KOTTINGER GARDENS PHASE 1 - AFFORDABLE HOUSING LOAN AGMT

3.2 Costs of Closing and Escrow. Developer shall pay all title insurance premiums for policies Developer elects to purchase in connection with Developer's acquisition of a leasehold interest in the Property and the financing of the Project. Developer shall pay, or cause to be paid,all recording fees,transfer taxes, escrow fees and closing costs incurred in connection with the acquisition of a leasehold interest in the Property and the financing of the Project. Developer shall pay for the cost of any lender's policy of title insurance that City elects to acquire in connection with the transactions contemplated hereby. City and Developer shall provide Escrow Agent with a copy of this Agreement, which together with such supplemental instructions as City or Developer may provide and which are consistent with the intent of this Agreement or which are otherwise mutually agreed upon by City and Developer, shall serve as escrow instructions for the Closing. 3.3 Closing. The Closing Date shall be a date that is mutually acceptable to the Parties. Prior to the Close of Escrow, Developer shall deposit into escrow the City Documents to which Developer is a party, executed and acknowledged as applicable, and Developer's share of closing costs. Provided that all conditions precedent to Close of Escrow have been satisfied or waived, City shall deposit into escrow executed copies of the City Documents to which City is a party. On the Closing Date the Escrow Agent shall cause the Memorandum, the Regulatory Agreement, the Deed of Trust and the City HOME Deed of Trust to be recorded in the Official Records. ARTICLE IV CITY FINANCIAL ASSISTANCE 4.1 Loan and Note; Predevelopment Loans. 4.1.1 HOME Loan. Pursuant to that certain HOME Investments Partnerships Program (HOME) Agreement dated as of October 24, 2014, and executed by and between City and MidPen (the"City HOME Loan Agreement"),the City has provided a loan to fund certain Project predevelopment expenses using HOME investment partnership funds in the amount of Four Hundred Fifty Thousand Dollars ($450,000) (the "City HOME Loan"). MidPen's obligation to repay the City HOME Loan is evidenced by that certain Promissory Note dated as of October 24, 2014, and executed by MidPen for the benefit of City(the"City HOME Note"). Pursuant to the Assignment and Assumption Agreement, Developer has assumed MidPen's rights and obligations under the City HOME Loan Agreement and the City HOME Note. As of the Effective Date, all of the proceeds of the City HOME Loan have been disbursed. At the Closing, Developer will execute the City HOME Deed of Trust which will be recorded against the Project and Developer's leasehold interest in the Property to secure repayment of the City HOME Loan. 4.1.2 Predevelopment Loan. Pursuant to the DDA,the City has provided a loan to MidPen using City Low-Income Housing Funds in the amount of Two Million, Eight Hundred Thousand Dollars ($2,800,000) (the "Predevelopment Loan")to fund certain Project predevelopment expenses and certain predevelopment expenses for Phase II. MidPen's obligation to repay the Predevelopment Loan is evidenced by a Predevelopment Promissory Note OAK#4822-6539-6013 v6 8