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refuse removal, certificates, permits and licenses, sewer charges, real and personal property
<br />taxes, assessments, insurance, security, advertising and promotion, janitorial services, cleaning
<br />and building supplies, purchase, repair, servicing and installation of appliances, equipment,
<br />fixtures and furnishings, fees and expenses of property management, fees and expenses of
<br />accountants, attorneys and other professionals, the cost of social services and other housing
<br />supportive services provided at the Project consistent with Developer's approved Tax Credit
<br />Applications to TCAC for Phase R repayment of any completion or operating loans made
<br />to Developer, and other actual, reasonable and customary operating costs and capital costs which
<br />are directly incurred and paid by Developer, but which are not paid from or eligible to be paid
<br />from the Capital Replacement Reserve or any other reserve accounts for the applicable Phase.
<br />To the extent the Operating Expenses for a Phase are not reasonably consistent with the annual
<br />Operating Budget for a given year, the Agency Executive Director shall reasonably review and
<br />approve to confirm such Operating Expenses are reasonable and actually incurred; provided, no
<br />approval shall be required for emergency expenditures reasonably necessary or appropriate to
<br />preserve life, limb, or property.
<br />Operating Expenses shall exclude all of the following: (i) salaries of employees
<br />of Developer or Developer's general overhead expenses, or expenses, costs and fees paid to an
<br />Affiliate of Developer, to the extent any of the foregoing exceed the expenses, costs or fees that
<br />would be payable in a bona fide arms' length transaction between unrelated parties in the Orange
<br />County area for the same work or services; (ii) any amounts paid directly by a tenant of the
<br />Rental Portion of the Project to a third party in connection with expenses which, if incurred by
<br />Developer, would be Operating Expenses; (iii) optional or elective payments with respect to
<br />financing approval pursuant to Section 316.1 of the Agreement (the "Primary Loan") (unless
<br />made with the consent of the Executive Director in her reasonable discretion); (iv) expenses,
<br />expenditures, and charges of any nature whatsoever arising or incurred by Developer prior to
<br />completion of the applicable Phase of the Rental Portion of the Project with respect to the
<br />development, maintenance and upkeep of the applicable Phase of the Rental Portion of the
<br />Project, or any portion thereof, including, without limitation, all costs and capitalized expenses
<br />incurred by Developer in connection with the acquisition of the Site from the Agency (e.g. not
<br />leasing to low income tenants), all predevelopment and preconstruction activities conducted by
<br />Developer in connection with the Rental Portion of the Project, including, without limitation, the
<br />preparation of all plans and the performance of any tests, studies, investigations or other work,
<br />and the construction of the Rental Portion of the Project and any on-site or off-site work in
<br />connection therewith; (vi) depreciation, amortization, and accrued principal and interest expense
<br />on deferred payment debt; and (vii) any Partnership Related Fees to the extent they are not paid
<br />as capitalized expenses.
<br />"Partnership Agreement" means the partnership agreement between the
<br />Developer and the Investor Limited Partner.
<br />"Partnership Related Fees" shall mean the fallowing fees of each Developer
<br />entity, or partners thereof pursuant to the Partnership Agreement, which are actually paid:
<br />(i) a general partner(s) (administrative and/or managing partner(s))
<br />partnership management fee payable to the general partner(s) in a cumulative amount not to
<br />D OCSOC/1400673v 14/200272.0001
<br />ATTACHMENT NO. 8B-3
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