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4. Reserved. <br />5. Annual City/HOME Loan Renavment. <br />a. Borrower shall make aCity/HOME Loan payment to the City annually, in the <br />amount of the lesser of the outstanding balance due under this Note or the City's Percentage of <br />Residual Receipts, as provided in this Section 5. <br />b. Within one hundred twenty (120) days after the close of the initial Calendar Year <br />following the year the Project is placed-in-service and on or before the 120th day of each Calendar <br />Year thereafter, the Borrower shall submit to the City audited financial statements including a <br />detailed statement of Gross Revenues and Operating Expenses attributable to the Property for the <br />applicable Calendar Year, along with a computation of the amount of the Residual Receipts <br />applicable to such Calendar Year with which to make aCity/HOME Loan payment then due. <br />c. The Borrower shall pay to the City seventy-five percent (75%) of the Residual <br />Receipts ("City's Percentage of Residual Receipts") as payment of principal and interest under the <br />City/HOME Loan. The remaining twenty five percent (25%) of the Residual Receipts shall remain <br />with the Borrower. Pursuant to the Loan Agreement, the Borrower has also received a loan of tax <br />increment funds from the Agency in the original principal amount of $469,000 ("Agency Loan"). <br />The City's Percentage of Residual Receipts for each year shall be applied to repay the amounts <br />owing under this Note and the amounts owing under the Agency Loan, as follows: 24% of the City's <br />Percentage of Residual Receipts will be applied to repay the Agency Loan and 76% of the City's <br />Percentage of Residual Receipts will be applied to repay amounts owing under this Note. Upon <br />repayment in full of all amounts owing under the Agency Loan, the entire City's Percentage of <br />Residual Receipts shall be allocated to repayment of the amounts owing hereunder in accordance <br />with Section 13.a. hereof. <br />d. The Residual Receipts payment shall be made not later than one hundred fifty (150) <br />days after the close of the Calendar Year. <br />6. Reserved. <br />7. City/HOME Loan Renavment from Refinancing Proceeds. <br />The Borrower shall make aCity/HOME Loan payment to the City from every Refinancing <br />that occurs during the term of this Note not to exceed the outstanding balance of principal and <br />interest on this Note, to the extent of the City's Percentage of the Refinancing Proceeds (if any), as <br />follows: the cash proceeds from such Refinancing shall be applied first to pay Closing Costs; next, <br />the amount necessary to pay in full the balance remaining on the Senior Loan; next, the Borrower <br />shall pay to the City fifty percent (50%) of the Refinancing Proceeds ("City's Percentage of the <br />Refinancing Proceeds") to the extent of the outstanding balance on this Note. The remaining <br />Refinancing proceeds shall remain with Borrower. Such payment shall be due on the date of such <br />Refinancing, and shall be applied first to any accrued but unpaid interest, then to reduce the principal <br />balance of the City/HOME Loan. The City shall not be required to reconvey the lien of the <br />City/HOME Loan Deed of Trust if Refinancing Proceeds are insufficient to repay the City/HOME <br />Loan in full. While any amounts owing under the Agency Loan remain unpaid, the City's <br />Percentage of the Refinancing Proceeds shall be allocated between repayment of this Note and the <br />D-4 <br />DOCSOC/1475221 v5/200272-0004 <br />