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415111 <br />1. City Loan. The City agrees to lend to Borrower, and Borrower agrees to <br />borrow from the City, the Note Amount, with interest as provided in Section 4(a) of this <br />Agreement, subject to the conditions and restrictions set forth in this Agreement, in the <br />Promissory Note, the Affordability Covenants and Restrictions, and in the City Deed of <br />Trust. When all conditions to the close of escrow other than payment of the Purchase <br />Price have been satisfied, the City shall deposit the Loan Amount into escrow. The City <br />shall direct the Escrow Agent to apply the proceeds of the City Loan on behalf of <br />Borrower to the Purchase Price of the Property and related soft costs. Borrower shall <br />execute and deliver to the Escrow Agent the Promissory Note, the City Deed of Trust and <br />the Affordability Covenants and Restrictions. <br />2. Authorized _Use _of_City _Loan. The City Loan proceeds may be used for <br />the purchase of the foreclosed Property, as well as pre -approved reasonable soft costs <br />related to such purchase. <br />3. Loan Repayment. Borrower shall make payments to the City as provided <br />in Sections 5 (Residual Receipts), 6 (Refinancing Proceeds), 7 (Sale Proceeds) and 8 <br />(Accelerated Loan Repayment). <br />4. Operating Capital Improvement Loan. <br />If the replacement reserve account ("reserves") is depleted due to unforeseen <br />repairs and the General Partner makes a loan to the Partnership, the reserves must be fully <br />funded prior to payment of said loan. Such loan shall be repaid with the Partnership <br />share of the Residual Receipts. The outstanding loan balance will be reflected in the <br />annual report. <br />5. Annual Loan Repayment/ Residual Receipts. <br />a. The Borrower shall thereafter make a loan payment to the City annually, in <br />the amount of the lesser of the outstanding balance due under this Note or the City's <br />Percentage of the Residual Receipts, as provided in this Section 5. <br />b. Within one hundred fifty (150) days after the close of the initial Calendar <br />Year following the Issuance of the Certificate of Occupancy and on or before the 150th <br />day of each Calendar Year thereafter, the Borrower shall submit to the City an audited <br />financial statement of Gross Revenues and Operating Expenses attributable to the <br />Property for the applicable Calendar Year, along with a computation of the Residual <br />Receipts due to the City for the Calendar Year. <br />c. Except as otherwise provided, the Borrower shall pay to the City 50 percent <br />of the Residual Receipts. Fifty percent (50%) of the Residual Receipts shall remain with <br />the Borrower. <br />Page 3 of 14 <br />