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ARTICLE 3 11111 Section 3. 1. Arnount and Source of Loan. The City has authorized the issuance of the Note in the aggregate principal amount of $7,000,000 to provide funds to the Borrower for its use in the acquisition, renovation and equipping of the Project. The City agrees to lend the Borrower, upon the terms and conditions set forth herein, the proceeds received from the Note by causing such sums to be applied and disbursed in accordance wit li the provisions of this Agreement. Forthwith upon the execution and delivery of' this Agreement and all other documents and instruments necessary to the transactions, contemplated hereby and the recording and filing of such documents as may be required to, be filled or recorded by the Lender or Bond Counsel, the City Neill execute the Note and cause it to be delivered to the Lender. Section 3.2 Documents Required Prior to Disbursement of the Loan. Prior to any advance of Note proceeds, the Borrower shall deliver to the Lender the following-, (1) The Note. (2) The Loan Agreement. (3) The Pledge Agreen-ient. (4) The Mortgage. (5) The Security Agreement. The opinion of Bond Counsel to the effect that the City has duly authorized the Note and that the interest thereon is exempt fron-1 federal incionie taxation and subject to other conditions acceptable to the Lender. Section 3.3 Disbursement of the Loan. Pursuant to this Agreement and the Act, the City has authorized the Borrower to provide directly for the renovation and equipping of the Bloomington Project and payment of interest on the Note during, renovation in such manner as determined by the Borrower and hereby authorizes the Lender to advance 'the proceeds of the Note directly to the Borrower as reimbursement for the payment of Pro ect Costs. i Section 3.4 Repayment. Subject to the prepayment provisions set forth in the Note, the Borrower agrees to repay the Loan by making all payments of principal, interest and ally premium, penalty or charge that are required to be made by the City under, the Note at the times and in the amounts provided therein. In addition, the Borrower agrees to pay or cause to be paid the purchase price of the Note when due upon an optional tenidler'by the Lender Pursuant to the requirements set forth in the Note. All payments shall be made directly to the Lender at its principal office for the account of the City. The Borrower represents and covenants that the source of payment of the Note is from revenues derived from the operation of the Project and other arnounts available to the Borrower. 2144817v 1 9