WASHINGTON SANTA ANA HOUSING PARTNERS, L (2).P

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8. LOAN REPAYMENT FROM SALE PROCEEDS. The Borrower shall make a payment, not to exceed (i) the outstanding balance of principal and interest on this Note;. plus (ii) the amount of unpaid Agency Base Rent as outlined in the Ground Lease, to the City/Agency from any approved Sale of the leasehold interest that occurs during the term of the City Loan or the Ground Lease, to the extent of the City's Percentage (23.71 %) of the Sale Proceeds, as follows. The Sale Proceeds shall be calculated as follows: gross sale proceeds are applied first to pay Closing Costs, next to pay in full all amounts owing.on the Senior Loan; next the Borrower shall pay to the City the City's Percentage of the then remaining unapplied Sale Proceeds, not to exceed (i) the outstanding balance of principal and interest on this Note; plus (ii) theamount of unpaid Agency Base Rent as outlined in the Ground Lease. Such payment shall be due on the date of such Sale, and shall be applied at the City's sole discretion to either: (i) first to any accrued but unpaid interest, then to reduce the principal balance of the City Loan; or (ii) to the unpaid amount of Agency Base Rent as outlined in the Ground Lease. The City shall not be required to reconvey the lien of the City Deed of Trust if Sale Proceeds are insufficient to repay the City Loan in full. 9. BUY OUT OPTION. Prior to the initial disbursement under this Note, the Borrower shall grant to the City a right of first refusal (subject to any purchase option and/or right for first refusal granted to one or more of the General Partner(s) of the Borrower and any rights of the investor limited partner of Borrower under the Partnership Agreement) (the "City Right of First Refusal") to acquire the leasehold interest in the Property if Borrower desires to transfer the Property to an entity that is not affiliated with one or more of Borrower's general partners. The City Right of First Refusal shall be in form and substance acceptable to the City, shall comply with all applicable Tax Credit requirements and shall, at minimum, include that the purchase price will not be less than the amount of any bona fide third party offer received by Borrower. The City Right of First Refusal is hereby subordinated to the Senior Loan Deed of Trust and the other Senior Loan Documents, and in any event, the City Right of First Refusal shall automatically terminate, without any further action by Borrower, the City or any other party upon the initial disbursement under this Note. Senior Lender is hereby made a third party beneficiary of the immediately preceding sentence, and such sentence shall not be amended or deleted without Senior Lender's prior written consent: 10. ACCELERATED LOAN PAYMENT. The full principal amount outstanding plus accrued but unpaid interest thereon, shall be due and payable on the earlier to occur of the following: (a) Sale or Refinancing of the Property as provided further in Section 15 hereof; unless: (i) in the case of a Sale in which the City's Percentage of the Sale Proceeds are insufficient to repay in full the City Loan, the City approves such sale and the purchaser assumes the balance of the City Loan in accordance with the terms of this Note; or (ii) in the case of a Refinancing in which the City's Percentage of the Refinancing 7 The Crossroads at Washington City HOME Loan Note