Agmt 2009 Alameda Housing Associates LP

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4. l .3 Construction/Permanent Loan_ The Agency's construction/permanent loan for the Project (the "Loan") shall be evidenced by a Secured Promissory Note in the amount of the Agency Funds (the "Note")dated as of the closing date for the Loan (the "Closing Date") and executed by Developer substantially in the form attached hereto as Exhibit E-2. The Note shall be secured by a Leasehold Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing (the "Deed of Trust")~ executed by Developer as Trustor for the benefit of Agency substantially in the form attached hereto as Exhibit F_ and recorded against Developer's leasehold interest in the Property. Provided that Developer has complied with all conditions precedent to disbursement of the Loan set forth in Section 4.5.2, the proceeds of the Loan ("Loan Proceeds") shall be disbursed in accordance with Section 4.4 hereof. Developer shall be permitted to use the Loan Proceeds only for the purposes set forth in Section 4.4. 42 Interest Rate; Payment Dates; Maturity Date. The outstanding principal balance of the Note will bear interest at three percent (3%) simple annual interest commencing upon the date of disbursement. Annua] payments shall be due and payable on a residual receipts basis in accordance with the formula set forth in the Note. The entire outstanding principal balance of the Loan together with accrued interest and all other sums due under the Agency Documents shall be payable in full on the earliest of: (i) the fifty-fifth (55"') anniversary of the date of issuance of the final certificate of occupancy for the Project, (ii) the fifty-seventh (57a') anniversary of the Loan origination date, and (iii) the date upon which the Ground Lease terminates; provided however, if Developer obtains NIIIP financing for the Project, the maturity date of the Note will be extended to the date of the expiration of the term of the MI~P financing. Notwithstanding the foregoing, the Agency shall have the right to accelerate the maturity date and declare all sums payable under the Note immediately due and payable upon the occurrence of an Event of Developer Default, including without limitation, Developer's failure to commence or complete construction of the Project within the times periods specified in Section 3.8. 43 Security. As security for repayment of the Note, Developer shall execute the Deed of Trust in favor of Agency as beneficiary pursuant to which Agency shall be provided a lien against Developer's interest in the Property and the Improvements. The Deed of Trust shall be dated as of the Closing Date, shall be substantially in the form attached hereto as Exhibit F, and shall be recorded in the Official Records on the Closing Date. The Deed ofTrust may be subordinated only to the Permitted Exceptions. Developer acknow]edges that the Deed of Trust will secure Developer's performance of Developer's obligations pursuant to this Agreement and the F~egulatory Agreement which may survive repayment of the Note, and that the Deed of Trust shall not be reconveyed prior to Developer's satisfaction of such obligations. Developer agrees that for so long as the Loan remains outstanding, the fee title to the Property shall not merge with the leasehold interest in the Ground Lease, notwithstanding any union of such estates in the fee owner of the Property, Developer, or any third party. Developer agrees that if Developer becomes the fee owner of the Property, the Deed of Trust shall automatically be a lien on the fee interest in the Property. 4.4 Use and Disbursement of Proceeds. The Loan Proceeds shall be used solely to fund specific development activities associated with the Project (in an amount and for only such development activities as are approved for funding by the Agency) and to fund construction of l 178986-8 17