Definition of Unencumbered Property Net Operating Income or


Unencumbered Property Net Operating Income or Unencumbered Property NOI" means with respect to any Unencumbered Property, for any period, the aggregate of actual recurring "property revenues" earned by a Subsidiary Borrower (or, as applicable, an Eligible Canadian Subsidiary) in such period (provided however that any amounts accrued shall only include those amounts not more than 45 days delinquent in arrears) for the Unencumbered Property (including Base Rent and expense reimbursement, but excluding straight line and percentage rent), (or in the case of Unencumbered Properties subject to EPR Senior First Mortgages, the related mortgage loan interest income) and all as otherwise determined in accordance with GAAP together with recoveries from tenants as determined in accordance with GAAP, all such amounts shall be attributable to such period and accrued according to GAAP, less (i) all "property expenses" consisting solely of expenses incurred or accrued by a Subsidiary Borrower (or, as applicable, an Eligible Canadian Subsidiary) that are directly related to the operation and ownership of such Unencumbered Property, including any real estate taxes, sales taxes, common area maintenance charges, accounting and administration, security, utilities, maintenance, janitorial, premiums for casualty and liability insurance or ground lease payments (excluding from the foregoing expenses for depreciation, amortization, interest and leasing commissions with respect to such Unencumbered Property) actually paid by a Subsidiary Borrower (or, as applicable, an Eligible Canadian Subsidiary), and (ii) an allowance for property management expenses calculated at the greater of (A) three percent (3.0%) of Base Rent or (B) actual property management expenses (the "Management Expense"), and (iii) the Replacement Reserve (provided that the deduction described in this clause (iii) shall not apply to Unencumbered Property consisting of land under development). If such period is less than a year, expenses described in clause (i) above that are payable less frequently than monthly during the course of a year (e.g., real estate taxes and insurance premiums) shall be adjusted by "straight lining" the amounts so that such expenses are accrued on a monthly basis over the course of a year and fairly stated for each period. In the event that information for the trailing four (4) quarters or for any other period as may be required hereunder, is not available for a Unencumbered Property, then, if such Unencumbered Property is a new theatre or a new Lease executed by a Tenant and a Subsidiary Borrower (or, as applicable, an Eligible Canadian Subsidiary) in connection with the acquisition of a Unencumbered Property, then for purposes of this calculation, "property revenues" shall mean the actual annual base rent on an effective triple net basis for the Unencumbered Property, as provided for in the applicable Lease less the Management Expense and less the Replacement Reserve (or, in the case of a Unencumbered Property encumbered by an EPR Senior First Mortgage, "property revenues" shall mean the actual interest income for the Unencumbered Property). Additionally, as the Unencumbered Property financial information becomes available (i.e., after the Unencumbered Property has been in operation for one quarter, two quarters, etc.) such actual information shall be used, as adjusted, by "annualizing" the amounts so that such amounts are received on a monthly basis over the course of a year and fairly stated for each period, and as further adjusted for "property expenses," Management Expense and Replacement Reserves.
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