KOTTINGER GARDENS PHASE 1 - AFFORDABLE HOUSING LOAN AGMT

City shall have the right to accelerate the Maturity Date and declare all sums payable under the Note immediately due and payable upon the expiration of all applicable cure periods following the occurrence of an Event of Developer Default. 4.2.1 Affordable Housing Program (AHP) Funds; Excess Proceeds. Developer shall apply for an award under the Affordable Housing Program (AHP) of approximately $2,000,000 for Project construction financing, and the Parties agree that if Developer obtains AHP funds for the Project(the "AHP Loan"), the amount of the Loan shall be reduced by the total amount of the AHP funds obtained. If at the time Developer obtains such AHP funds, the amount of undisbursed Loan Proceeds is less than the AHP award, Developer shall pay to the City as a reduction of the outstanding principal balance of the Note, the amount equal to the difference between the total AHP award and the amount of undisbursed Loan Proceeds. In addition, within ten(10) business days after Developer's receipt of its investor limited partner's capital contribution following the issuance of the IRS Form 8609 for the Project, Developer shall pay to the City as a reduction of the outstanding principal balance of the Note, a one-time payment in the amount of Excess Proceeds as defined in, and in accordance with the Note. City agrees that it will make available as a loan for Phase II any portion of the Loan Proceeds that are not disbursed for the Project, any payment made to the City in accordance with this Section as a result of Developer's receipt of an AHP award, and any amount returned to City as Excess Proceeds pursuant to the Note. 4.2.2 Increase in Senior Loan. Due to a reduction in the anticipated interest rate for the Project's senior permanent loan,the amount of the Loan is Six Hundred Eighty-Three Thousand,Nine Hundred Thirty-Eight and 71/100 ($683,938.71) less than originally committed to the Project (the "Loan Savings Amount"). City agrees that it will make the Loan Savings Amount available as a loan for Phase II. 4.3 Security. As security for repayment of the Note, Developer shall execute the Deed of Trust in favor of City as beneficiary pursuant to which City shall be provided a lien against the Improvements and Developer's leasehold interest in the Property. The Deed of Trust shall be substantially in the form attached hereto as Exhibit C , and shall be recorded in the Official Records on the Closing Date. The Deed of Trust may be subordinated only to such liens and encumbrances consistent with the approved Financing Plan as City shall approve in writing. 4.4 Prepayment; Acceleration. (a) Prepayment. Developer shall have the right to prepay the Loan at any time and from time to time, without penalty or premium,provided that any prepayment of principal must be accompanied by interest accrued but unpaid to the date of prepayment. Prepayments shall be applied first to accrued but unpaid interest and then to principal. Any such prepayment shall have no effect upon Developer's obligations under the Regulatory Agreement which shall survive for the full term of the Regulatory Agreement. (b) Due On Transfer or Encumbrance. Unless City agrees otherwise in writing,the entire unpaid principal balance and all interest and other sums accrued under the Note shall be due and payable upon the Transfer absent the prior written consent of City of all or any part of or interest in the Property or the Project except as otherwise permitted pursuant to OAK#4822-6539-6013 v6 10