RES 2024040 - Laserfiche WebLink

4854-3151-6602 v3 3 Borrower acknowledges that in City’s sole discretion, by written notice to Borrower, City may elect to apply Borrower’s payments of Surplus Cash toward the balance payable under the Ground Lease in lieu of applying such payments toward the balance payable under this Note. By not later than April 30 of each year, Borrower shall provide to City Borrower’s calculation of Surplus Cash for the previous calendar year, accompanied by such supporting documentation as City 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. The annual report shall include, without limitation, a Project income and expense statement and an accounting of deposits to and withdrawals from the Project replacement, operating, and other reserves. City shall have the right to inspect and audit Borrower’s books and records concerning the calculation of Surplus Cash, and to object within sixty (60) days from receipt of the report. Failure to timely object shall be deemed acceptance of the report. If City does object, City shall specify the reasons for disapproval. Borrower shall have thirty (30) days to reconcile any disapproved item. If Borrower and City cannot agree on the amount of Surplus Cash, an independent auditor mutually selected by Borrower and City shall resolve any disputed items. The cost of the auditor shall be shared equally by Borrower and City. By not later than November 1 of each year, Borrower shall provide to City a proposed budget for the following calendar year which shall include estimated Project revenue, expenses and debt service, and an estimate of Surplus Cash. City will review the proposed budget and, if acceptable, approve it, which approval shall not be unreasonably withheld, provided, however, if the proposed budget has not been rejected by City within forty-five (45) days of receipt, City shall be deemed to have accepted the budget. If the budget is not acceptable, City shall specify the reasons for disapproval. Once approved, any changes to the budget that exceed ten percent (10%) of the total budget shall require City's prior written consent, which consent shall not be unreasonably withheld. Upon City’s request, the budget shall include a long-term capital needs and replacement reserve plan supported by a physical needs assessment prepared by a third-party at Borrower’s expense. 1.3.1 “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 as described in Section 1.6 below, and net cash proceeds from any sale of the Project, less fees and closing costs reasonably incurred by Borrower in connection with such sale or refinancing, and any use of proceeds approved by City in the exercise of City’s sole discretion. 1.3.2 “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 and 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 not required to be paid to the holders of Approved Senior