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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 (as described in the DDA)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. 4.3 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 this Agreement. (c) Default. 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. 4.5 Nonrecourse. Except as expressly provided in Section 3.9 of the Note,the Note shall be non-recourse to Developer. 4.6 Conditions to Closing and Disbursement of Loan Proceeds. City's obligation to fund the Loan and disburse the Loan Proceeds is conditioned upon the satisfaction of all of the requirements set forth in each subsection of this Section 4.6 unless any such condition is waived in writing by City acting in the discretion of City's Authorized Representative. (a) No Default. There shall exist no condition, event or act which would constitute a material breach or default under this Agreement or any other City Document, or which, upon the giving of notice or the passage of time, or both, would constitute such a material breach or default. (b) Representations. All representations and warranties of Developer contained herein or in any other City Document or certificate delivered in connection with the OAK#4822-6539-6013 v3 10