Principal Terms Relating to Development of Project. Item Amount(s) Notes GP Management Fee $[ ] per year, with a 3% annual inflation adjustment. Accrues and compounds if not paid. Paid to GP from distributable cash of the partnership (“Cash Flow”); 3% inflation adjustment applied to the previous year’s amount. Asset Management Fee $[ ] per year, with a 3% annual inflation adjustment. Accrues and compounds if not paid. Paid to ALP from distributable cash of the partnership (“Cash Flow”); 3% inflation adjustment applied to the previous year’s amount. Ongoing Cash Flow Split 1. Replenishment of required reserves (replacement, operations, and capital repairs and other reserves, such as services, that may be required by funding sources) 2. Repayment of partner loans 3. Payment of Asset Management Fee 4. Payment of GP Management Fee and 5. If any, payment of accrued and unpaid Asset Management Fees then GP Management Fees 6. If any, repayment of loans repaid from Cash Flow 7. Remainder to partners in accordance with their respective ownership interests (50% GP / 50% ALP) Cash Flow Split for Capital Transactions (Sale/Refi) 1. Repayment of outstanding debt of the partnership (may include full repayment of certain loans for the Project) 2. Replenish required reserves (only for any refinancing) 3. Repayment of partner loans Item Amount(s) Notes 4. Payment of current Asset Management Fee then GP Management Fee 5. Payment of accrued and unpaid Asset Management Fee then GP Management Fee 6. Remainder to partners in accordance with their respective ownership interests (50% GP / 50% ALP) Option to Purchase Partnership Interests Purchase Price: FMV GP will have the option to purchase ALP’s ownership interests at any time for FMV. In the event AHFC exercises its option to purchase the Project under the Ground Lease (see table below), AHFC will also have the option to purchase the ALP’s ownership interest in the partnership. Ground Lease $[ ] per year, with a 3% annual inflation adjustment. AHFC owns the land in fee simple and the Ground Lease will be executed by the Partnership, as tenant. Ground Lease term is for 55 years. Partnership will have the right to sublease a portion of the Project for commercial purposes or for use as publicly accessible amenities. AHFC will have the option to acquire the Project and assume or terminate any subleases at any time.
