WITH RESPECT TO ANY PERMITTED LIENS AND REASONABLE ADDITIONS
TO, OR CREATIONS OF, RESERVES FOR REPAIRS AND REPLACEMENTS AND FOR CAPITAL
EXPENDITURES REQUIRED TO COMPLY WITH REQUIREMENTS UNDER ANY APPLICABLE LAWS OR
CONTRACTUAL OBLIGATIONS, BUT EXPRESSLY EXCLUDING: (A) ANY DEBT SERVICE ON THE
LOAN AND ON THE SECURED MORTGAGE DEBT, AND (B) EXPENDITURES MADE OUT OF RESERVES
PREVIOUSLY CREATED.
ANY EXPENDITURES WHICH IN ACCORDANCE WITH THE ACCRUAL BASIS
INCOME TAX ACCOUNTING ARE DEPRECIATED OR AMORTIZED OVER A PERIOD WHICH EXCEEDS
ONE (1) YEAR SHALL BE TREATED AS AN EXPENDITURE, FOR THE PURPOSES OF THE
FOREGOING CALCULATIONS, RATABLY OVER THE PERIOD OF DEPRECIATION OR
AMORTIZATION.
RESIDENTIAL SECURITY DEPOSITS RECEIVED AND DEPOSITED IN SEPARATE
ESCROW ACCOUNTS PURSUANT TO APPLICABLE LAWS SHALL NOT BE INCLUDED AN REVENUE
UNLESS AND UNTIL THE APPLICABLE PROJECT LEVEL ENTITY BECOMES ENTITLED TO RETAIN
THE SAME AS A RESULT OF A TENANT BREACH, AND THE REPAYMENT OF SUCH ESCROW
DEPOSITS TO RESIDENTIAL TENANTS SHALL NOT BE TREATED AS AN EXPENSE. SECURITY
DEPOSITS RECEIVED FROM NON-RESIDENTIAL TENANTS DURING ANY CALCULATION PERIOD
SHALL BE TREATED AS INCOME UPON RECEIPT AND AS AN EXPENSE UPON RETURN TO THE
TENANT UNLESS THE SAME ARE HOLD IN A SEPARATE ESCROW ACCOUNT IN WHICH EVENT
RECEIPT AND DISBURSEMENT SHALL BE TREATED IN THE SAME MANNER AS RESIDENTIAL
SECURITY DEPOSITS RECEIVED.
6)
"AGGREGATE DEBT SERVICE" SHALL MEAN THE AGGREGATE OF (A) AS
TO THE SECURED MORTGAGE DEBT,
THE ANNUAL AMOUNT OF PRINCIPAL AND INTEREST
PAYABLE ON A HYPOTHETICAL LOAN IN AN AMOUNT EQUAL TO THE SECURED MORTGAGE DEBT,
BASED UPON A THIRTY (30) ANNUAL AMORTIZATION SCHEDULE AND A PER ANNUM
INTEREST
RATE EQUAL TO THE ACTUAL BLENDED INTEREST RATES THEN IN EFFECT FOR THE SECURED
MORTGAGE DEBT, PLUS (B) AS TO THE LOAN, THE ANNUAL AMOUNT OF PRINCIPAL AND
INTEREST PAYABLE ON A HYPOTHETICAL LOAN IN AN AMOUNT EQUAL TO THE TOTAL
OUTSTANDINGS BASED UPON A THIRTY (30) YEAR ANNUAL AMORTIZATION SCHEDULE AND A
PER ANNUM
INTEREST RATE EQUAL TO THE DEEMED RATE OF INTEREST.
65
7)
"DEEMED RATE OF INTEREST" SHALL MEAN THE HIGHER OF (I) THE
ANNUAL RATE OF INTEREST PAYABLE ON THE RELEVANT CALCULATION DATE (THAT IS, THE
LAST DAY OF THE APPLICABLE CALCULATION PERIOD) ON TEN (10) YEAR UNITED STATES
TREASURY OBLIGATIONS IN AMOUNTS APPROXIMATING THE TOTAL OUTSTANDINGS AT THE
INCEPTION OF THE CALCULATION PERIOD PLUS ONE AND ONE HALF PERCENT (1.50%) AND
(II) AN INTEREST RATE OF SIX PERCENT (6%) PER ANNUM.
(II)
DSC COVENANT.
THE DEBT SERVICE COVERAGE FOR EACH CALCULATION
PERIOD DETERMINED ON EACH CALCULATION DATE SHALL BE NOT LESS THAN 1.20:1.
IF
SUCH DEBT SERVICE COVERAGE COVENANT SHALL NOT BE SATISFIED ON ANY CALCULATION
DATE, BORROWER SHALL PREPAY A SUFFICIENT AMOUNT OF PRINCIPAL OUTSTANDING ON THE
LOAN SUCH THAT IF SUCH PRINCIPAL REDUCTION HAD BEEN MADE ON THE FIRST DAY OF THE
CALCULATION PERIOD THE DEBT SERVICE COVERAGE COVENANT WOULD HAVE BEEN SATISFIED.
IT SHALL BE AN EVENT OF DEFAULT IF BORROWER FAILS TO MAKE SUCH A PREPAYMENT NOT
LATER THAN THE FIRST TO OCCUR OF: