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ARTICLE 3 <br />THE LOAN <br />Section 3.1 Amount and Source of Loan. The City has authorized the issuance of the <br />Note in the aggregate principal amount of up to $2,000,000 or such lesser amount as is <br />determined prior to the initial issuance of the Note to provide funds to the Borrower for its use in <br />the retinancing of a portion of the Project Indebtedness. The Note is being issued in the principal <br />amount of $2,000,000. The City agrees to lend the Borrower, upon the terms and conditions set <br />forth herein, the proceeds received from the Note by causing such sums to be applied and <br />disbursed in accordance with the provisions of this Agreement. Forthwith upon the execution <br />and delivery of this Agreement and all other documents and instruments necessary to the <br />transactions contemplated hereby and the recording and filing of such documents as may be <br />required to be filed or recorded by the Lender or Bond Counsel, the City will execute the Note <br />and cause it to be delivered to the Lender. <br />Section 3.2 Documents Required to be Delivered at Closing. Prior to or <br />simultaneously with the Closing, the Borrower and /or the City shall deliver to the Lender the <br />following: <br />(1) The Note. <br />(2) The Loan Agreement. <br />(3) The Pledge Agreement. <br />(4) The Mortgage. <br />(5) The Security Agreement. <br />(6) The opinion of Bond Counsel to the effect that the City has duly authorized the <br />Note and that the interest thereon is exempt from federal income taxation and subject to other <br />conditions acceptable to the Lender. <br />(7) The opinion of counsel to the Borrower as to such matters as the Lender and /or <br />Bond Counsel may request. <br />(8) A title insurance policy from Title in form and substance acceptable to the Lender <br />in an amount at least equal to the stated face amount of the Loan and insuring that the Mortgage <br />is a valid first lien on the Mortgaged Property (as defined in the Mortgage) subject only to <br />Permitted Encumbrances (as defined in the Mortgage). <br />Section 3.3 Disbursement of the Loan. Pursuant to this Agreement and the Act, the <br />City has authorized the Borrower to prepay a portion of the Project Indebtedness and hereby <br />authorizes the Lender to advance the proceeds of the Note directly to itself to prepay a portion of <br />the Project Indebtedness. <br />2110583v4 <br />9 -27- <br />