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ARTICLE 6. CITY LOAN PROVISIONS Section 6.1 City Predevelopment Loan. The City will provide a predevelopment loan in the maximum principal amount of$2,800,000 (the "City Predevelopment Loan") for predevelopment costs including architecture and design costs, legal and specialty consultant fees and other preconstruction related costs. The City Predevelopment Loan will be evidenced by the City Predevelopment Note between Developer and City and is part of the City's total financial contribution as identified above in Article 5. The City Predevelopment Loan shall be used solely for preconstruction costs in accordance with the Project Budget to be approved by the City. Conditions to Funding. The City shall fund the Predevelopment Loan for predevelopment generally in the amounts and for the preconstruction cost items set forth in Exhibit C. City disbursements shall be made within thirty (30) days after a written request from the Developer setting forth the use of funds and the amount of funds needed with an attached a copy of the bill or invoice covering the costs incurred. Notwithstanding any other provisions of this Agreement, the City shall have no further obligation to disburse any portion of the City Predevelopment Loan to the Developer following: (i) termination of this Agreement; or (ii) notification by the City to the Developer of Developer default under the terms of this Agreement; provided, however, that the City shall become obligated again to disburse City Predevelopment Loan funds to the Developer pursuant to the terms of this Agreement if the Developer cures the default within the applicable cure period. Section 6.2 City Construction Loan. In addition to the foregoing financial commitments described in Section 6.1. above, the City may make one or more additional financial contributions to the Development, including construction of Phase I or Phase II of the Development. The City will provide a construction loan in the maximum principal amount of $7,200,000 (the "City Construction Loan") for costs to develop the Development in accordance with the Project Budget to be approved by the City. The City Construction Loan will be disbursed following the necessary land use and permit approvals and the approval of the final Financial Plan. Section 6.3 City Loan. The City Loan includes the City Predevelopment Loan and the City Construction Loan and shall be used for predevelopment, construction, and permanent financing for the Development. At Closing, the City Predevelopment Loan shall be a deemed disbursement of the City Loan. Simple interest at three percent (3%) per annum shall accrue on the principal amount of the City Loan. The City Loan shall be repaid as follows: (a) The City Loan shall have a term that expires on the date fifty-five (55) years from conversion of the permanent financing (the "Term"). (b) Payment in Full. All principal and interest, if any, on the City Loan shall, at the option of the City, be due and payable upon the earliest of (i) a Transfer other than a Transfer permitted or approved by the City as provided in Article 11 below; (ii) the occurrence of an Event of Default for which the City exercises its right to cause the City Loan indebtedness 14 191A52V1242198.13