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7. City/HOME Loan Repayment from Refinancing Proceeds. The Borrower shall make a City /HOME Loan payment to the City from every Refinancing that occurs during the term of this Note not to exceed the outstanding balance of principal and interest on this Note, to the extent of the City's Percentage of the Refinancing Proceeds (if any), as follows: the cash proceeds from such Refinancing shall be applied first to pay Closing Costs; next, the amount necessary to pay in full the balance remaining on the Senior Loan; next, the Borrower shall pay to the City fifty percent (50 %) of the Refinancing Proceeds ( "City's Percentage of the Refinancing Proceeds ") to the extent of the outstanding balance on this Note. The remaining Refinancing proceeds shall remain with Borrower. Such payment shall be due on the date of such Refinancing, and shall be applied first to any accrued but unpaid interest, then to reduce the principal balance of the City /HOME Loan. The City shall not be required to reconvey the lien of the City /HOME Loan Deed of Trust if Refinancing Proceeds are insufficient to repay the City /HOME Loan in full. While any amounts owing under the Agency Loan remain unpaid, the City's Percentage of the Refinancing Proceeds shall be allocated between repayment of this Note and the Agency Loan Note in the same manner as the City's Percentage of Residual Receipts as described in Section 5.c. 8. City/HOME Loan Repayment from Sale Proceeds. The Borrower shall make a City /HOME Loan payment, not to exceed the outstanding balance of principal and interest on this Note, to the City from any Sale that occurs during the term of the City /HOME Loan, to the extent of the City's Percentage of the Sale Proceeds, as follows: gross sale proceeds are applied first to pay Closing Costs, next to pay in full the balance remaining on the Senior Loan; next the Borrower shall pay to the City fifty percent (50 %) of the total Sale Proceeds ( "City's Percentage of the Sale Proceeds "), not to exceed the outstanding amount of principal and interest due on this Note. This fifty percent (50 %) represents the total payment due under this Note with respect to the applicable Sale. The remaining Sale Proceeds shall remain with Borrower. Such payment shall be due on the date of such Sale, and shall be applied first to any accrued but unpaid interest, then to reduce the principal balance of the City/HOME Loan. The City shall not be required to reconvey the lien of the City /HOME Deed of Trust if Sale Proceeds are insufficient to repay the City /HOME Loan in full. While any amounts owing under the Agency Loan remain unpaid, the City's Percentage of the Sale Proceeds shall be allocated between repayment of this Note and the Agency Loan Note in the same manner as the City's Percentage of Residual Receipts as described in Section 5.c. 9. Buy Out Option. In the event that there is a decision to sell the Property, the Goodwill Special Limited Partner of Borrower shall be given the first right of refusal or the General Partner may exercise the purchase option pursuant to the Borrower's Partnership Agreement (and any amendments thereto). If neither of these options or the right of first refusal are exercised by the Goodwill Special Limited Partner or the General Partner of Borrower, then the City shall have the second right of refusal, subject to the terms and conditions of Section 42(i)(7) of the Internal Revenue Code. Such provisions shall be included in the Partnership Agreement. D -5 DOCSOC/1 47522 1 v10/200272 -0004