Definition of Distribution Net Operating Income

Distribution Net Operating Income means the annualized gross income received by Borrower from the operation of the Property for the period in question, less expenses incurred and/or paid by Borrower in connection with the operation and maintenance of the Property that are allocable to such period, computed on an accrual basis without regard to depreciation, amortization, value adjustments such as "mark to market" reduction in value of assets or debt service on the Loans, but otherwise in accordance with generally accepted accounting principles consistently applied. Included within the expenses shall be (1) a management fee equal to the greater of (a) the actual management fee or (b) three percent (3.0%), (2) annual capital expenditures equal to the greater of (a) actual capital expenditures or (b) $200 per unit per annum, and (c) prorated ad valorem taxes and insurance premiums. Only actual income received shall be included in such calculations and no credit will be given for free rent periods. Documentation of Distribution Net Operating Income shall be certified by Borrower with detail reasonably satisfactory to Administrative Agent and shall be subject to the reasonable approval of Administrative Agent.
Sample 1