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• <br /> 1 <br /> 10.4 Coverage Standard Compliance. For purposes of this section, <br /> "Coverage Standard Compliance"is the maintenance of an expense coverage ratio of 1.05 <br /> to 1.0 based on the operating cash flow of the Owner from the Property. The"expense <br /> coverage ratio"shall be calculated based on the gross cash receipts for a specified period <br /> divided by all cash expenditures incurred incident to the operation of Property during <br /> such period(including,without limitation, operating expenses and capital expenditures <br /> not paid from any reserves, equity, or development financing proceeds). For the <br /> purpose of this subsection,"gross cash receipts"means all cash received from the <br /> operations of the Property, including all government subsidies or other operational or <br /> rent subsidies due and payable at such time but not yet received by the Owner,but <br /> excluding member's capital contributions, loan proceeds,prepayment of rent, security <br /> deposits, insurance proceeds, condemnation awards,proceeds from sales or refinancing <br /> of the Owner's property, and any other funds not generated from current Property <br /> operations. By way of example: <br /> • If gross cash receipts are$110,000 and cash expenditures are <br /> $100,000,then the expense coverage ratio is 1.10 to 1.0 and <br /> Coverage Standard Compliance"is maintained. <br /> • If gross cash receipts are$90,000 and cash expenditures are <br /> $100,000,then the expense coverage ratio is 0.90 to 1.0 and <br /> Coverage Standard Compliance"is not maintained. <br /> 10.5 Adjustment Regarding Coverage Standard Compliance. The <br /> parties acknowledge that Coverage Standard Compliance in Section 10.4 is derived from <br /> requirements contained in the LLC Operating Agreement or in Owner's loan agreements <br /> for the Property. If such requirements are later amended as to lessen or eliminate such <br /> requirements,Owner shall give written notice to the City,and this Section 10 will be <br /> amended by the parties to reflect such amended requirements. <br /> 10.6 Substitute Plan Adjustment. The parties acknowledge that their <br /> intent is that the Property always be operated as close to the original Approved <br /> Management and Operations Plan as Coverage Standard Compliance will practically <br /> allow. Accordingly,if at any time when a Substitute Approved Management and <br /> 14 <br /> 76 <br />