Common use of Net Operating Income Clause in Contracts

Net Operating Income. For any income producing Real Estate and for a given period, the difference between (a) any rentals, proceeds and other income received from such property during the determination period (excluding straight-line rents and FAS 141 accruals and similar adjustments), less (b) an amount equal to all costs and expenses (excluding Interest Expense, Taxes, depreciation and amortization expense, and any expenditures that are capitalized in accordance with GAAP) incurred as a result of, or in connection with, or properly allocated to, the operation or leasing of such property during the determination period (other than asset management fees); less (c) the Capital Expenditure Reserve; less (d) all rents, common area reimbursements and other income for such Real Estate received with respect to leases as to which (i) the tenant or any guarantor thereunder is subject to any bankruptcy, reorganization, insolvency, dissolution, liquidation or similar debtor relief proceeding, unless such tenant has expressly assumed its obligations under the applicable lease in such proceeding, (ii) the tenant which has exercised any termination option or otherwise not renewed its lease with a termination date within three months of the subject quarter end, and/or (iii) with respect to any guarantor subject to any bankruptcy, reorganization, insolvency, dissolution, liquidation or similar debtor relief proceeding, unless such guarantor is replaced by a credit worthy guarantor reasonably capable of performing the guarantor’s obligation and in the case of any lease in excess of 5,000 square feet such replacement guarantor shall be reasonably acceptable to Agent, plus (e) projected rentals in connection with any replacement lease executed in accordance with the terms of this Agreement with respect to any space described in (d) above. Net Operating Income shall be calculated based on the immediately preceding calendar quarter unless the Real Estate has not been owned by the Parent Borrower or its Subsidiaries for the entirety of such calendar quarter, in which event Net Operating Income shall be grossed up for such ownership period.

Net Operating Income. For any income producing Unencumbered Borrowing Base Property or other Real Estate and for a given period, the difference between (a) any rentals, proceeds and other income received from such property during the determination period (excluding straight-line rents and FAS 141 accruals and similar adjustments), less (b) an amount equal to all costs and expenses the sum of (excluding Interest Expensea) the rents, Taxes, depreciation and amortization expensecommon area reimbursements, and any expenditures that service and other income for such Real Estate for such period collected or received (or with respect to reimbursements from Tenants which are capitalized not in default of their Leases for common area expenses, taxes and insurance, accrued in accordance with GAAP) incurred in the ordinary course of business from tenants or licensees paying rent (excluding pre-paid rents and revenues and security deposits (except to the extent applied in satisfaction of tenants’ obligation for rent) and any non-recurring fees, charges or amounts including, without limitation, termination fees, but including any deposits made by Tenants for such period with respect to property taxes that will be paid in arrears) specifically excluding, however, (i) all equity contributions, (ii) all Loan proceeds, (iii) all insurance proceeds (except for rent loss insurance proceeds), (iv) all condemnation awards, (v) all receipts derived from the sale of any capital asset with respect to such Real Estate, (vi) all rents and/or other income derived from any Lease which is entered into by the REIT or any Subsidiary, as a result oflandlord, with any Borrower, Guarantor, or any Affiliate or Subsidiary of the Borrower or any Guarantor, as tenant, minus (b) all expenses paid or accrued (including taxes for such period not yet due and payable) by Borrower and related to the ownership, operation or maintenance of such Real Estate for such period, including, but not limited to, taxes, assessments and the like, insurance, utilities, payroll costs, maintenance, repair and landscaping expenses, marketing expenses, and general and administrative expenses (including an appropriate allocation for legal, accounting, advertising, marketing and other expenses incurred in connection withwith such Real Estate, or properly allocated tobut specifically excluding general overhead expenses of REIT and its Subsidiaries, the operation or leasing of such any property during the determination period (other than asset management feesfees and non recurring charges); less , minus (c) the Capital Expenditure Reserve; less actual property management expenses of such Real Estate, minus (d) all rents, common area reimbursements and other income for such Real Estate received from tenants or licensees in default of payment or other material obligations under their lease for thirty (30) days or more, or with respect to leases as to which (i) the tenant or licensee or any guarantor thereunder is subject to any bankruptcy, reorganization, arrangement, insolvency, readjustment of debt, dissolution, liquidation or similar debtor relief proceedingproceeding (and that, unless such tenant has expressly with respect to tenants in bankruptcy, have not unconditionally and finally affirmed or assumed its obligations under the applicable their lease in such bankruptcy proceeding), (ii) the tenant which has exercised any termination option or otherwise not renewed its lease with a termination date within three months of the subject quarter end, and/or (iii) with respect to any guarantor subject to any bankruptcy, reorganization, insolvency, dissolution, liquidation or similar debtor relief proceeding, unless such guarantor is replaced by a credit worthy guarantor reasonably capable of performing the guarantor’s obligation and in the case of any lease in excess of 5,000 square feet such replacement guarantor shall be reasonably acceptable to Agent, plus minus (e) projected rentals in connection with any replacement lease executed in accordance with a capital reserve of $0.05 per square foot of the terms improvements on such Real Estate; provided, however, that straight line leveling adjustments required under GAAP and amortization of this Agreement with respect intangibles pursuant to any space described in (d) above. Accounting Standards Codification Topic 805 shall be excluded from Net Operating Income shall be calculated based on the immediately preceding calendar quarter unless the Real Estate has Income. Non-Consenting Lender. See §18.8. Non-Defaulting Lender. At any time, any Lender that is not been owned by the Parent Borrower or its Subsidiaries for the entirety of a Defaulting Lender at such calendar quarter, in which event Net Operating Income shall be grossed up for such ownership periodtime.

Net Operating Income. For any income producing Real Estate and for a given period, the difference between (a) any rentals, proceeds and other income received from such property during the determination period (excluding straight-line rents and FAS 141 accruals and similar adjustments), less (b) an amount equal to all costs the sum of (a) the gross revenues (including interest income and, if and expenses when applicable, rent loss insurance proceeds) accrued from such Real Estate for such period in the ordinary course of business from such Real Estate (excluding Interest Expense, Taxes, depreciation pre-paid rents and amortization expense, revenues and any expenditures that are capitalized security deposits except to the extent applied in satisfaction of tenants’ obligations for rent and in all other respects in accordance with GAAP), minus (b) all expenses paid or accrued related to the ownership, operation or maintenance of such Real Estate in accordance with GAAP, including but not limited to taxes, assessments and the like, insurance, utilities, payroll costs, maintenance, repair and landscaping expenses, marketing expenses, and general and administrative expenses (including an appropriate allocation for legal, accounting, advertising, marketing and other expenses incurred as a result of, or in connection withwith such Real Estate, but specifically excluding general overhead expenses of the Borrower or properly allocated toany Subsidiary, the operation or leasing of such any property during the determination period (other than asset management fees, debt service charges, income taxes, depreciation, amortization, other non-cash expenses, and any extraordinary, non-recurring expense associated with any financing, merger, acquisition, divestiture or other capital transaction); less , minus (c) a management fee in the Capital Expenditure Reserve; less amount of three percent (d3.0%) all rents, common area reimbursements and other income of the gross revenues for such Real Estate received with respect Property for such period. Net Restricted Proceeds. See §8.15. Net Restricted Proceeds Limit. An amount equal to leases as to which lesser of (i) (X) at all times when the tenant aggregate Unencumbered Pool Value attributable to the Unencumbered Pool Properties shall be equal to or any guarantor thereunder is subject greater than the Target Pool Size, fifty percent (50.0%) of the total Net Restricted Proceeds then deposited with a Qualified Intermediary in connection with a Like Kind Exchange, and (Y) at all times when the aggregate Unencumbered Pool Value attributable to any bankruptcythe Unencumbered Pool Properties shall be less than the Target Pool Size, reorganizationforty-five percent (45.0%) of the total Net Restricted Proceeds then deposited with a Qualified Intermediary in connection with a Like Kind Exchange, insolvency, dissolution, liquidation or similar debtor relief proceeding, unless such tenant has expressly assumed its obligations under the applicable lease in such proceeding, and (ii) the tenant which has exercised any termination option or otherwise not renewed its lease with a termination date within three months twenty-five percent (25.0%) of the subject quarter end, and/or (iii) with respect aggregate Unencumbered Pool Value prior to any guarantor subject to any bankruptcy, reorganization, insolvency, dissolution, liquidation or similar debtor relief proceeding, unless such guarantor is replaced by a credit worthy guarantor reasonably capable of performing the guarantor’s obligation and in the case of any lease in excess of 5,000 square feet such replacement guarantor shall be reasonably acceptable to Agent, plus (e) projected rentals in connection with any replacement lease executed in accordance with the terms of this Agreement with respect to any space described in (d) above. Net Operating Income shall be calculated based on the immediately preceding calendar quarter unless the Real Estate has not been owned by the Parent Borrower or its Subsidiaries for the entirety commencement of such calendar quarterLike Kind Exchange. Non-Consenting Lender. See §18.8. Non-Defaulting Lender. At any time, in which event Net Operating Income shall be grossed up for any Lender that is not a Defaulting Lender at such ownership periodtime.

Net Operating Income. For any income producing Real Estate and for a given period, an amount equal to the difference between sum of (a) any rentalsthe rents, proceeds common area reimbursements and other income for such Real Estate for such period received in the ordinary course of business from such property during the determination period tenants in occupancy paying rent (excluding straightany reserve amounts received by a Person from tenants in accordance with the terms of their Leases, pre-line paid rents and FAS 141 accruals revenues, security deposits except to the extent applied in satisfaction of tenants’ obligations for rent, and similar adjustmentsany non-recurring fees, charges or amounts) minus (b) all expenses paid or accrued and related to the ownership, operation or maintenance of such Real Estate for such period, including, but not limited to, taxes, assessments and the like, insurance, utilities, payroll costs, maintenance, repair and landscaping expenses, marketing expenses, and general and administrative expenses (including an appropriate allocation for legal, accounting, advertising, marketing and other expenses incurred in connection with such Real Estate, but specifically excluding general overhead expenses of REIT and its Subsidiaries, any property management fees, in each case, in connection with such Real Estate), less minus (bc) excluding Real Estate which is encumbered by a Borrowing Base Loan, the greater of (i) actual property management expenses of such Real Estate, and (ii) an amount equal to all costs and expenses three percent (excluding Interest Expense3%) of the gross revenues from such Real Estate, Taxes, depreciation and amortization expense, and any expenditures that are capitalized in accordance with GAAP) incurred as a result of, or in connection with, or properly allocated to, the operation or leasing of such property during the determination period (other than asset management fees); less (c) the Capital Expenditure Reserve; less minus (d) all rents, common area reimbursements and other income for such Real Estate received from tenants in default of payment or other material obligations under their lease (provided that the failure of the Fundamental Tenant alone to pay the deferred rent and replacement reserves relating to the Fundamental Rent Deferment and interest payable with respect thereto shall not be deemed for the purpose of this clause (d) to disqualify the other rents received from the Fundamental Tenant from inclusion in Net Operating Income so long as the Fundamental Tenant is not in default of any other payment or other material obligations under the Fundamental Master Lease and so long as the Fundamental Landlords do not otherwise declare a default under the Fundamental Lease or otherwise exercise any rights or remedies thereunder with respect to such deferred rent, reserves and interest or otherwise), or with respect to leases as to which (i) the tenant or any guarantor thereunder is subject to any bankruptcyInsolvency Event; provided, reorganizationhowever, insolvencythat straight line leveling adjustments required under GAAP and amortization of deferred market rent into income pursuant to ASC 805 shall be excluded from the calculation of Net Operating Income. For the purposes of determining the Implied Debt Service Coverage Ratio, dissolutionexcept as provided below, liquidation Net Operating Income from the Borrowing Base Properties shall be calculated on a rolling quarterly annualized basis (that is, if such Real Estate has been owned only for one (1) full quarter, by multiplying the result for the current quarter times four (4), if such Real Estate has been owned only for two (2) full quarters, by multiplying the results for the prior two (2) quarters by two (2); or similar debtor relief proceedingif such Real Estate has been owned for three (3) full quarters, unless such tenant has expressly assumed its obligations under by multiplying the applicable lease results for the previous three (3) quarters by 4/3), and the first quarter in such proceedingthe calculation shall be the first full quarter of ownership; provided, (ii) the tenant which has exercised further, that any termination option or otherwise not renewed its lease with a termination date within three months of the subject quarter end, and/or (iii) payment received with respect to any guarantor subject the Texas Ten Portfolio (except as a result of the satisfaction of the conditions to any bankruptcythe occurrence of the Texas Ten Revaluation Date on or before December 31, reorganization2018) shall not be annualized but shall only be included in an amount actually received. Notwithstanding the foregoing and for the avoidance of doubt, insolvency, dissolution, liquidation (x) no rents or similar debtor relief proceeding, unless such guarantor is replaced by a credit worthy guarantor reasonably capable of performing the guarantor’s obligation and in the case of any lease in excess of 5,000 square feet such replacement guarantor shall be reasonably acceptable to Agent, plus (e) projected rentals in connection with any replacement lease executed in accordance with the terms of this Agreement other amounts received with respect to any space described the Texas Ten Real Estate shall be included in Net Operating Income unless the Texas Ten Revaluation Date has occurred on or before December 31, 2018, and (dy) aboveno payment of deferred rent or reserves relating to the Fundamental Rent Deferment or interest payable with respect thereto shall be included in Net Operating Income. In the instance that the Borrower or a Subsidiary Guarantor has not owned a Borrowing Base Property for at least one (1) quarter, the historic Net Operating Income shall be calculated based on used. To the immediately preceding calendar quarter unless extent that the Real Estate has not been owned by the Parent Borrower or its Subsidiaries for the entirety of such calendar quarter, in which event historic Net Operating Income shall is not available for any reason, Borrower may prepare a pro forma of Net Operating Income to be grossed up used for one (1) quarter until actual results for such ownership periodquarter are available, such proforma to be approved by Agent.”

Net Operating Income. For any income producing Real Estate and for a given period, an amount equal to the difference between sum of (a) any rentalsthe rents, proceeds common area reimbursements and other income for such Real Estate for such period received in the ordinary course of business from such property during the determination period tenants in occupancy paying rent (excluding straightany reserve amounts received by a Person from tenants in accordance with the terms of their Leases, pre-line paid rents and FAS 141 accruals revenues, security deposits except to the extent applied in satisfaction of tenants’ obligations for rent, and similar adjustmentsany non-recurring fees, charges or amounts) minus (b) all expenses paid or accrued and related to the ownership, operation or maintenance of such Real Estate for such period, including, but not limited to, taxes, assessments and the like, insurance, utilities, payroll costs, maintenance, repair and landscaping expenses, marketing expenses, and general and administrative expenses (including an appropriate allocation for legal, accounting, advertising, marketing and other expenses incurred in connection with such Real Estate, but specifically excluding general overhead expenses of REIT and its Subsidiaries, any property management fees, in each case, in connection with such Real Estate), less minus (bc) excluding Real Estate which is encumbered by a Borrowing Base Loan, the greater of (i) actual property management expenses of such Real Estate, and (ii) an amount equal to all costs and expenses three percent (excluding Interest Expense3%) of the gross revenues from such Real Estate, Taxes, depreciation and amortization expense, and any expenditures that are capitalized in accordance with GAAP) incurred as a result of, or in connection with, or properly allocated to, the operation or leasing of such property during the determination period (other than asset management fees); less (c) the Capital Expenditure Reserve; less minus (d) all rents, common area reimbursements and other income for such Real Estate received from tenants in default of payment or other material obligations under their lease (provided that the failure of the Fundamental Tenant alone to pay the deferred rent and replacement reserves relating to the Fundamental Rent Deferment and interest payable with respect thereto shall not be deemed for the purpose of this clause (d) to disqualify the other rents received from the Fundamental Tenant from inclusion in Net Operating Income so long as the Fundamental Tenant is not in default of any other payment or other material obligations under the Fundamental Master Lease and so long as the Fundamental Landlords do not otherwise declare a default under the Fundamental Lease or otherwise exercise any rights or remedies thereunder with respect to such deferred rent, reserves and interest or otherwise), or with respect to leases as to which (i) the tenant or any guarantor thereunder is subject to any bankruptcyInsolvency Event; provided, reorganizationhowever, insolvencythat straight line leveling adjustments required under GAAP and amortization of deferred market rent into income pursuant to ASC 805 shall be excluded from the calculation of Net Operating Income. For the purposes of determining the Implied Debt Service Coverage Ratio, dissolutionexcept as provided below, liquidation Net Operating Income from the Borrowing Base Properties shall be calculated on a rolling quarterly annualized basis (that is, if such Real Estate has been owned, or similar debtor relief proceeding, unless such tenant has expressly assumed its obligations under the applicable lease in such proceeding, (ii) the tenant which has exercised any termination option or otherwise not renewed its lease with a termination date within three months of the subject quarter end, and/or (iii) with respect to any guarantor subject the Texas Ten Portfolio, leased pursuant to any bankruptcythe Replacement Texas Ten Lease, reorganizationonly for one (1) full quarter, insolvencyby multiplying the result for the current quarter times four (4), dissolutionif such Real Estate has been owned, liquidation or similar debtor relief proceeding, unless such guarantor is replaced by a credit worthy guarantor reasonably capable of performing the guarantor’s obligation and in the case of any lease in excess of 5,000 square feet such replacement guarantor shall be reasonably acceptable to Agent, plus (e) projected rentals in connection with any replacement lease executed in accordance with the terms of this Agreement with respect to the Texas Ten Portfolio, leased pursuant to the Replacement Texas Ten Lease, only for two (2) full quarters, by multiplying the results for the prior two (2) quarters by two (2); or if such Real Estate has been owned, or with respect to the Texas Ten Portfolio, leased pursuant to the Replacement Texas Ten Lease, for three (3) full quarters, by multiplying the results for the previous three (3) quarters by 4/3), and the first quarter in the calculation shall be the first full quarter of ownership or lease pursuant to the Replacement Texas Ten Lease, as applicable. Notwithstanding the foregoing, any space described payment received with respect to the real estate included in the Texas Ten Portfolio prior to the effectiveness of the Replacement Texas Ten Lease and not paid pursuant to the Replacement Texas Ten Lease shall not be included in the calculation of Net Operating Income. Notwithstanding the foregoing and for the avoidance of doubt, no payment of deferred rent or reserves relating to the Fundamental Rent Deferment or interest payable with respect thereto shall be included in Net Operating Income. In the instance that the Borrower or a Subsidiary Guarantor has not owned a Borrowing Base Property for at least one (d1) above. quarter, the historic Net Operating Income shall be calculated based on used. To the immediately preceding calendar quarter unless extent that the Real Estate has not been owned by the Parent Borrower or its Subsidiaries for the entirety of such calendar quarter, in which event historic Net Operating Income shall is not available for any reason, Borrower may prepare a pro forma of Net Operating Income to be grossed up used for one (1) quarter until actual results for such ownership periodquarter are available, such proforma to be approved by Agent.

Net Operating Income. For any income producing Real Estate and for a given period, the difference between (a) any rentals, proceeds and other income received from such property during the determination period (excluding straight-line rents and FAS 141 accruals and similar adjustments), less (b) an amount equal to all costs and expenses (excluding Interest Expense, Taxes, depreciation and amortization expense, and any expenditures that are capitalized in accordance with GAAP) incurred as a result of, or in connection with, or properly allocated to, the operation or leasing of such property during the determination period (other than asset management fees); less (c) the Capital Expenditure Reserve; less (d) all rents, common area reimbursements and other income for such Real Estate received with respect to leases as to which (i) the tenant or any guarantor thereunder is subject to any bankruptcy, reorganization, insolvency, dissolution, liquidation or similar debtor relief proceeding, unless such tenant has expressly assumed its obligations under the applicable lease in such proceeding, (ii) the tenant which has exercised any termination option or otherwise not renewed its lease with a termination date within three months of the subject quarter end, and/or (iii) with respect to any guarantor subject to any bankruptcy, reorganization, insolvency, dissolution, liquidation or similar debtor relief proceeding, unless such guarantor is replaced by a credit worthy guarantor reasonably capable of performing the guarantor’s obligation and in the case of any lease in excess of 5,000 square feet such replacement guarantor shall be reasonably acceptable to Agent, plus (e) projected rentals in connection with any replacement lease executed in accordance with the terms of this Agreement with respect to any space described in (d) above. Net Operating Income shall be calculated based on the immediately preceding calendar quarter unless the Real Estate has not been owned by the Parent Borrower or its Subsidiaries for the entirety of such calendar quarter, in which event Net Operating Income shall be grossed up for such ownership period. Non Excluded Taxes. See §4.4(b).

Net Operating Income. For any income producing Real Estate Borrowing Base Property and for a given period, the difference between (a) any rentals, proceeds and other income received from such property during the determination period (excluding straight-line rents and FAS 141 accruals and similar adjustments), less (b) an amount equal to all costs and expenses the sum of (excluding Interest Expensea) the rents, Taxes, depreciation and amortization expensecommon area reimbursements, and any expenditures that service and other income for such Real Estate for such period collected or received (or with respect to reimbursements from Tenants which are capitalized not in default of their Leases for common area expenses, taxes and insurance, accrued in accordance with GAAP) incurred in the ordinary course of business from tenants or licensees paying rent (excluding pre-paid rents and revenues and security deposits (except to the extent applied in satisfaction of tenants’ obligation for rent) and any non-recurring fees, charges or amounts including, without limitation, termination fees, but including any deposits made by Tenants for such period with respect to property taxes that will be paid in arrears) specifically excluding, however, (i) all equity contributions, (ii) all Loan proceeds, (iii) all insurance proceeds (except for rent loss insurance proceeds), (iv) all condemnation awards, (v) all receipts derived from the sale of any capital asset with respect to such Real Estate, (vi) all rents and/or other income derived from any Lease which is entered into by the Borrower or any Subsidiary Guarantor, as a result oflandlord, with any Borrower, Subsidiary Guarantor, or any Affiliate or Subsidiary of the Borrower or any Subsidiary Guarantor, as tenant, minus (b) all expenses paid or accrued (including taxes for such period not yet due and payable) by Borrower and related to the ownership, operation or maintenance of such Real Estate for such period, including, but not limited to, taxes, assessments and the like, insurance, utilities, payroll costs, maintenance, repair and landscaping expenses, marketing expenses, and general and administrative expenses (including an appropriate allocation for legal, accounting, advertising, marketing and other expenses incurred in connection withwith such Real Estate, or properly allocated tobut specifically excluding general overhead expenses of REIT and its Subsidiaries, the operation or leasing of such any property during the determination period (other than asset management feesfees and non recurring charges); less , minus (c) the Capital Expenditure Reserve; less actual property management expenses of such Real Estate, minus (d) all rents, common area reimbursements and other income for such Real Estate received from tenants or licensees in default of payment or other material obligations under their lease for thirty (30) days or more, or with respect to leases as to which (i) the tenant or licensee or any guarantor thereunder is subject to any bankruptcy, reorganization, arrangement, insolvency, readjustment of debt, dissolution, liquidation or similar debtor relief proceedingproceeding (and that, unless such tenant has expressly with respect to tenants in bankruptcy, have not unconditionally and finally affirmed or assumed its obligations under the applicable their lease in such bankruptcy proceeding), (ii) the tenant which has exercised any termination option or otherwise not renewed its lease with a termination date within three months of the subject quarter end, and/or (iii) with respect to any guarantor subject to any bankruptcy, reorganization, insolvency, dissolution, liquidation or similar debtor relief proceeding, unless such guarantor is replaced by a credit worthy guarantor reasonably capable of performing the guarantor’s obligation and in the case of any lease in excess of 5,000 square feet such replacement guarantor shall be reasonably acceptable to Agent, plus minus (e) projected rentals in connection with any replacement lease executed in accordance with a capital reserve of $0.05 per square foot of the terms improvements on such Real Estate; provided, however, that straight line leveling adjustments required under GAAP and amortization of this Agreement with respect intangibles pursuant to any space described in (d) above. Accounting Standards Codification Topic 805 shall be excluded from Net Operating Income shall be calculated based on the immediately preceding calendar quarter unless the Real Estate has Income. Non-Consenting Lender. See §18.8. Non-Defaulting Lender. At any time, any Lender that is not been owned by the Parent Borrower or its Subsidiaries for the entirety of a Defaulting Lender at such calendar quarter, in which event Net Operating Income shall be grossed up for such ownership periodtime.

Net Operating Income. For any income producing Real Estate and for a given period, an amount equal to the difference between sum of (a) the gross revenues from the ownership and/or operation of such Real Estate for such period received in the ordinary course of business from tenants paying rent (excluding pre-paid rents and revenues and security deposits except to the extent applied in satisfaction of tenants’ obligations for rent and any rentalsnon-recurring fees, proceeds charges or amounts) minus (b) all expenses paid or accrued and related to the ownership, operation or maintenance of such Real Estate for such period, including, but not limited to, taxes, assessments and the like, insurance, utilities, payroll costs, maintenance, repair and landscaping expenses, marketing expenses, and general and administrative expenses (including an appropriate allocation for legal, accounting, advertising, marketing and other income received from expenses incurred in connection with such Real Estate, but specifically excluding general overhead expenses of REIT and its Subsidiaries, any property during the determination period (excluding straight-line rents and FAS 141 accruals and similar adjustmentsmanagement fees, in each case, in connection with such Real Estate), less minus (bc) the greater of (i) actual property management expenses of such Real Estate, and (ii) an amount equal to all costs and expenses five percent (excluding Interest Expense, Taxes, depreciation and amortization expense, and any expenditures 5%) (or three percent (3%) with respect to an MOB) of the gross revenues from such Real Estate (provided that are capitalized in accordance with GAAP) incurred as if a result of, or in connection with, or properly allocated to, the operation or leasing of such property during the determination period Mortgaged Property (other than asset an MOB) is fully leased under a single triple net lease or Operators’ Agreement, no management fees); less fee for such Mortgaged Property shall be deducted pursuant to clause (c) the Capital Expenditure Reserve; less of this definition when calculating Net Operating Income), minus (d) all rents, common area reimbursements and other income for such Real Estate received from tenants in default of payment for a period in excess of thirty (30) days beyond the due date or other material obligations under their Lease for a period in excess of thirty (30) days, or with respect to leases Leases as to which (i) the tenant or any guarantor thereunder is subject to any bankruptcyInsolvency Event; provided, reorganizationhowever, insolvencythat straight line leveling adjustments required under GAAP and amortization of deferred market rent into income pursuant to FAS 141 shall be excluded from the calculation of Net Operating Income. Such Person’s Equity Percentage in the Real Estate referred to above of its Unconsolidated Affiliates shall, dissolutionas applicable, liquidation be included in the determination of Net Operating Income. For the avoidance of doubt, in any case in which a Seniors Housing Leased Asset is leased by a Borrower or similar debtor relief proceedingSubsidiary Guarantor to an unaffiliated third party, unless Net Operating Income shall be the rent paid to Borrower and such tenant has expressly assumed its obligations Subsidiary Guarantor under such lease for the applicable lease in such proceedingperiod net of any applicable expenses. In the event that a Mortgaged Property is owned by Borrower or a Subsidiary Guarantor and operated under a RIDEA structure, (ii) the tenant which has exercised any termination option or otherwise not renewed its lease with a termination date within three months Net Operating Income of the subject quarter end, and/or (iii) with respect to any guarantor subject to any bankruptcy, reorganization, insolvency, dissolution, liquidation or similar debtor relief proceeding, unless such guarantor is replaced by a credit worthy guarantor reasonably capable of performing the guarantor’s obligation and in the case of any lease in excess of 5,000 square feet such replacement guarantor Operator shall be reasonably acceptable to Agent, plus (e) projected rentals in connection with any replacement lease executed in accordance with the terms of this Agreement with respect to any space described in (d) aboveapplicable Net Operating Income used for the purposes hereof. Net Operating Income shall be calculated based on the immediately preceding calendar upon a trailing two (2) quarter unless the Real Estate has not basis (annualized). For any Mortgaged Properties that have been owned by for less than two (2) full quarters, such calculation shall be based on a trailing one (1) quarter basis (annualized to a two (2) quarter basis) building until a trailing two (2) quarter basis is achieved. For any and all Mortgaged Properties acquired during the Parent Borrower or its Subsidiaries for month that is the entirety subject of such calendar quarterthe calculation and which do not have historical Net Operating Income, in which event Net Operating Income shall be grossed up for calculated on a pro forma rolling quarterly basis (annualized to a two (2) quarter basis), as approved by Agent (that is, determined on a pro forma basis as if such ownership periodReal Estate was owned on the first day of said quarter prior to multiplying the results of said quarter), beginning with the quarter that is the subject of the calculation. Any variation of the foregoing must be approved by the Required Lenders.

Net Operating Income. For any income producing Real Estate and for a given period, the difference between (a) Gross Income from Operations the sum of: (i) rent payments made under the Operating Leases received by or on behalf of the Borrower or any rentalsRestricted Subsidiary of the Borrower (ii) that portion of all income and proceeds (whether in cash or on credit, and computed on an accrual basis) received by the Borrower, any of the Restricted Subsidiaries or by the Manager on behalf of the Borrower and the Restricted Subsidiaries, for the use, occupancy or enjoyment, or license to use, occupy or enjoy the Properties, or any part thereof, or received 11 Excluding (i) Indebtedness in respect of letters of credit, except to the extent of unreimbursed amounts thereunder; provided that any unreimbursed amounts under commercial letters of credit shall not be counted until three Business Days after such amount is undrawn and (ii) Indebtedness of Unrestricted Subsidiaries; it being understood, for the avoidance of doubt, that obligations under Swap Contracts do not constitute Consolidated Total Debt. by the Borrower, any of the Restricted Subsidiaries or by the Manager on behalf of the Borrower or any of the Restricted Subsidiaries for the sale of any goods, services or other items sold on or provided from the Properties in the ordinary course of the operation of the Properties, including, without limitation: (A) all income and proceeds received from rental of rooms, Leases and commercial space, meeting, conference and/or banquet space within the Properties, if any, including parking revenue (B) all income and proceeds received from food and beverage operations and from catering services conducted from the Properties, if any, even though rendered outside of the Properties (C) all income and proceeds from business interruption, rental interruption and use and occupancy insurance with respect to the operation of the Properties (after deducting therefrom all necessary costs and expenses incurred in the adjustment or collection thereof) (D) all Awards for temporary use (after deducting therefrom all costs incurred in the adjustment or collection thereof and in Restoration of the Properties) (E) all income and proceeds from judgments, settlements and other resolutions of disputes with respect to matters which would be includable in the definition of “Gross Income from Property Operations” if received in the ordinary course of the operation of the Properties (after deducting therefrom all necessary costs and expenses incurred in the adjustment or collection thereof) (F) interest on credit accounts, rent concessions or credits, and other required pass-throughs (G) all other income from operation of the Properties, including, without limitation, laundry and vending income (1) gross receipts received from such property during the determination period by lessees (excluding straight-line rents and FAS 141 accruals and similar adjustmentsother than Operating Lessee), less licensees or concessionaires of the Properties (2) consideration received at the Properties for hotel accommodations, goods and services to be provided at other hotels not constituting directly or indirectly, a portion of the Properties, although arranged by, for or on behalf of the Borrower or any of the Restricted Subsidiaries or the Manager (3) income and proceeds from the sale or other disposition of goods, capital assets and other items not in the ordinary course of operation of the Properties (4) Hotel Taxes (5) Awards (except to the extent provided in clause (D) above) (6) refunds of amounts not included in Property Operating Expenses at any time and uncollectible accounts (7) gratuities collected by the employees at the Properties (8) the proceeds of any permitted financing (9) other income or proceeds resulting other than from the use or occupancy of the Properties, or any part thereof, or other than from the sale of goods, services or other items sold on or provided from the Properties in the ordinary course of business (10) any credits or refunds made to customers, guests or patrons in the form of allowances or adjustments to previously recorded revenues (11) rent payments made and received under the Operating Leases (12) proceeds from the sale of any of the Properties, including Net Proceeds from Dispositions Gross Income from Operations (b) an amount equal to Operating Expenses the sum, without duplication, of the portion paid by or on behalf of the Borrower or any Restricted Subsidiary of the Borrower of all costs and expenses (excluding Interest Expenseof operating, Taxesmaintaining, depreciation directing, managing and amortization expense, and any expenditures that are capitalized in accordance with GAAP) incurred as a result ofsupervising the Properties12, or in connection withas otherwise specifically provided therein, which are properly attributable to the period under consideration under the Borrower or properly allocated toany Restricted Subsidiary’s and/or Manager’s system of accounting, the operation or leasing of such property during the determination period (other than asset management fees); less (c) the Capital Expenditure Reserve; less (d) all rentsincluding, common area reimbursements and other income for such Real Estate received with respect to leases as to which without limitation: 13 (i) the tenant cost of all food and beverages sold or consumed, if any, and of all necessary chinaware, glassware, linens, flatware, uniforms, utensils and other items of a similar nature, if any, including such items bearing the name or identifying characteristics of the hotels as the Borrower or any guarantor thereunder is subject to any bankruptcyRestricted Subsidiary, reorganizationOperating Lessee and/or Manager shall reasonably consider appropriate (“Operating Equipment”) and paper supplies, insolvency, dissolution, liquidation or cleaning materials and similar debtor relief proceeding, unless such tenant has expressly assumed its obligations under the applicable lease consumable items (“Operating Supplies”) placed in such proceeding, use (other than reserve stocks thereof in storerooms)14 (ii) the tenant which has exercised any termination option or otherwise not renewed its lease with a termination date within three months salaries and wages of personnel of the subject quarter endProperties (regardless of whether such personnel are employees of the Borrower or any Restricted Subsidiary or Manager), and/or including costs of payroll taxes and employee benefits (iii) with respect to any guarantor subject to any bankruptcywhich benefits may include, reorganizationwithout limitation, insolvencya pension plan, dissolutionmedical insurance, liquidation or similar debtor relief proceeding, unless such guarantor is replaced by a credit worthy guarantor reasonably capable of performing the guarantor’s obligation and in the case of any lease in excess of 5,000 square feet such replacement guarantor shall be reasonably acceptable to Agent, plus (e) projected rentals in connection with any replacement lease executed in accordance with the terms of this Agreement with respect to any space described in (d) above. Net Operating Income shall be calculated based on the immediately preceding calendar quarter unless the Real Estate has not been owned 12 Incurred by the Parent Borrower or its Subsidiaries any Restricted Subsidiary (or by the Manager on behalf of Operating Lessee pursuant to a Management Agreement, for the entirety account of such calendar quarter, in which event Net Operating Income shall be grossed up for such ownership periodthe Borrower or any Restricted Subsidiary).