Small Business Forgivable Loan Agreement (Page 2 of 7) in pdf

The Borrower agrees to repay all un-forgiven principal of the Forgivable Loan in

five (5) equal annual installments due on the first, second, third, fourth and fifth anniversary of

the Completion Date (_________________, _________________, _________________,

_________________, and ________________) (each, an “Anniversary Date”), unless the loan is

otherwise forgiven in accordance with the conditions hereinafter set forth in Section B.2. The

Borrower hereby acknowledges and agrees to the loan repayment forgiveness conditions set forth

in Section B.2 of this Agreement. The Borrower reserves the right to prepay such principal in

any amount at any time without penalty. Payment of principal on the Forgivable Loan shall be

made to the City of Muscatine at 215 Sycamore, Muscatine, Iowa 52761-3840 (the “City

Administrator’s Office”) by 4:00 p.m. on each Anniversary Date, as set forth herein. The

Borrower shall execute a promissory note in favor of the City to evidence its obligations with

respect to the Forgivable Loan. The promissory note shall be in substantially the form as set

forth on Exhibit C hereto.

The Borrower agrees to submit an annual report to the City not more than 45 days

not less than 30 days before each Anniversary Date demonstrating to the satisfaction of the City

that the Borrower continues to maintain ownership of the Business and is operating the Business

in accordance with its regular operations, as described on Exhibit B hereto. The Annual Report

shall include such information, documentation and/or records as the City may require, which

information, documents and/or records are listed on Exhibit B hereto.

The Borrower understands the city will file UCC-1 form.

City’s Obligations

The City hereby agrees to deliver to the Borrower proceeds of the Forgivable

Loan in its entirety in the amount of _______________________ ($____________) on the date

hereof.

The City will file UCC-1 Form to secure a position as a creditor for its loan until

expiration.

Subject to the adequate demonstration (as set forth in Section A.4 above) by the

Borrower, the City agrees to forgive one-fifth (1/5th) of the principal amount of the Forgivable

Loan on each Anniversary Date such that if the Borrower continues to own and operate the

Business as covenanted in Section A.2 above until the fifth Anniversary Date

(______________________________), the Forgivable Loan would be entirely forgiven.

Promptly following discharge of the Borrower’s obligations under the Forgivable

Loan, whether by repayment as set forth in Section A.3. above, forgiveness as set forth in

Section B.2. above, or a combination of repayment and forgiveness, the City agrees to cooperate

with Borrower to file a release of the Mortgage or the Financing Statement at Borrower’s

expense.

Events of Default, Remedies & Offset.

The occurrence of any of the following shall constitute an Event of Default:

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Small Business Forgivable Loan Agreement Page 2