BLP PARTNERSHIP LOAN AGREEMENT 9-1-2005

expenses approved in writing by the City and not listed above. Annual Operating Costs shall not include the following: depreciation, amortization, depletion or other non-cash expenses; and any amount expended from a reserve account. • (iii) "City Loan Payment" shall mean the annual interest only payment that is due on the City Loan pursuant to Section 2.3(b) as paid from Surplus Cash. Subject to Section 2.3(b)(ii)(4) and (iv) below, the annual interest only payment shall be equal to ten percent (10%) per annum on the principal amount of the City Loan then outstanding. (iv) "Developer Contribution" shall mean the Three Hundred Thousand ($300,000) fee to be paid to the Borrower in connection with Borrower's development of the Project plus such greater amount as is contributed by Borrower to the Project, plus any contributions or loans made to Borrower by a parent or affiliate of Borrower and related to the Project and payment of any fees or interest related to such loans. (v) "Gross Revenue" with respect to a particular fiscal year shall mean all revenue, income, receipts, and other consideration actually received from operation and leasing of the Project. Gross Revenue shall include, but not be limited to: all rents, fees and charges paid by tenants, Section 8 payments or other rental subsidy payments received for the dwelling units, deposits forfeited by tenants, net proceeds from vending and laundry room machines; the proceeds of business interruption or similar insurance and not paid to Senior Lenders; the proceeds of casualty insurance not used to rebuild or repair the Project and not paid to Senior Lenders; and condemnation awards for a taking of part or all of the Project for a temporary period not paid to Senior Lenders. Gross Revenue shall not include tenants' security deposits, loan proceeds, capital contributions or similar advances. (vi) "HELP Loan Payment" shall mean the annual payment that is due on the Help Loan as set forth in the loan agreement and promissory note evidencing the Help Loan. (vii) "Management Incentive Bonus" with respect to a particular fiscal year shall mean the annual incentive bonus more particularly described in the Assisted Living Management Agreement dated September 1, 2005, by and between Eskaton Properties Incorporated and BLP Partnership, Inc, or a successor Management Agreement approved by City. (viii) "Operating/Management Reserve Deposit" with respect to a particular fiscal year shall mean an amount equal to one percent (1%) of the Annual Operating Costs (including debt service on Approved Financing). The Operating Management Reserve Deposits shall not exceed an amount that would be equal to one-third of the Annual Operating Costs (including debt service on Approved Financing). The Operating Management Reserve Deposit may be used for an unforeseen economic situation related to the Project and shall not be considered ongoing Gross Revenue. (ix) "Surplus Cash" shall mean the difference between the Gross Revenue and Annual Operating Costs. 5 144V105\217525.16