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amended and in effect from time to time(all of the foregoing,collectively, the ("HOME Program Regulations"). G. As a condition of the Loan, the Borrower will execute and the City will cause to be recorded the Regulatory Agreement which will restrict occupancy of the Project to eligible households at affordable rents to households whose income is fifty percent(50%)or less of the area median income for the County of Alameda, adjusted for household size, as determined by HUD ("Very Low-Income Households"). H. Borrower intends to finance the remaining Project with Neighborhood Stabilization Program ("NSPI") funds ("NSPI Funds") from HUD pursuant to Title Ill of Division B of the Housing and Economic Recovery Act of 2008. NOW THEREFORE, IN CONSIDERATION of the mutual agreements, obligations, and representations, and in further consideration for the making of the Loan, the Borrower and City hereby agree as follows: ARTICLE I LOAN TERMS 1.0 Loan. The City agrees to loan to Borrower,and the Borrower agrees to borrow from and repay to City, an amount not to exceed One Hundred Thousand Dollars($100,000), subject to the terms and conditions of this Agreement. The Loan shall be evidenced by a promissory note executed by Borrower substantially in the form attached hereto as Exhibit C (the "Note") bearing simple interest at the rate of three percent (3%) per annum with a term of fifty-five(55)years, and will be secured by a deed of trust substantially in the form attached hereto as Exhibit D(the"Deed of Trust") which will be recorded in the official records of Alameda County against the Property prior to any disbursements hereunder. This Agreement,the Regulatory Agreement,the Note and the Deed of Trust are collectively referred to in this Agreement as the "Loan Documents." 1.1 Payment Dates; Maturity Date. Annual payments on the outstanding principal balance of the Note shall be payable on a residual receipts basis with fifty percent (50%) of all Surplus Cash(defined below)payable to City toward principal and accrued interest,subject however to Section 1.2 below. Payments shall be credited first to any unpaid late charges and other costs and fees then due,then to accrued interest,and then to principal. In no event shall any amount due under the Note become subject to any rights, offset, deduction or counterclaim on the part of Borrower. The entire outstanding principal balance of the Note,together with interest accrued thereon and any other sums accrued hereunder 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 upon which the City issues a final certificate of occupancy for the Project, or(ii)the fifty-ninth(59th) anniversary of the date hereof. 1.2 Annual Payments From Surplus Cash. By no later than June I of each year following the issuance of a final certificate of occupancy or equivalent for the Project, Borrower shall pay to City fifty percent (50%) of all Surplus Cash generated by the Project during the previous calendar year to reduce the indebtedness owed under the Note. Notwithstanding the foregoing, ifother public agency lenders provide Project financing that requires repayment from residual receipts or surplus cash,then City shall share fifty percent(50%)of the Surplus Cash with such other public agencies in 2220130.1 Page 2