation, an independent audit prepared for the Project by a certified public accountant in accordance with generally accepted accounting principles. No later than November l of each year following issuance of the final certificate of occupancy for the Project, Borrower shall provide to Agency a projected budget for the following calendar year which shall include an estimate of Surplus Cash. 1.2.1 "Surplus Cash" shall mean for each calendar year during the term hereof, the amount by which Gross Revenue (defined below) exceeds Annual Operating Expenses (defined below) for the Project. Surplus Cash shall also include net cash proceeds realized from any refinancing of the Project, less fees and closing costs reasonably incurred in connection with such refinancing, and any Agency-approved uses of the net cash proceeds of the refinancing. 1.2.2 "Gross Revenue" shall mean for each calendar year during the term hereof, all revenue, income, receipts and other consideration actually received by Borrower from the operation and leasing of the Project. Gross Revenue shall include, but not be limited to: all rents, fees and charges paid by tenants; Section 8 payments or other rental subsidy payments received for the dwelling units; deposits forfeited by tenants; all cancellation fees, price index adjustments and any other rental adjustments to leases or rental agreements; proceeds from vending and laundry room machines; the proceeds of business interruption or similar insurance; the proceeds of casualty insurance; condemnation awards for a taking of part or all of the Property or the Improvements for a temporary period; and the fair market value of any goods or services provided to Borrower in consideration for the leasing or other use of any part of the Project. Gross Revenue shall include any release of funds from replacement and other reserve accounts to Borrower other than for costs associated with the Project. Gross Revenue shall not include tenant security deposits, loan proceeds, capital contributions or similar advances. 1.2.3 "Annual Operating Expenses" shall mean for each calendar year during term hereof, the following costs reasonably and actually incurred for the operation and maintenance of the Project to the extent that they are consistent with an annual independent audit performed by a certified public accountant using generally accepted accounting principles: property taxes and assessments; debt service currently due and payable on a non-optional basis (excluding debt service due from residual receipts or surplus cash of the Project) on loans which have been approved by the Agency and which are secured by deeds of trust senior in priority to the Agency Deed of Trust ("Approved Senior Loans"); property management fees in the maximum amount of $660 per unit per year (or such higher amount as may be required by the holder of an Approved Senior Loan or pursuant to an Agency- approved property management contract executed by Borrower for the Project), increasing annually at the rate of the net percentage change in the Consumer Price Index, All Urban Consumers (All Items), for the San Francisco/Oakland Metropolitan Area as published by the 9sbz2~a