Agmt17 HIP Housing Funds to Acquie 1512 Stafford

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shall be 75%), or (b) equal to an amortized payment assuming 3% simple interest and a 55 year term. Payment will be first applied to outstanding interest and then to principal until the Note is paid in full. In the event this payment is less than accumulated interest owed plus current interest, any unpaid interest will carry over to the following year. Interest will not compound on this interest carry-over. The entire outstanding principal balance plus any unpaid accrued interest will be due and payable upon Note Maturity. ii. The first payment will be due immediately upon receipt of the Notification Letter and annually, thereafter. A copy of the annual independent financial audit delineating Residual Receipts payment to City will also be delivered to City no later than May 1St after the end of each of the Project's fiscal years. A self -certified financial statement shall be permitted in lieu of an independent audit. iii. Definitions: 1. "Residual Receipts' means, with respect to the Project's fiscal year, the amount by which "Gross Revenue' exceeds "Annual Operating Expenses", as defined below. 2. "Gross Revenue" is defined as all rental and incidental income from the Project, but excluding tenant security deposits, loan proceeds and capital contributions and any interest earned on said deposits; and interest on reserves, impounds and other restricted accounts. 3. "Annual Operating Expenses" means reasonable costs actually incurred for operations 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. A copy of the audit will be delivered with payment as specified above. Costs associated with the Project operations and maintenance include the following: property and other taxes and assessments imposed on the Project; premiums for property damage and liability insurance and other such insurance as may be required by Owner's senior lenders; utility services not paid for directly by the tenants, including but not limited to water, sewer, trash collection, gas, and electricity; maintenance and repairs, including but not limited to pest control, landscaping and grounds maintenance, painting and decorating, cleaning, common systems repairs, general repairs, janitorial supplies, and others; and license or certificates of occupancy fees required for operation of the Project; general administrative expenses, including but not limited to advertising, marketing, security services and ATTY/AGR/2017.145/ STAFFORD FUNDING AGREEMENT REV: 06-21-17 JS Page 30 of 41