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4.1.3 Construction/Permanent Loan. In order to increase the affordability of the Project,the City has agreed to allow the outstanding principal balance of the Predevelopment Loan and the interest accrued thereon to be"rolled over" into a construction/permanent loan for the Project, and has agreed to loan the undisbursed balance of the Predevelopment Loan together with additional funds to Developer in the amount of[Twelve Million Six Hundred Forty-Four Thousand Dollars ($12,644,000)], upon the terms and conditions and for the purposes set forth in this Agreement. The total amount of the construction/permanent loan (the"Loan") shall be equal to: (a) [One Million, One Hundred Six Thousand Dollars ($1,106,000)] which is equal to the outstanding principal balance of the Predevelopment Note as of the date of this Note, (b) [ Dollars ($ )] which is equal to the interest accrued under the Predevelopment Note as of the date of this Note, and (c) [Twelve Million, Six Hundred Forty- Four Thousand Dollars($12,644,000)] which is equal to the sum of the undisbursed balance of the Predevelopment Note and the amount of additional funds to be loaned to Borrower pursuant to this Loan Agreement. The Loan shall be evidenced by the Note which shall be dated as of the Closing Date and executed by Developer substantially in the form attached hereto as Exhibit B. Provided that Developer has complied with all conditions precedent to disbursement of the Loan set forth in Sections 3.4, the remaining proceeds of the Loan("Loan Proceeds") shall be disbursed pursuant to approved draw requests as described in Section 4.6 (o). The Parties agree that City shall disburse the Loan Proceeds only for the purpose of funding Project construction and development costs. 4.2 Interest Rate; Payment Dates; Cost Savings; Maturity Date. The principal balance of the Note outstanding from time to time will bear interest at a rate equal to [three percent(3%) simple annual interest] commencing upon the date of disbursement. Annual payments shall be due and payable on a residual receipts basis in accordance with the formula set forth in the Note commencing upon City's issuance of a final certificate of occupancy or equivalent for the Project. The entire outstanding principal balance of the Loan together with accrued interest and all other sums due under the City Documents shall be payable in full on the date (the"Maturity Date") which is the earlier of(i)the fifty-fifth (55th) anniversary of the date of issuance of the final certificate of occupancy or equivalent for the Project, or(ii)the fifty- seventh (57th) anniversary of the Loan origination date. Notwithstanding the foregoing, the 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. The Parties acknowledge that Developer intends to apply for an award under the Affordable Housing Program (AHP) of approximately$1,300,000 for Project construction financing, and the Parties agree that if Developer obtains AHP funds for the Project, 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 OAK#4822-6539-6013 v3 9