1. Additional Interest.a. In addition to the interest provided under section [number] of this instrument, the mortgagor hereby agrees to pay to the mortgagee additional interest in quarterly installments on or before the last day of the month following the end of each calendar quarter, commencing [date] for the calendar quarter ending [date]. Such additional interest shall be an amount equal to [percent] of the net cash flow as defined in section [number] herein from the operation of the premises. Each quarterly installment shall be based on the net cash flow from the operation of the premises for the preceding calendar quarter.
b. Net cash flow is herein defined as the difference between the total gross receipts from the premises and the aggregate expenses of the premises. The total gross receipts from the premises shall include, but shall not be limited to, fixed or guaranteed rentals, percentage rentals, participation rentals, overage rentals, rentals from concessions, and garage rentals received by the mortgagor or other owner of the premises. The term aggregate expenses is herein defined as the total expense paid by the mortgagor or other owner of the premises for (1) principal and fixed interest as provided under section [number] of this instrument, (2) real estate taxes with respect to the premises, (3) total property and liability insurance premiums, (4) heating oil, water, and utility costs, (5) total unreimbursed expenses to prepare any part of the premises for occupancy by a tenant divided by the number of years in the term of the lease, not including renewal periods, (6) management expenses, and (7) building operating expenses including salaries, janitorial services, maintenance and repair costs, legal and accounting costs, and other reasonable operating expenses. The net cash flow shall include total gross receipts actually received during a calendar quarter and aggregate expenses actually paid during a calendar quarter, irrespective of the period to which any item of gross receipts or aggregate expense applies, except for semiannual or annual payments of insurance premiums, real estate taxes, and capitalized expenses of preparing the premises for occupancy by a tenant, which shall be computed on a pro rata basis each calendar quarter.
c. Each quarterly payment of additional interest shall be accompanied by an unaudited financial statement prepared by the mortgagor's chief financial officer or an independent accounting firm engaged by the mortgagor. Said financial statement shall reflect the net cash flow fromthe premises as defined in Paragraph 1(b).
d. The mortgagee shall have the right to examine the books and records of the mortgagor or other owner of the premises for the purpose of verifying the amounts of net cash flow reported by the mortgagor or other owner of the premises on the aforementioned unaudited financial statements. Such examinations shall be conducted by the mortgagee or any agent of the mortgagee during normal business hours at the office of the mortgagor or other owner of the premises in [city] or at such other place in [city] as may be designated by the mortgagor or other owner of the premises. The mortgagee hereby agrees to proved at least ten working days' notice for each examination and further agrees that there shall be no more than four examinations during any fiscal year. If an examination discloses either an overpayment or an underpayment of any installment of additional interest, the parties hereby agree to make reimbursement of the amount of the overpayment or underpayment within five days of the conclusion of the examination.
2. Final Additional Interest. a. In addition to the interest provided under section [number] and section [number] of this instrument, the parties hereby agree that upon maturity of this mortgage, whether on the due date for satisfaction, on the sale of the premises, or on prepayment by reason of refinancing, acceleration, or otherwise, there shall be due and payable an amount of final additional interest to be computed as hereinafter provided.
b. If maturity shall occur before the date that is five years after the date hereof, final additional interest shall be an amount equal to [percent] of the fair market value of the premises. c. If maturity shall occur on or after the date that is five years after the date hereof, final additional interest shall be an amount equal to [percent] of the fair market value of the premises.
d. Except in the case of a sale, the fair market value of the premises shall be determined by a real estate appraiser acceptable to both parties. If the parties are unable to agree on a real estate appraiser, each party shall select an appraiser who is a member in good standing of the American Institute of Real Estate Appraisers of the National Association of Real Estate Boards. In such an event, the fair market value shall be the average of the two appraisals. In the event of a sale of all or any portion of the premises, the fair market value shall be an amount equal to the total sales price of what was sold. For purposes of the determination of fair market value, the premises shall include all fixtures and personal property attached to or used in connection with the premises. The parties further agree that they shall each bear an equal portion of the cost of the appraisal or appraisals.
3. Interest Not to Exceed Legal Rate. The parties hereby agree that this instrument shall not be construed to charge interest at a rate in excess of the maximum rate of interest permitted to be charged under [applicable local law]. If interest in excess of said amount is paid hereunder, the parties hereby agree that the excess shall be returned to the mortgagor.
4. Parties Intend Debtor/Creditor Relationship. The parties hereby intend that the relationship created under this instrument be solely that of debtor and creditor. No part of this instrument shall be construed as creating at any time a partnership, joint venture, or any other equity interest in the premises for the mortgagee.
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