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Section 8.2 Loan Agreement, Note No. 2, and Personal Guaranty. Contemporaneous
<br />with the HRA's conveyance of the Development Property to Developer: the HRA and Borrower
<br />must each execute the Loan Agreement and must each deliver an original, executed Loan
<br />Agreement to the other party; Borrower must execute Note No. 2 and deliver Note No. 2 to the
<br />HRA; and Borrower must cause the Personal Guarantor to execute the Personal Guaranty and
<br />deliver the Personal Guaranty to the HRA. In the event of a conflict between the terms of Note
<br />No. 2 and the terms of this Development Agreement, the terms of Note No. 2 control. In the
<br />event of a conflict between the terms of this Agreement and the terms of the Loan Agreement,
<br />the terms of the Loan Agreement control.
<br />Section 8.3 Initial Interest Rate, Interest Rate Increase and Default Interest Rate.
<br />Simple interest will accrue on the unpaid principal balance of Note No. 2 from the date funds are
<br />advanced until Note No. 2 is paid in full at the rate of 6.27% per annum unless the rate is
<br />increased pursuant to this Section 8.3. If the Borrower prepays a total of $3,000,000.00 or more
<br />of the outstanding balance of Loan No. 2 on or before the date 18 months after the date of the
<br />first disbursement of proceeds of Loan No. 2, the interest rate remains at 6.27% per annum until
<br />the maturity date as established pursuant to Section 8.4. If Borrower does not prepay a total of
<br />$3,000,000.00 or more on or before the date 18 months after the date of the first disbursement of
<br />proceeds of Loan No. 2, the interest rate increases on the date 18 months from the date of the
<br />first disbursement of proceeds of Loan No. 2 to 8.27% per annum and remains at 8.27% per
<br />annum until the earlier of the date Borrower prepays a total of $3,000,000.00 or more or the
<br />maturity date. If after the date 18 months after the date of the first disbursement of proceeds of
<br />Loan No. 2 and prior to the maturity date of Note No. 2, Borrower prepays a total of
<br />$3,000,000.00, the interest rate will be reduced to 6.27% per annum from and after the date
<br />Borrower has prepaid a total of $3,000,000.00 If an Event of Default occurs under the Loan
<br />Agreement, the HRA gives Borrower notice of the Event of Default and Borrower does not cure
<br />the default within the cure period, if any, provided for in the Loan Agreement the interest rate
<br />then in affect is increased by 5% per annum.
<br />Section 8.4 Repayment Terms. The entire outstanding principal balance and all
<br />accrued, unpaid interest under Note No. 2 is due and payable in full upon the earlier of (i) June 1,
<br />2015 or (ii) a Sale of the Development Property. Upon the occurrence of an Event of Default,
<br />the entire outstanding principal balance hereof and all accrued interest and other amounts due
<br />hereon shall, at the option of the HRA and subject to the notice and cure provisions set forth in
<br />Section 13.1(c) and the Loan Agreement, become immediately due and payable, in full,
<br />provided, however that if an Event of Default described in Section 13.1 (i) or (j) occurs, all sums
<br />outstanding under Note No. 2 shall become immediately due and payable in full without notice
<br />or demand whatsoever.
<br />Section 8.5 Prepayments. Borrower may prepay Note No. 2, in whole or in part, at
<br />any time and, if in part, from time to time, during the term of Note No. 2. All payments shall be
<br />applied first to the payment of accrued, unpaid late charges, then to accrued, unpaid interest, if
<br />any, with the balance, if any, applied to the reduction of principal. If Borrower prepays
<br />$2,000,000.00 or more on or before the date 12 months after the date of the first disbursement of
<br />proceeds of Loan No. 2, the HRA shall forgive $250,000.00 of the principal amount of Loan No.
<br />1, such forgiveness to be effective as of the date Borrower has prepaid at least $2,000,000.00.
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