RES 2024040 - Laserfiche WebLink

4854-3151-6602 v3 5 partnership agreement; provided however, for the purpose of calculating Annual Operating Expenses, the partnership management fee and the asset management fee may increase annually by a maximum of three percent (3%), and provided further, that subject to the proviso below, such fees may be included as Annual Operating Expenses only to the extent actually paid in any calendar year. Notwithstanding the immediately preceding sentence, during the fifteen (15) year period commencing upon the Project placed-in-service date, unpaid partnership management fees and asset management fees may accrue for up to a maximum of three (3) years; any otherwise accrued but unpaid portion of the partnership management fee or asset management fee that is not paid on a current basis in any particular year shall be payable only from Borrower’s share of Surplus Cash. The asset management fee payable to the Investor Limited Partner shall be included in Annual Operating Expenses only during the fifteen (15) year period commencing upon the Project placed-in-service date. Following such 15-year period, for the purpose of calculating Surplus Cash, only the partnership management fee shall be includable in Annual Operating Expenses. 1.3.4 EXCLUSIONS FROM ANNUAL OPERATING EXPENSES. For the purpose of calculating Surplus Cash, except to the extent expressly permitted pursuant to Section 1.3.3 above, Annual Operating Expenses shall exclude the following: incentive management fees, developer fees and interest on any deferred developer fees; contributions to Project reserves (except as permitted pursuant to Section 1.3.3); debt service payments on any loan which is not an Approved Senior Loan, including without limitation, unsecured loans, sponsor loans, and loans secured by deeds of trust that are subordinate to the Deed of Trust; depreciation, amortization, depletion and other non-cash expenses; expenses paid for with disbursements from any reserve account; capital expenditures unless approved in advance by City; distributions to partners; any amount paid to any general partner of Borrower or any entity controlling or under common control with the entities that control any general partner of Borrower. Notwithstanding the foregoing limitation regarding payments to Borrower and related parties, the following fees shall be included in Annual Operating Expenses, subject to applicable limitations set forth in Section 1.3.3 above, even if paid to Borrower, an affiliate of Borrower, or a partner of Borrower: fees paid to a property management agent, resident services agent, or social services agent pursuant to a property management agreement or services agreement approved by City; partnership management fees, asset management fees, and subject to Section 1.3.5, repayment of cash advances by Borrower or its partners to cover Project operating expense deficits or emergency cash needs of the Project. Payments to Borrower, its partners or affiliates in excess of the applicable limitations set forth in Section 1.3.3 or for purposes that are excluded from Annual Operating Expenses pursuant to the terms of this Note, shall not be counted toward Annual Operating Expenses for the purpose of calculating Surplus Cash but may be paid from Borrower’s share of Surplus Cash. 1.3.5 ADJUSTMENT TO OPERATING EXPENSES. Notwithstanding anything to the contrary set forth herein, for the purpose of calculating Surplus Cash, Annual Operating Expenses shall include: (a) the repayment of operating deficit loans provided by Borrower’s limited partner(s) provided however, interest payable on such loans may be included in Annual Operating Expenses only in an amount equivalent to the lesser of (i) interest accrued at the actual interest rate charged for the loan, and (ii) interest accrued at the then-current Applicable Federal Rate, and (b) the amount of any tax credit adjuster that is required to be paid solely from Project cash flow.