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2 <br /> <br />H. Concurrently herewith Owner shall execute a promissory note (the “Note”) in <br />the amount of the Loan. This Agreement and the Note are hereinafter referred to as the <br />“City Documents.” <br />NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency <br />of which are hereby acknowledged, the Parties hereby agree as follows. <br /> <br />ARTICLE I <br />LOAN TERMS <br />1.1 LOAN AND NOTE. City agrees to loan to Owner, and Owner agrees to <br />borrow from and, subject to the provisions of Section 1.2.1, repay to City, the lesser of <br />Twenty Thousand Dollars ($20,000), or fifty percent of the Project cost upon the terms <br />and conditions and for the purposes set forth in this Agreement. The Loan shall be <br />evidenced by the Note which shall be dated as of the Effective Date and executed by <br />Owner substantially in the form attached hereto as Exhibit C. Provided that Owner has <br />complied with all conditions set forth in Section 3.3, the Loan Proceeds shall be disbursed <br />in accordance with Section 3.2 hereof. The Parties agree that the City shall disburse Loan <br />Proceeds only for and to the extent necessary for the purposes set forth in Section 3.1. <br />1.2 INTEREST RATE; REPAYMENT. The outstanding principal balance of the <br />Note shall accrue interest at the rate of three percent (3%) simple interest per annum. The <br />entire outstanding principal balance of the Loan together with accrued interest and all other <br />sums due under the City Documents shall be payable in full upon the occurrence of an <br />Event of Default or upon the event of a Transfer (as defined in Section 1.3(b)) without City’s <br />written consent. <br />1.2.1 LOAN FORGIVENESS. On the fifth anniversary of the effective date the entire <br />outstanding balance of the Loan, together with accrued interest, shall be forgiven, provided <br />that no Event of Default has arisen under the City Documents. <br />1.3 PREPAYMENT; ACCELERATION. <br />(a) Prepayment. The Note or any portion of the outstanding principal balance <br />due under the Note may be prepaid at any time and from time to time, without penalty or <br />premium. Any prepayment of principal must be accompanied by interest accrued but <br />unpaid to the date of receipt of prepayment. Prepayments shall be applied first to accrued <br />but unpaid interest and then to principal. In no event shall any amount due under the Note <br />become subject to any rights of offset, deduction or counterclaim on the part of Owner. <br />(b) Due On Sale. Unless City agrees otherwise in writing, the entire unpaid <br />principal balance and all interest and other sums accrued under the Note shall be due and <br />payable upon the Transfer absent the prior written consent of City, of all or any part of or <br />interest in the Premises or the Improvements, other than a lease of the Improvements or <br />part thereof entered into in the ordinary course of business. “Transfer” shall include any <br />assignment, hypothecation, mortgage, pledge, encumbrance or conveyance of the Lease, <br />Business, or the Improvements. <br />DocuSign Envelope ID: FEE47689-2EFE-4EE4-BAD7-6185FD2187CD